The entire 22 deposit money banks in the country process a paltry 1, 500 credit report on a daily basis, we have learnt.
Making this disclosure recently was Mr. Miguel Llenas, who sits atop Dun and Bradstreet Credit Bureau Limited, a world acclaimed credit reporting agency with headquarters at the Dominican Republic.
Mr. Llenas, who was the lead speaker at a public forum organised by CRC Credit Bureau Limited in Lagos, noted that most banks in the country today were technically in distress because they chose to jettison core banking regulations.
Specifically, he said most businesses in the country were experiencing stagnant growth because they lacked access to finance from banks, who favour conglomerates and corporates with better loan facilities at the detriment of hundreds of businesses that can actually drive the economy.
“South Africa records over 60, 000 credit report on a daily basis alone. Argentina does about 160, 000. Sri Lanka does over 25, 000, Egypt processes over 50, 000, Dominican Republic does 40, 000. But sadly, Nigeria with a population of over 170million people process a ridiculous 1, 500 credit report. This may account for the slow economic growth witnessed across the sectors,” he said.
“Most Nigerian banks are not involved in serious lending, especially to the retail market,” he said.
Raising some posers, Llenas, who boost of over three decades experience as a credit expert said: “Do banks really need a credit bureau? How do you extend credit to customers if you don’t use credit report?”
Most of the banks in the country today, he insisted, “Have swift from lending to survival mode. Most of the banks are risk averse. This is partly why the economy is not moving forward.”
According to him, Nigeria with 22 banks only process just about 1, 500 credit reports, which are prerequisite to loan requests.
Most deposit money banks in the country today are still smarting from the losses incurred over the years as a result of toxic debts.
Llenas who leads the over 170 year old credit bureau firm, said Nigeria’s credit reporting was very poor for a size of the country when compared to countries within Africa and globally.
Speaking further, Llenas, who has traverse over 40 countries as part of his commitment to help grow the capacity of credit bureaus, stressed that Nigerian banks have the potential to drive the economy by lending to the critical sectors, especially the retail market rather than the high end market in order to enable them better manage risks when they occur.
“With credit monitoring, and a credit score, banks and lenders alike can easily predict the future. The use of credit report has to be a powerful tool if well harnessed,” he maintained.
Speaking earlier, Tunde Popoola, Managing Director/CEO, CRC Credit Bureau Limited, observed that most of the banks were exposed to a lot of risks, especially oil and gas, whose revenue projections have been badly affected by the economic crunch.
According to him, the challenges confronting most of the banks is how to reduce their risk portfolio given the bad debts they incurred these past years, especially at a time they are have more risk assets.
Thankfully, he said, the CRC Credit Bureau has been able to develop fool-proof measures that can help the banks contain the incidence of bad debts.
At the risk of sounding immodest, Popoola said what banks need to do to reduce the incidence of bad debts is to be more circumspect in the way they spread risks.
“Most of the toxic debts within the banking sector happened because they were done without proper due diligence analysis as it were. But that can be taken care of with our products and services like I-CON Plus, which can help to build a good credit industry.”
Echoing similar sentiment, Mrs. Peggy Chukwuma-Nwosu, Haed of Sales and Marketing at CRC Credit Bureau Limited, who gave a presentation on CRC Credit Monitors: Useful Tools to better manage Customer Loans, disclosed that the different products developed by her organisation rsets on the wing of technology.
Specifically, she said, the CRC Prospector, which is one of her company’s offerings, “Provides alternative contact information of customers you can no longer reach.”