CBN Directive On Loan Defaulters, Way of Building Credit Mgt Systems for Nigeria–Agbaje
The CEO of Guaranty Trust Bank, Mr. Segun Agbaje has described the recent CBN’s directive on loan defaulters in Nigeria as part of the homegrown innovations to build a credit management system for the country.
Speaking recently in an interview during a programme on Arise Television, Agbaje noted that it had taken a while for Nigeria to build its credit history and the directive from CBN should set the pace for ensuring that there is a process for carrying out proper credit checks in the banking system.
According to him, “This is a novel way of ensuring that persons cannot borrow in one bank, abandon the loan and do business with another.”
Speaking further the GTB CEO said the CBN directive was not a departure from what credit agencies were doing, and will also help to put in place instruments to make the credit agencies and their ratings to be more effective than they have been in the past.
On the implications of the directive on the loan defaulters, he agreed that there could litigations as it concerns their privacy and agreements with various banks.
“To boost the real sector, loans must be made more freely and this instruction is to make banks more confident to grow their loan book and not worry on non- performing loans” Agbaje said.
He believed that the CBN directive will go a long way to reduce the loan default rate and encourage banks to lend more in the country.
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Giving further insight he asserted that growing access to credit was a major issue that the Nigerian financial services industry should give top priority to.
In the area of regulations, He said, CBN was taking the right step and welcomed the idea of driving consumer type credit in Nigeria’s financial services industry, beyond retail credit. Agbaje was of the view that Nigerians with good ethical conduct will embrace the CBN policy wholeheartedly and align with it.
Looking at financial systems and innovation, he appreciated the role of fintechs that are creating payment platforms to reach out to the unbanked Nigerians. He however stated that GTB has been thinking in that direction which explains its products and innovation strategy.
“We have launched several retail lending products and are re-launching them online where people can just access them through their mobile phones,” the GTB CEO said.
Among the top 5 banks in Nigeria, Guaranty Trust Bank is adjudged to be the financial institution that has the lowest number of loan defaulters in the country.
Recently the Central Bank of Nigeria (CBN) and commercial banks in the country agreed that loan defaults will be settled using deposits made in other banks.
The CBN is geared towards encouraging commercial banks to increase lending to private enterprises.
Samson Oyedeyi
