Provide more credit to consumers, credit bureaux tell banks

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Credit bureaux have urged banks to lend more money to consumers in order to accelerate the growth of the nation’s economy

The Managing Director/Chief Executive Officer, Dun and Bradstreet Credit Bureau, Miguel Llenas, made this assertion in Lagos at the CRC Credit Bureau Industry Forum, with the theme ‘Growth and innovation in retail banking: Building sustainable business models’.

Llenas was quoted in a statement as saying that the country would not develop when banks only lend money to corporate organisations.

He noted that Nigerian banks offered credit facilities mostly to the public sector and a few corporate organisations, which he said constituted only about two per cent of the entire population.

He said, “The banking system in Nigeria only has its focus on only about two per cent of the population.  What happens to the remaining 98 per cent? Nigeria’s concentration on the bond market cannot translate into economic development.

“Lending to small people that will engage in productive things that will grow the economy is more profitable than giving a $100m to a large oil corporation.

A Senior Consultant, Europe, the Middle East and Africa, Fair Isaac Corporation, Peter Ould, who spoke about the new global trends in credit scoring as well as the need for banks to embrace the mandatory IFRS 9, described technology and digitalisation as the way to go.

Ould said the key messages for credit lenders was the need to identify real untapped potential in data and knowing that balancing artificial intelligence with human intelligence was the key to unlocking the key values from big data.

The Managing Director, CRC Credit Bureau Nigeria Limited, Ahmed Popoola, said Africa’s retail banking revenue had been estimated to grow to $53bn (about N19.08tn) by 2022.

He noted that the figure represented 41 per cent of the total banking revenues in the region in the next four years, with Nigeria and South Africa being among the growth drivers.

According to a 2018 African banking report recently released by McKinsey and Company, the expected growth in revenues will come from South Africa, Egypt, Nigeria, Morocco, Ghana and Kenya.

McKinsey, in its report, noted that Africa’s banking markets were among the most exciting in the world as the continent’s overall banking was the second fastest-growing and second most profitable of any global region, and a hotbed of innovation.

The report read in part, “Africa’s banking revenue pools to grow at 8.5 per cent a year between 2017 and 2022, bringing the continent’s total banking revenues to $129bn.

“Africa’s retail banking markets are ripe with potential and present huge opportunities for innovation and growth. However, Nigeria has a herculean task before it to speedily expand its retail banking market as the report shows that it is lagging behind.”

According to the survey, available financial institutions in Nigeria provide less than 10 per cent of their credit facilities to consumers and Micro, Small and Medium Enterprises, compared to other emerging economies.

Popoola said Nigeria would soon take its place in the world as regards consumer lending.

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