- Nigeria Lags Behind in Consumer Lending, to Get Boost with New Law
Nigeria is trailing South Africa and other countries in terms of consumer lending as only 10 per cent of its loans are for consumer lending. This is lower than 45 per cent in South Africa, 33 per cent in Brazil and 18 per cent in Indonesia.
However, the signing of the Credit Reporting Act, 2017, into law on May 30 by acting President, Prof. Yemi Osinbajo is significantly deepening consumer lending in Nigeria.
Speaking in an interview, the Managing Director/Chief Executive Officer of CRC Credit Bureau Limited, Mr. Tunde Popoola, said the new law heralds significant phenomenon in credit reporting in Nigeria.
“One thing that government has done and we must commend them is the enactment of the Credit Reporting Act. Before now, we did not have an enabling legislation that is providing cover for our industry. The Credit Reporting Act is just a very excellent way of support from government,” he said.
According to Popoola, commercial banks have not been doing more consumer lending because tracking non-performing borrowers is difficult.
“Besides, consumer transactions are too small and expensive to manage. There is difficulty managing millions of borrowers and nonperforming loans, fear of multiple identities and fraud. There is also the issue of wrong lending model lack of expertise, technologies and lack of unique borrower identity,” he said.
Popoola noted that apart from the Act, the Bank Verification Number (BVN) will equally impact positively on the level of consumer lending in the country.
“With BVN, means of identification is becoming easier and easier and that is assisting the efficiency of processing data because we now can identify people with their BVN rather than with their names. Before, when input a name into system, so many people come up on the system. But today, if you use their BVN, only one name comes up,” he said.
The CRC Credit Bureau Limited boss added that the FICO Score recently introduced into the country will equally boost consumer lending.
“FICO Scores will know the risk level of every borrower and able to dimension whether it is good, excellent, average or bad. And with that, you can now have dimension of relationship you want to have with such an individual,” he said.
Popoola explained that introduction of FICO Score will change the face of consumer lending in Nigeria as it will give opportunity for financial inclusion and private individuals who don’t have opportunity will now have opportunity to borrow and also give opportunity to lenders to give loans to people who have credit worthy based on the information they will get from FICO.
He said that FICO Scores is a three digit scores that is between 300 to 850, noting that the higher it is the better the person is rated and the lower it is the higher the risk that individual is carrying.
“No institution will give money to somebody with low scores. And once you have the scores (as lenders) you can now decide to differentiate who you want to lend your money to, whom you want to give your product to and the kind of condition that you want to attach to such relationship between lenders and borrowers and buyers of products and makers of products. Those who score between 700 and 850 are excellent people and such people you sell to them at very reasonable price or rate and probably without any condition attached,” he said.
Afreximbank, AAAM to Drive Automotive Investment
Afreximbank, AAAM to Drive Automotive Investment
The African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa.
President of Afreximbank, Prof. Benedict Oramah and President of AAAM/Managing Director of Nissan Africa, Mike Whitfield, signed the MoU in early February, according to a statement yesterday.
The deal formalised the basis for a partnership aimed at boosting regional automotive value chains and financing for the automotive industry while supporting the development of enabling policies, technical assistance, and capacity building initiatives.
Oramah, said, “the strategic partnership with AAAM will facilitate the implementation of the Bank’s Automotive programme which aims to catalyze the development of the automotive industry in Africa as the continent commences trade under the African Continental Free Trade Area (AfCFTA).”
Under the terms of the MoU, Afreximbank and AAAM will work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between global Original Equipment Manufacturers (OEM), suppliers, and local partners.
The two organisations plan to undertake comprehensive studies to map potential regional automotive value chains on the continent in regional economic clusters, in order to enable the manufacture of automotive components for supply to hub assemblers.
“To support the emergence of the African automotive industry, they will collaborate to provide financing to industry players along the whole automotive value chain. The potential interventions include lines of credit, direct financing, project financing, supply chain financing, guarantees, and equity financing, amongst others.
“The MoU also provides for them to support, in conjunction with the African Union Commission and the AfCFTA Secretariat, the development of coherent national, regional and continental automotive policies, and strategies.
“With an integrated market under the AfCFTA, abundant and cheap labour, natural resource wealth, and a growing middle class, African countries are increasingly turning their attention to support the emergence of their automotive industries.
“Therefore, the collaboration between Afreximbank and AAAM will be an opportunity to empower the aspirations of African countries towards re-focusing their economies on industrialisation and export manufacturing and fostering the emergence of regional value chains,” the statement added.
