A lack of unique individual identification has hurt the growth of Nigeria’s domestic credit market. Lending institutions have shifted from extending retail credit to a market where individuals could remain relatively anonymous.

However, this may be about to change as financial sector stakeholders move towards a consensus on using National Identity Numbers (NINs) as unique borrower identification.

At a recent credit market conference, participants discussed the practicality of using NINs as unique identification tracers for managing and monitoring borrowers.

The use of NINs was a pivotal part of the proposals from a panel discussion at the CRC Finance and Credit Conference 2024, a platform that brought together industry leaders to discuss and shape the future of financial inclusion and access to consumer credit in Nigeria.

Mr Olufemi Awoyemi, founder and Chairman of Proshare LLC, moderated the event. Mr Bunmi Kole-Dawodu, Lagos State Manager of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), highlighted the funding challenges micro, small and medium-sized enterprises (MSMEs) face.

He advocated a disruptive approach rather than a ‘nice-to-have’ template to improve funding for small businesses, stressing that the importance of regular stakeholder engagements between SMEDAN and industry stakeholders, underlining their crucial role in identifying challenges and opportunities for improving SME funding and growth in the country.

Mrs Helen Maiyegun, Head of Lagos and South-West Operations at Keystone Bank, reviewed the banking industry’s experience with consumer credit. She noted that the Central Bank of Nigeria (CBN) sets the template for industry lending and that caution is key in consumer credit.

She identified loan recovery as a major challenge for the banking industry in consumer credit activities.

Additionally, Maiyegun called for more support for women-owned businesses, highlighting their high level of loan repayment compliance.

Mr David Osadolor, Head of Credit Rating at LAPO Microfinance Bank, reiterated the significance of data in loan recovery, a major challenge in the industry.

He stated that as a microfinance bank, innovative methods have been deployed to recover loans. He further stressed that data is crucial and that LAPO has harnessed data to connect with improved customer preferences and choices.

Mr Ademola Adesalu, Head of CRC Data Analytics at CRC Credit Bureau Limited, stressed that the lack of data on customer information and behavior was a challenge to the growth of consumer credit in Nigeria.

He stated that CRC Credit Bureau Limited had developed 18 products, such as Customer Churn Analytics, to enable financial institutions and other industry stakeholders to profile customers and improve consumer credit services.

Adesalu advocated the NIN to be used as a single basic identifier for consumer credit in the country, thereby enabling proper tracking and effective KYC documentation.

He observed that 90 percent of CRC Credit Bureau data on loans came from financial institutions, while the company is working to deepen the database.

In summary, the moderator, Mr Olufemi Awoyemi, stressed the need for clarity on the government agency anchoring consumer credit activities in the country and the need for the current administration’s economic policy to tap into consumer credit.

He also corroborated the point raised by Adesalu that there was a need for a unique identifier, which in this case could be the National Identification Number.

In his welcome address at the conference, Dr Tunde Popoola, the GMD/CEO of CRC Bureau Limited, described the event as a platform for collaboration to deepen consumer credit penetration in Nigeria.

According to him, the penetration level in the country was 14 percent and there are opportunities to scale this upward with a more favourable regulatory environment and stronger industry operational frameworks.