Credit bureau operators in Nigeria, United States and Canada have agreed to share credit data of their citizens to boost over $22 billion Diaspora remittances flowing into Nigeria, The Nation has learnt.
The strategic alliance will also give Nigerian immigrants easy access to loans in these countries before building a strong credit history, CRC Credit Bureau Limited Chief, Tunde Popoola, has said.
CRC Credit Bureau, Credit Registry and XDS Credit Bureau are the three licensed operators in Nigeria. Popoola said without such data exchange, Nigerian immigrants wait for years before they can access credit in their new location, making it difficult for them to cope financially.
The World Bank data showed that Nigerians living abroad (Diaspora) sent home $22 billion in 2017, the highest in the Sub-Saharan region, and the fifth highest in the world. This represents 10 per cent increase when compared to the $19.64 billion sent home in 2016. The data exchange partners have seen the rising financial influence of Nigerians in Diaspora and the need to quickly and fully incorporate them into their economies.
Popoola said: “The data sharing scheme makes it easy for Nigerians that have relocated to United States and Canada to be fully integrated into the economies and begin to access credit. That means instead of waiting for years to begin to access loans, they can now easily pick up and continue their lives in their new place of residence.”
The data integration scheme relies on high-level technology deployed by all the partners to make the process fast and seamless.
Popoola said the Credit Reporting Act 2017, signed by the Clerk of the National Assembly, Mohammed Sani-Omolori, provides a right to request and obtain, once a year, one free Credit Report from credit bureau, provided that a data subject shall be entitled to, at any time, request additional credit reports on him or her upon payment of any applicable fee.
“The Act promotes responsibility in the credit market by encouraging responsible borrowing, avoidance of over-indebtedness and fulfilment of financial obligations by consumers and discouraging reckless credit granting by credit providers and contractual default consumers; and facilitate credit information sharing. A credit bureau is expected by law, to create and maintain a database of credit and credit-related information in accordance with provisions of this Act,” he said.
According to him, credit bureaux are empowered by the Act to receive, collate and compile credit and credit-related information from Credit Information Providers, credit information users and such other persons the CBN may prescribe.
“They are to issue credit reports, and provide other services that relate to permissible purposes, investigate at the request of credit information user, an application for credit on behalf of any person to whom an application for a credit based transaction has been made,” he stated.
Popoola said since credit bureaux were licensed in 2009, his experience with customers has, on the whole, been positive. “We have been able to grow our customer base from being largely financial institutions to other sectors. We now have some insurance companies, telecommunication firms, real estate companies, leasing companies that have come on-board,” he said.
He spoke of how the operators had many issues with the quality of credit data submitted to them, “but there has been an improvement, although there is still room for improvement”.
The adoption of standardised common data submission template has helped. “Most Nigerian banks’ customers still do not know much about credit bureaux and how they are impacted by their existence. Some also do not know how to seek corrections to wrongs and disputed information submitted to the credit bureaux by creditors,” Popoola said.
“Many do not know the rights conferred on them by the law on the limited permissible purposes for which their information could be used, and the protection of their data and robust provisions on how to address disputed information. A lot needs to be done in this area”.
“Last year, the Credit Reporting Act, which lays down the legal framework for the operations of credit bureaux, was signed into law. The financial sector has embraced credit reporting and they are benefiting from it. Other credit grantors in the economy such as the telecommunication companies, distribution companies (Discos), utility companies, insurance companies, cooperative societies, and retailers have not fully embraced credit reporting. We will do a lot of engagements in this area,” he added.
