The National Orientation Agency (NOA) says the Nigerian Consumer Credit Corporation of Nigeria (CREDICORP) will establish a unified credit system that can access the credit history of individuals.
In its weekly publication, the agency said the system would
integrate Nigerians’ credit scores with their national identification numbers
(NIN).
“In pursuit of transparency and accountability following the
expansion of the frontiers of Credicorp operations, the organisation will build
a unified credit system that will be empowered to beam its searchlight into the
credit history of any individual,” the report reads.
“This credit system will link Nigerians’ credit scores with
their National Identification Numbers (NIN). Credit score is the numerical
representation of an individual’s creditworthiness. It reveals the likelihood
of such an individual to obtain loans. The numerical representation of an
individual is usually in three digits, which range from 300 to 850.”
NOA explained that credit scores are essential for banks and
other financial institutions in determining access to loans, credit cards, and
other financial products.
“It is also used to assess risks and make lending decisions.
The higher the digits of a loan seeker, the higher the credit he can access,”
the agency said.
‘EXPANSION OF FREE-INTEREST RATES’ LOANS’
On April 24, 2024, the federal government approved the
takeoff of the first phase of the consumer credit scheme and launched a portal
for Nigerians to express interest in the scheme.
President Bola Tinubu, on June 12, announced plans to launch
a new consumer credit initiative in July to empower 400,000 young Nigerians,
including National Youth Service Corps (NYSC) members.
The president said the initiative would be implemented
through the CREDICORP, which has already extended credit access to over 100,000
Nigerians, including 35,000 civil servants.
Beginning in July, NOA said the federal government
interest-free consumer credit would be available to all creditworthy Nigerians,
regardless of background.
“Administered by Credicorp, the second phase of the consumer
credit initiative is building on the first phase, which took off in September
last year with focus only on civil servants,” the agency said.
“The necessity to expand access to affordable consumer
credit nationwide is the rationale behind this second phase of the initiative.
“This second phase of the scheme offers prospective
applicants the full-fledged opportunity to access N2 million interest-free
loans as well as single-digit interest loans for other credit facilities.”
In the first phase, NOA said beneficiaries “accessed up to
N3.5 million with repayment plans spread over several years at low interest
rates of 2 to 4 percent, equivalent to 22 percent annually. This new phase is
entirely interest-free”.
Uzoma Nwagba, managing director of CREDICORP, said the
initiative would consolidate individuals’ credit data from all financial
institutions — banks, fintechs, and microfinance outfits — into a national
credit bureau.
“This is a fundamental shift in how credit works in Nigeria.
Your NIN will now serve as the anchor for your credit profile,” Nwagba said.
“Whether you borrowed from a commercial bank, a microfinance
institution, or a digital lender, that data will now be traceable and carry
real consequences.”
Uzoma Nwagba added that the new system would make it
difficult for borrowers to evade repayment, as strict accountability and stiff
penalties for defaulters would be enforced.
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