The Federal Government has established a Technical Working Committee to consider measures to enhance consumer credit in Nigeria.
The establishment of the Committee by the Presidential Council on Industrial Revitalization is a timely and strategic initiative aimed at investigating the present state of consumer credit in Nigeria, identifying the challenges faced by both consumers and financial institutions, and proposing a coherent regulatory framework that can significantly improve the consumer credit landscape.
The committee is being chaired by the Minister of Finance and Coordinating Economy, Mr. Olawale Edun, and assisted by Dr. Doris Uzoka-Anite, Minister for Industry Trade and Investment as well as Minister for Communications, Innovations and Digital Economy, Dr. ‘Bosun Tijani.
“An efficient consumer credit system is a highly essential component of successful economies, as it works to improve market efficiencies and fill in gaps in consumption and productivity by providing consumers immediate access to credit allowing them to purchase ahead of ability. The absence of a well-structured consumer credit system has been a significant impediment to financial inclusion and economic prosperity,” the Trade Minister said at the inaugural meeting held earlier in the week.
Nigeria has numerous financial institutions and credit schemes but many Nigerians still face substantial hurdles in accessing credit due to stringent eligibility criteria, high interest rates, lack of awareness or understanding of credit processes, and inadequate credit available for lending.
Members of the committee at the inaugural session identified some major issues to be tackled to achieve a sustainable consumer credit framework.
The committee draws its members from the Central Bank of Nigeria (CBN) National Identity Management Commission (NIMC), the National Insurance Commission, (NAICOM), the National Institute of Credit Administration, the Federal Competition & Consumer Protection Commission (FCCPC), the Bank of Industry (BOI) amongst others, and agreed on a five-month timeline to achieve various objectives, including promoting inclusivity and improving access to finance.
The specific objectives of the Committee include to; increase consumer credit uptake in Nigeria, enabling a sustainable credit system for the country in line with global best practices, enhancing the supporting infrastructure (technology, data, financial institutions, global partners) to boost credit operations and equip players in the industry.
In delivering on this objective, the Committee has adopted a holistic consultative approach that draws on the experience, knowledge,e, and expertise of the credit system ecosystem in understanding the issues within the industry and defining workable solutions to addressing them.
Additionally, the committee seeks to address issues of corruption to foster economic growth. To achieve these goals, the committee will focus on developing a policy framework, harmonizing data, and enhancing both institutional and legal frameworks to achieve success.