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Professionals urge quality credit data for improved financial industry

The promotion of effective credit risk operations through the deployment of quality and robust credit data management has been identified as the major critical factor that would ensure the emergence of a healthy financial services industry in Nigeria.

This was the submission of the Chartered Institute of Bankers Centre for Financial Studies (CIBNCFS) and the Credit Bureau Association of Nigeria (CBAN) at a business forum held in Lagos for stakeholders in the country’s financial services’ landscape to discuss the relevance of Credit Data Management in the industry. The forum was organised by CBAN in conjunction with the CIBN

The Registrar/Chief Executive, Chartered Institute Of Bankers Of Nigeria (CIBN), Mr. ’Seye Awojobi, represented by Mr. Segun Shonubi, Deputy Director, Membership Services, while presenting a keynote address at the forum said that the need for a more deliberate policy action on credit data management became pronounced in recent years due to the fast-paced and changing regulatory and reporting requirements, such as the need to comply with Basel III.

He stated that the unprecedented evolving dynamics in the financial services industry with fundamental shifts in customers’ demands and expectations had aroused a new interest in credit data management adding that without a very strong monitoring template using technology, predatory debtors can deploy the same technology to break all boundaries designed for determining their true credit histories.

He however, noted that globally, ease of access to credit was critical for business growth, while lending institutions are always wary of the safety of their funds. Reaching a delicate balance, he continued, is the sole objective of an effective credit data management and credit risk strategy by financial institutions.

He said: “As a result of this ugly trend in the industry in the early 1990s, the CBN established a Credit Risk Management System that would provide a central database from which consolidated credit information on borrowers could be obtained. This led to the decision to create a credit bureau by CBN which was given a legal backing by the CBN Act No.24 of 1991 [sections 28 and 52] as amended”.

In the same direction, the Chief Executive Officer/Managing Director XDS Credit Bureau/Chairman, CBAN, Mrs. Mobolanle Adesanya, who was represented by Mr. Olanrewaju Agbede, Head of Sales and Marketing, XDS Credit Bureau in a presentation titled ‘Nigerian Credit Reporting Act: Promoting Effective Credit Risk Operations In Nigerian Banking Sector’ said that the recently signed Credit Reporting Act was meant to promote responsibility in the credit market by encouraging responsible borrowing, avoidance of over-indebtedness and fulfilment of financial obligations by all parties.

According to him, the Act would not only guarantee more robust Credit Reporting System in the country, but it would promote financial inclusion and also improved credit information sharing between financial and non-financial sectors and ensure more solid platform for better access to finance for SMEs with more influx of Credit Information on Data Subjects.

The forum, which was organised to address the prevalent issues with Data quality as well as create awareness on the existence of the Credit Reporting Act in Nigeria, was attended by various stakeholders in the country’s financial services sector including representatives of Commercial Banks, Micro Finance Banks, Financial Technology Companies and insurance companies.

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