FG to build unified system to access Nigerians’ creditworthiness, says NOA

The National Orientation Agency (NOA) says the Nigerian Consumer Credit Corporation of Nigeria (CREDICORP) will establish a unified credit system that can access the credit history of individuals.

In its weekly publication, the agency said the system would integrate Nigerians’ credit scores with their national identification numbers (NIN).

“In pursuit of transparency and accountability following the expansion of the frontiers of Credicorp operations, the organisation will build a unified credit system that will be empowered to beam its searchlight into the credit history of any individual,” the report reads.

“This credit system will link Nigerians’ credit scores with their National Identification Numbers (NIN). Credit score is the numerical representation of an individual’s creditworthiness. It reveals the likelihood of such an individual to obtain loans. The numerical representation of an individual is usually in three digits, which range from 300 to 850.”

NOA explained that credit scores are essential for banks and other financial institutions in determining access to loans, credit cards, and other financial products.

“It is also used to assess risks and make lending decisions. The higher the digits of a loan seeker, the higher the credit he can access,” the agency said.

‘EXPANSION OF FREE-INTEREST RATES’ LOANS’

On April 24, 2024, the federal government approved the takeoff of the first phase of the consumer credit scheme and launched a portal for Nigerians to express interest in the scheme.

President Bola Tinubu, on June 12, announced plans to launch a new consumer credit initiative in July to empower 400,000 young Nigerians, including National Youth Service Corps (NYSC) members.

The president said the initiative would be implemented through the CREDICORP, which has already extended credit access to over 100,000 Nigerians, including 35,000 civil servants.

Beginning in July, NOA said the federal government interest-free consumer credit would be available to all creditworthy Nigerians, regardless of background.

“Administered by Credicorp, the second phase of the consumer credit initiative is building on the first phase, which took off in September last year with focus only on civil servants,” the agency said.

“The necessity to expand access to affordable consumer credit nationwide is the rationale behind this second phase of the initiative.

“This second phase of the scheme offers prospective applicants the full-fledged opportunity to access N2 million interest-free loans as well as single-digit interest loans for other credit facilities.”

In the first phase, NOA said beneficiaries “accessed up to N3.5 million with repayment plans spread over several years at low interest rates of 2 to 4 percent, equivalent to 22 percent annually. This new phase is entirely interest-free”.

Uzoma Nwagba, managing director of CREDICORP, said the initiative would consolidate individuals’ credit data from all financial institutions — banks, fintechs, and microfinance outfits — into a national credit bureau.

“This is a fundamental shift in how credit works in Nigeria. Your NIN will now serve as the anchor for your credit profile,” Nwagba said.

“Whether you borrowed from a commercial bank, a microfinance institution, or a digital lender, that data will now be traceable and carry real consequences.”

Uzoma Nwagba added that the new system would make it difficult for borrowers to evade repayment, as strict accountability and stiff penalties for defaulters would be enforced.