Credit data deficiency frustrates banking sector growth ….Amcon

The dearth of data bank in Nigeria has been described as major constrain retarding growth of banking sector; and further worsening evolution of the nation’s economy through purposeful lending.

This was revealed recently in Lagos by the managing Director, Asset Management Company of Nigeria (AMCON), Mr. Ahmed Kuru, at the Centre for Financial Journalism (CFJ) workshop for financial journalists and corporate banks communication managers.

The event, which focused on achieving financial inclusion, elicited stakeholders commitment to expanding financial services to more Nigerians who hitherto shun away or are excluded from any form of financial services.

In his address at the event themed “Achieving financial inclusion, role of financial journalists and bank communication managers” the AMCON MD ,Ahmed Kuru, said that financial institutions and financial journalists have major roles to play in driving financial inclusion even as he called on banks to eliminate barriers to accommodating more people in financial services.

While emphasizing that banks are profit making organization charged with the responsibility of delivering value to all their stakeholders, Kuru emphasized that though banks have deployed much innovation and technology to drive inclusive banking, but needed to do more.

Represented at the event by Executive Director at Resolution and Restructuring Company Limited, subsidiary of AMCON, Prisca Ndu, the AMCON MD, said that lack of credit data has to a very large extent hindered fund disbursement of banks as loans which also drives inclusive banking.

He said that lack of credit data makes it difficult for banks to have first-hand information on credit rating of individuals before extending facilities to the, adding that banks now serve as their own credit rating firm, at higher risks of lending to people with uncertain credit standing.

“The bank has a large pool of funds sitting on its vaults which is not supposed to be so, but the banks cannot give such funds out unless they are sure of the people they are giving it to, otherwise if the borrower defaults, the bank pays”

He called on the regulatory authorities to further enhance regulation of the financial sector, enhancing systems controls, loan disbursement and management fees.

According to the AMCON boss, the government also need to provide platform to shape behavior of banks and other financial institutions t check exploitation of clients which generates negative hearsay that debars people from buying into banking services.

“Contractually, you cannot charge me any fee I am not educated on or I did not sign for. For instance maintenance fee of N100, if it is spread over one million people, you know how much it is”
Responding to questions from participants on continued low penetration of banking and insurance services, said that financial institutions in the bid to drive financial inclusion have ventured into cost sapping areas, which ordinarily could have been derived from existing infrastructural services providers.

Represented at the event by, Executive Director at Resolution and Restructuring Company Limited, subsidiary of AMCON, Prisca Ndu, the AMCON boss said that lack of credit data base and credit insurance that would take the risk of expanded lending off the banks militated against extending financial services to more people.