In the last few years, financial inclusion has become a regular phrase amongst organisations looking to deepen the reach of financial services to unserved and underserved people across the country. This has given rise to several products, services and strategies typically designed to help a large part of the population access financial services to better their livelihoods.

A critical part of the financial inclusion initiative is access to credit. This will help organisations transact business easier and individuals to have an enhanced lifestyle culminating in a healthy economy.

To create a credit driven Nigeria, we must first and foremost improve access to finance since it is a major dependency. According to the latest report from EFINA on Access to Finance in 2018, 63.2% of Nigeria’s adult population now have access to financial services, which showed an improvement of 4.8% from 2016. While this is a good indication of progress in our financial inclusion journey, there’s still much to be done to change the country from a cash-driven economy to a credit-driven one.

Here are three major factors that need to be addressed urgently:

Stakeholder Honest Active Participation
All players responsible for driving credit inclusion must play active and honest roles in ensuring that economically active Nigerians have access to credit, get the right information and support when they want it and in the simplest form. A prospective borrower or user of credit, be it as cash or asset, must be willing to provide true and sincere information that will support the type of credit required while financial institutions, cooperative unions and other credit providers must play their parts by giving the right information as well as matching the right products to the borrowers.

Improved Identity Management & Data Validation
We cannot make Nigeria a credit driven society without a proper identification and data management system. A peep into informal lending reveals that despite the lack of technology, borrowers are granted cash or given items on credit based on the fair knowledge of their identity and transaction volumes.

For instance, India has the Aadhaar, considered to be the world’s largest biometric database registering over 1 billion people. It stores basic information of all residents and attempts to prevent identity fraud. This has been described as a strategic policy tool for financial inclusion.
Kenya and South Africa also have good ID systems which play significant roles in the credit inclusion and spread.

Today in Nigeria, with limited identification provided by the Bank Verification Number (BVN), there has been a lot of improvements around the provision of credit and this is expected to soar if more people are included and all isolated databases such as drivers’ license, international passports, SIM card registration, National Population Commission and the National Identity Management (NIM) scheme are harmonized.

Active Legislation and Law Enforcement
As a country, we need to respect the provider of capital and honor agreements. Be it capital provided by shareholders, customer deposits, or debt, we must create laws that are up to date with the realities of our time and hold those who err to account. We live in a country where people borrow with the intention of not paying back and legal enforcement is weak most times or delayed leading to huge capital erosion. If a man does not see the need to pay back a ₦24,000 mobile device finance loan, I see no reason why such will be granted ₦300,000 rent advance even if he or she earns a good salary.

Many years ago while we were in primary secondary school, my mum led my siblings, cousin and myself to a chronic debtor who refused to settle the supplier credit offered her and we ordered food from her new restaurant and ate to our satisfaction. After we finished our meals and made to leave, she presented the bill.

My mother smiled and said, “Use the outstanding balance of my debt to cover this”. The woman almost fainted but the scene was awesome. Bad behavior must be cautioned to make our country a credit driven society. Legislators must make the right laws to support a credit system while enforcement must be activated by the Judiciary and law enforcement with a close collaboration with identity management organizations which is critical for uniqueness and trust.

At the forefront of making Nigeria, a credit-driven society is Zedcrest Capital Ltd. Led by Adedayo Amzat, CFA, the company through a range of subsidiaries including Zedvance and Zed Cap Partners, is redefining the nation’s financial landscape by providing cutting edge services to its teeming customers nationwide. Currently a top-three player across the brokerage, investment, and consumer lending spaces, Zedcrest Capital is championing the financial inclusion thrust with a technological approach.