The National Institute of Credit Administration (NICA) has emphasized the urgent need to enact robust legislation to instil discipline, decency, and honesty within Nigeria’s credit framework.
Prof. Chris Onalo, the Registrar and CEO of NICA, highlighted the significance of such laws in a recent statement, noting that the path to a developed credit system lies in the rigorous enforcement of laws that promote truthfulness and ethical practices in credit transactions.
According to Prof. Onalo, the success stories of developed nations in credit system advancement are mainly due to their commitment to implementing and adhering to stringent credit laws.
These laws cover various credit-related activities, including lending practices, business integrity, and the ethical pursuit of debt collection, ensuring that defaulters face legal consequences.
Onalo said:
- “For us to have a developed credit system, we need to do things right. We need enforcement of the right laws that will instil decency, discipline, honesty and truthfulness.
- “For example, in other climes, there are laws relating to lending, honesty in business, and acceptable approaches to debt collection arising from credit agreements.
- “There are laws that spell out punishment if you default in honouring your obligations. There are establishments of courts that adjudicate over those laws to ensure that the defaulting party is punished.”
The Role of Credit Access
Onalo also pointed out the critical role of credit access in Nigeria’s economic landscape, arguing that economic reform is a precursor to political restructuring.
He advocated for establishing institutional frameworks that encourage integrity and honesty, which he believes are essential for transforming Nigeria into a prime destination for business investment.
The NICA CEO further elaborated on the government’s vision to transition from a cash-heavy economy plagued by corruption to a more transparent and automated system.
This shift aims to penalize dishonesty and reward sincerity and honesty in personal and business dealings.
More Insights
- In a significant move to mitigate the impact of the escalating cost of living and the surge in borrowing among Nigerians, the federal government earmarked an N100 billion Consumer Credit Fund for the 2024 national budget. This decision comes against the backdrop of Nigerians borrowing a staggering N740 billion from banks in the first nine months of 2023, a trend fueled by the harsh economic realities of inflation and reduced purchasing power.
- With the Consumer Credit Fund, the government aims to tackle the twin challenges of persistent inflation and the growing propensity of Nigerians to borrow by making credit more accessible to consumers. This initiative is part of a broader strategy to stimulate economic growth and enhance the welfare of the populace.
- Establishing a Technical Working Group by the Presidential Council on Industrial Revitalization marks a proactive step towards revitalizing consumer credit in Nigeria. This group, which includes representatives from the Central Bank of Nigeria (CBN), the National Identity Management Commission (NIMC), and the Federal Competition and Consumer Commission (FCCPC), is tasked with formulating a comprehensive framework to bolster consumer credit facilities across the country.
- Dr Doris Nkiruka Uzoka-Anite, the Minister of Industry, Trade, and Investment, highlighted the critical role of an effective consumer credit system in enhancing market efficiencies, bridging consumption and productivity gaps, and ultimately fostering economic development.
- The Technical Working Group is expected to devise and execute an institutional and regulatory framework that will significantly improve the consumer credit landscape in Nigeria, offering relief and support to millions of Nigerians grappling with economic challenges.