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ICA clamours for integrity in managing credit for economic growth

…As Obasanjo advises on agriculture

By Moses Nosike

The Institute of Credit Administration in its recent concluded 2019 national credit managers conference had identified key issues affecting credit management and the way forward for managing credit to achieve economic growth in Nigeria.

The conference which was attended by experienced industry practitioners, stakeholders, professionals and the special guest of honour, former President of the Federal Republic of Nigeria, Chief Olusegun Obasanjo who said food import restriction must be backed by right policy to achieve desired result.

To strengthen the above, Head, Credit Risk Officer, Sterling Bank, Flexi Aremo, FICA, in his topic, “appraising blacklistism option for chronic debtors” said that blacklistism is a sanction system that imposes restrictions on individuals or organisations that are adjudged to be serial loan  defaulters or chronic debtors by listing them on a credit blacklist. “This class of debtors are referred to as “irresponsible” because they move from one bank to the other borrowing without any intention to repay, even when they have the capacity to repay”.

Aremo said that the objective of creating a credit blacklist is to deny new loans to the listed defaulters because they are considered untrustworthy or disloyal to the country’s credit system.

In a way to reduce this, he further said that effective “stakeholders’ engagement” is imperative to uncover individuals behind these business names. “Again, there must be a strong “political will” to drive policies to support loan recovery in the credit market. He also called that management of the economy must be separated from politics and professionals should be appointed to manage the economy with monetary policies that complement fiscal policies of the government”.

In addition, Managing Director, Asset Management Corporation of Nigeria, Mr. Ahmed Lawan Kuru (FICA) who spoke on how lack of integrity and trust undermines economic growth, said, “even though the challenges we face within the financial sector and indeed across the economy are significant, they are not insurmountable, they cannot overwhelm us.

Kuru said again that our best course is to be critical of established thinking that has outlived its utility and be bold in seeking out and implementing new ideas. “For too long, we have been required to accept that only slow incremental change is possible. I dare to differ. I believe that our present circumstances impose on us a mission of radical, rapid change within our sector.

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According to him, credit lenders need to collaborate more with the judiciary as their role as the ultimate decider of claims is vital to bolstering the credit system. If irresponsible lenders see the judiciary as a hiding place where their cases can be dragged indefinitely, it undermines the credibility of the entire credit system.

In the same vein, former President Olusegun Obasanjo has described lack of access to finance as one of the fundamental challenges militating against the growth of the agricultural sector in the country.

The former president who spoke in the ICA forum on, “Agric business and food security: The role of credit,” said that agriculture is the way to go and must be the centerpiece of our economy, but lack of credit is seriously hurting the sector.

Continuing, he said that agriculture business is very important because food is essential for our daily existence. “You can’t have food unless you have agric business. Not enough attention is being done to grow agriculture because it is not a very viable or vibrant money-making thing like oil and gas trading. But agriculture is one of the things we have to take very seriously. So you have to put money in it.

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