‘Banks’ Credit To Consumers, MSMEs Below 10%’

Posted by on August 10, 2018 11:03 am
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SME Finance-Tunde Popoola

Tunde Popoola, Managing Director/CEO, CRC Credit Bureau Limited

Banks provide less than 10 per cent loans to consumers and Micro, Small and Medium Enterprises (MSMEs) in Nigeria compared to other emerging economies, Managing Director/CEO, CRC Credit Bureau Limited, Tunde Popoola, has said. Speaking during an industry forum organised by the firm in Lagos, he said following the enactment of the Credit Reporting Act, 2017, and the launch of a global scoring platform, it is expected that consumer loan value would grow exponentially.

He added that the World Bank projected that by 2020, one billion adults currently excluded from traditional financial systems will gain access to some form of banking services. Popoola, who spoke on the Theme: Growth and innovation in retail banking: building sustainable business models, said the future of retail lending is in embracing financial technology for financial inclusion, adding that today and tomorrow belong to those who are able to play in retail banking. “The drivers of any sustainable retail lending business model include digitalisation and data-driven decisions,” he said.

He said credit bureaux (in emerging markets) have the capacity of expanding credit financing by $1.2 trillion, touching 613 million more people and reducing transaction cost by between 30 and 40 per cent. According to him, there are untapped opportunities to grow asset size and profits. He added that there is need to grow bank assets and profitability in a healthy way.

Popoola also said CRC Credit Bureau is positioned to help banks and other institutions successfully manage their retail lending business on a scale that enables exponential financial growth. The firm also provides opportunity for industry practitioners to discuss the trend in consumer/retail lending; discuss business models that work in retail lending in an economy with data/information challenge, appreciate and discuss the role of credit bureau in retail lending and International Financial Reporting Standards (IFRS) implementation.

He said Africa’s banking markets are among the most exciting in the world, adding: “The continent’s overall banking is the second fastest-growing and second most-profitable of any global region, and a hotbed of innovation. Africa’s banking revenue pools to grow at 8.5 per cent a year between 2017 and 2022, bringing the continent’s total banking revenues to $129 billion.

 

“Africa’s retail banking markets are ripe with potential and present huge opportunities for innovation and growth. “Revenue from retail banking will grow to $53 billion, representing about 41 per cent of total banking revenues of $129 billion. The expected growth in revenues will come from South Africa, Egypt, Nigeria, Morocco, Ghana and Kenya.”

Also, Dun & Bradstreet Credit Bureaux Managing Director/CEO, Miguel Llenas, said the future of banking is technology. He said financial technology (fintech) firms also play critical roles in deepening financial inclusion and are also giving the banks a good fight for the market space. According to him, banks and fintech firm needed to partner to deepen financial inclusion by taking financial services to the grassroots.

Source: The Nations

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