“The signing of the MoU with Afreximbank is an exciting milestone for the development of the automotive industry in Africa. At the 2020 digital Africa Auto Forum, the lack of affordable financing available for the automotive sector was identified as one of the key inhibiters for the growth and development of the automotive industry in Africa and having Afreximbank on board is a game changer and a hugely positive development,” CEO of AAAM, David Coffey said.
“It is wonderful to have a partner that is as committed as the AAAM to driving the development and growth of our sector on the continent; this collaboration will ensure genuine progress for our industry in Africa,” Coffey added.
Other areas covered by the MoU include working with the African Union and the African Organisation for Standardisation to harmonise automotive standards across the continent and developing an automotive focused training program for both the public and private sector.
FG Warns Foreign Investors Against Enslaving Nigerians
The Federal Government on Monday warned foreign investors against subjecting Nigerians working in their companies to industrial slavery.
The government said the warning became necessary following several complaints against foreign companies maltreating some of their staff.
The Chief Commissioner, Public Complaints Commission, Chile Igbawua, issued the warning during a courtesy call on him by a delegation of Pan Africa United Youth Developments Network who came to lay complaint against some foreign companies allegedly maltreating Nigerians working under them.
The PCC said that it would not allow only its state commissioners to handle the issues due to their magnitude as there had been so many complaints about the ways some of the foreign companies were treating their staff.
At the event, the leader of the delegation, Habib Muhammed, expressed concern over alleged injustice and irregularities perpetrated by some company on Nigeria youths whom they engaged as factory workers.
He called on the Federal Government to look into the alleged slavery and injustice meted on Nigerian youths.
While calling on the foreigners to obey the labour laws of Nigeria, Igbawua said, “Our resources cannot be used to enslave us again.”
He said, “We have labour laws in Nigeria for goodness sake and we also have industrial standards; people working in various industries are entitled to good working conditions and minimum conditions of service.”
He added that the law was clear on the issue of casualisation and should be implemented.
Foreign Direct Investments into China Shot Up by 9% in 2020 to $163 Billion Against 49% US Decline
China had the highest inflow of Foreign Direct Investments (FDI) globally in 2020, surpassing the US which took the lead in 2019.
According to the research data analyzed and published by Comprar Acciones, China’s inflow shot up by 9% to $163 billion up from $140 billion the previous year. Meanwhile, the US had a 49% drop from $251 billion in 2019 to $134 billion.
Based on data from the National Bureau of Statistics, China reported a 2.3% growth in GDP in 2020. It was the only major economy to record a positive growth rate during the year.
Chinese Stock Market Saw 18 Million New Investors in 2020
Global FDI took a hit in 2020, falling by 42% year-over-year (YoY) from $1.49 trillion in 2019 to $859 billion. The figure was 30% lower than the one reported during the 2009 financial crisis.
Developed countries saw the worst performance, sinking by a cumulative 69% YoY to $229 billion. For developing economies, there was a 12% decline of $616 billion. By the end of 2020, developing countries accounted for a 72% share of global FDI, the highest on record. India had the highest growth among top-rated economies, shooting up by 13%.
China bore the brunt of the pandemic much better than its peers, posting a 6.5% GDP growth in Q4 2020. During the year, there were 18.02 million new investors in its mainland stock market, raising the total to 177.77 million. Driving the surge in interest was the stellar performance of Chinese stocks in 2020.
The Shenzen Component grew by 38.7% in 2020, and the CSI 300 increased by 27.2%, compared to the S&P 500’s 16.26% growth. IPO activity also soared, with China and Hong Kong accounting for 40% of global IPO volume in 2020 according to Ernst & Young.
Stock Market4 weeks ago
Citron Research that Called Jumia Fraud, Ends 20 Years of Short Selling Report After Losing Big on GameStop
News2 weeks ago
Doctors Warn Covid Will Become Endemic and People Need to Learn to Live With it
Bitcoin2 weeks ago
Bitcoin Surges Above $50,000 Per Coin on Tuesday, Sets a New All-Time High
Economy3 weeks ago
Petrol Landing Cost Rises to N180, Oil Crosses $60
Economy2 weeks ago
Petrol Subsidy May Hit N11.2bn Per Week
News6 days ago
U.S. COVID-19 Deaths Hit 500,000
Cryptocurrency3 weeks ago
Why CBN Bans Banks from Facilitating Cryptocurrency Exchanges
Banking Sector1 week ago
Banks Turning Female Marketers to Sexual Slaves – Senator