Bureau chief advocates proportionate credit allocation to sectors growing Nigeria’s economy

The Managing Director of CRC Credit Bureau Limited, Mr Tunde Popoola, on Wednesday called on commercial banks to give proportionate credit allocation to sectors contributing to the country’s Gross Domestic Profit (GDP).

Popoola made the call at the Bimonthly forum of the Finance Correspondents’ Association of Nigeria (FICAN) in Lagos, with the theme: “Economic Growth through improved Access to Credit”.

He said low access to credit in Nigeria was practically demonstrated through credit penetration, credit bureau coverage and disproportionate allocation of credit to different sectors.

According to him, only few Nigerian consumers and SMEs enjoy credit facilities from Nigerian banks.

He said that sectors that contributed the most were denied credit while the sector with relatively little contribution to the GDP enjoyed credit.

” For example, while agriculture contributed over 21 per cent to GDP in 2018, the share of bank credit to agriculture was the lowest at 3.8 per cent.

“On the other hand, while oil and gas received 23 per cent of bank credit, its contribution to share of GDP was less than 10 per cent.

“According to statistics, Nigeria could boast of over 37 million micro, small and medium enterprises (MSMEs).

“The MSMEs represent over 96 per cent of total businesses in Nigeria; they contribute about 49 per cent to GDP and over 84 per cent to non-agricultural employment.

” However, barely 5.3 per cent of total domestic credit to the private sector goes to the SMEs,” he said.

Popoola said also that the cost of borrowing was very steep in Nigeria, adding that it served as disincentive to borrowing to a lot of businesses, especially the SMEs.

He said CRC, which was established by the Central Bank of Nigeria in 2009, was formed to ease access to credit.

According to him, its presence has promoted strong credit systems in Nigeria.

He said that a strong credit system promoted a productive economy by encouraging credit to SMEs and enhancing quality of life of people through credit to consumers.

Popoola said that the value proposition to its customers included assisting them in identifying credible customers to grant loans or sell to on credit, manage existing credit facilities or receivables, and manage collections and bad debts. (NAN)