Nigeria’s credit penetration rises to 14%

Credit penetration in Nigeria has risen to 14 per cent, driven largely by the activities of CRC Credit Bureau Limited, Nigeria’s foremost credit bureau company.

 Despite the increased penetration, the level is still lower globally than expected.

 The Group Managing Director/CEO of CRC Credit Bureau Limited, Dr Tunde Popoola, disclosed this during the Company’s CRC Finance and Credit Conference 2024, in Lagos on Wednesday.

He added that Nigeria had achieved a significant improvement in credit penetration in the last 15 years of its existence.

 The theme of the event which also doubled the company’s 15th anniversary was titled ‘Sustainable Financing Options: Innovations in Credit Risk Management’.

 Popoola added that only 33 million  Nigerians had their credit scores on the database of CRC Credit Bureau Limited, noting that a whole lot of effort is needed to bring onboard more Nigerians to access credit.

 “33 million Nigerians have credit scores.  29.4 million searches were conducted in 2023. More than 10 million searches have been conducted in Q1, 2024.  CRC has moved from one product in 2010 to 18, cutting across all value chains of lending,” he noted.

 Popoola also revealed that CRC Bureau Limited and the various regulators in the country, especially the Central Bank of Nigeria, despite the daunting challenges to easing access to credit, were making some reasonable progress.

 He said, “Today so many millions of Nigerians get loans on their phones and lenders rely on CRC to lend.  The Credit Reporting Act signed in 2017 by the Buhari regime to back credit reporting and the backing of the CBN have boosted credit penetration over the years.”

 Reminiscing on the journey so far for CRC Credit Bureau Limited, Popoola said, “15 years ago, this company received a licence from the CBN to operate.   Specifically, in January 2010, CRC was launched.  Our business is to ease access to credit in Nigeria.  Credit report was the initial product launched but many more products have come on board since then, however,  a few organisations/banks are using them.”

 Speaking earlier, the Chairman of CRC Board of Directors, Joel Owoade,  lamented that the prevailing economic fluctuations in the country had affected the profitability of companies in Nigeria, with so many of them reporting unprecedented losses up till Q1, 2024.

 Proferring a solution, he said, “Sustainable financing is one of the ways out for the economy. Risk management is therefore a way of mitigating against bad loans for banks.”

 The Managing Partner of Verraki, Olaniyi Yusuf, who spoke on ‘Artificial Intelligence Paradox: From Solution to Risk’ said global inequality should be the major worry in the AI-driven fourth industrial revolution, rather than job displacements.

 “Rather than have a net job loss, more jobs are expected to be generated in the AI-driven industrial revolution. Nigeria needs the regulatory framework to benefit from AI.  Regulations are important but must not stifle it. It should not become another IGR source. Right infrastructures must be provided. There will be failures but that should motivate AI start-ups to navigate and get better.”

 The acting Director of the Banking Supervision Department, CBN, Dr Adetona Adedeji, in a presentation, stated, “At 14 per cent credit penetration our economy still has a long way to go.  It’s not about granting credit, it must be sustainable, it must be revolving to sustain the economy.”

 Speaking on the efforts of the CBN to promote sustainable credit in Nigeria, Adedeji, who was represented by the Assistant Director of Banking Supervision Department, CBN, Olubunmi Ayodele-Oni, added, “Other Financial Institutions have been mandated to provide credit reports like the banks.”

 He noted that the establishment of the National Collateral Registry, Global Standing Instruction and approval of Credit Bureaus are measures taken by the CBN to enhance sustainable credit in Nigeria.

  “A good credit score can help you borrow at a lower interest rate.  There is a global picture of the borrower by the lender before the transaction is done,” he disclosed.