The Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, on Wednesday disclosed that 50 biggest bank debtors accounted for 32.02 per cent of lenders’ total loans to the private sector as of May 2014.
The governor, who made this known at the second National Credit Bureaux conference in Lagos, however, said the central bank was working towards expanding bank loans to the private sector.
He also said the CBN was committed to punishing fraudulent borrowers.
Emefiele said, “The reform policies of the central bank have gained grip and resulted in a sound financial system. The ratio of Non-Performing Loans to gross loans as of May 2014 stood at 4.24 per cent, 0.76 basis points below the five per cent maximum threshold set.
“We are however yet to see the dispersal in the loan portfolio as the top 50 and 100 obligors account for 32.02 per cent and 41.34 per cent of the gross credit to the private sector.”
The governor further said he was committed to championing policies that promote the sustainability of hard-earned macroeconomic stability, while also enhancing financial access and reduction of cost of credit.
According to him, the CBN will “pursue a zero-tolerance policy on fraudulent borrowers, and improve the credit culture in the banking system by working towards reducing the effect of information asymmetry in the credit market.”
For some years now, he said the CBN had pursued policies which were aimed at stabilising the financial system that had been threatened by unpleasant banking practices such as accretion of toxic assets.
Emefiele recalled that private credit bureaux were established to play the vital role of assisting the CBN in the effective management of credit risk within the banking system.
He noted that credit bureaux had grappled with various challenges notable among which were the absence of a unique identifier, poor quality of data and low compliance levels by financial institutions.
The CBN governor, however, said, “The credit bureaux have continued to record steady increase in the number of records of registered borrowers. From a mere 78,189 in December 2010, the total number grew to 18,640,000 in June 2012. The number as of May 2014 stood at 26,623,156,”
“I want to commend the bureau operators for this feat and charge them not to rest on their oars as we still have more grounds to cover if we must have a robust credit reporting system.
Oits part, he said the CBN was committed to providing the required regulatory support, stating that the central bank had already made it mandatory for all financial institutions to have data exchange agreements with at least two credit bureaux.
He added, “All banks are required to obtain credit reports from at least two credit bureaux before granting any facility to their customers while quarterly portfolio checks must also be carried out to enable them determine borrowers’ current exposure to the financial system. We are currently reviewing compliance levels and in line with our zero tolerance policy for infraction, the appropriate sanctions would be imposed on erring institutions.” – Punch.