By Babajide Komolafe
A well developed and efficient Â Â credit information system as represented by credit bureaus are critical to developing a good lending culture in Nigeria, says Mr. Taiwo Ayedun,Â Managing Director/Chief Executive, CR Services (credit bureau) PLC.
He said that consumer and mortgage credit, on average, account for over 67 per cent ($8 trillion) of the GDP of the United States , a country with over three decades of strong consumer information sharing, adding that in Nigeria, the share of these is insignificant in total loans in the banking industry or the countryâ€™s GDP.
Speaking at a seminar for Business Editors and Finance Correspondents organised by the company in Lagos recently, Ayedun said information dissemination is one key role of credit bureau services in enhancing smooth operations of any financial institutions in the country, adding that this is the driving force behind the establishment of CR Services.
â€œCR Services understood early that widespread access to consumer credit can stimulate economic productivity and wealth creation. However, without information about consumers, banks and creditors cannot provide broad access to consumer creditâ€.
He said in addition to being the pioneer credit bureau in Nigeria, the companyâ€™s biometric identification technology is the first of its kind and the best in the world. He said apart from solving the problem of lack of unique identifier in the country, it is alsoÂ Â fraud-proof and a major boosts forÂ large-scale consumer credit in Nigeria .
According to him, with its integrated biometrics technology, CreditRegistryâ€™s system identifies consumers based not only on their personal data but also on their physiological characteristics such as their fingerprint or face, CR Servicesâ€™Â system enables creditors to know the true identity of their customers, prevents revenue loss, and protects consumers from identity theft fraud.
He explained that CreditRegistryâ€™s consumer identification technologies are more secure and more reliable than the ID numbers used by traditional credit bureau systems, which are prone to identity theft fraud because compromised personal data in these systems can be used to obtain credit in another personâ€™s name, thus destroying the credit reputation of the victim and increasing liability for creditors.
â€œCR Services utilizes sophisticated credit scoring algorithms to account for the data collection habits of creditors and the lack of initial consumer credit histories in emerging markets. You can bank on CR Services track record, experience and innovation in credit information exchange systems.â€
Ayedun said that CR Servicesâ€™s services provide several significant benefits to financial institutions and creditors, adding that their products and services can help creditors to grow faster. Pre_screen and acquire new customers quickly, Prevent financial fraud. Know your customerâ€™s true identity, prevent identity theft, enable industry_wide proactive monitoring of borrower risk status and pattern, increase internal security control, lower default rates. Efficiently exchange credit information, deter borrower abuse of credit and lower default rates across all types of consumer loans
Other benefits he said are to improve risk measurement, obtain comprehensive reports and credit scores and reduce lending risk and credit application review time, Reduce costs. Automate the management of large_scale consumer credit, improve product pricing and marketing and reduce operational costs for credit assessment
CR Services, he said provides a comprehensive and growing suite of products and services to enable creditors to manage risk and increase their revenue from the provision of credit related services. â€œOur products and services include Credit scores, Statistical score indicating customerâ€™s relative creditworthiness or odds of not defaulting. Credit scores enable instant credit decisions, Credit Reports.
Enable creditors, employers, landlords, insurers, etc. to make opportunities available to consumers, Abridged Reports, which include credit scores and aggregated credit data of the borrower, Comprehensive Credit Reports, which provide credit scores and detailed borrower credit history, including collateral information, co_borrowers, affiliated businesses amongst others.