Credit economy
Quote from admiral4eva on July 1, 2018, 11:54 AMI have read your writings on unlocking the economy via citizens data and credits ratings and I completely agree with you.However, more often than not, as seen from the past subprime mortgage lending crash in the US and microcredit defaulters commiting suicide in India lender often end up lending at predatory rates to people with bad credit who cannot get loans elsewhere defeating the purpose.How do we aviod this pitfall? Secondly I realise that there are already credit bureaus in the country, are they not granted access to bvn and.nimc records for their operations? And who regulates this sector as it holds alot of promise but hasnt really delivered as expected.
I have read your writings on unlocking the economy via citizens data and credits ratings and I completely agree with you.However, more often than not, as seen from the past subprime mortgage lending crash in the US and microcredit defaulters commiting suicide in India lender often end up lending at predatory rates to people with bad credit who cannot get loans elsewhere defeating the purpose.How do we aviod this pitfall? Secondly I realise that there are already credit bureaus in the country, are they not granted access to bvn and.nimc records for their operations? And who regulates this sector as it holds alot of promise but hasnt really delivered as expected.
Quote from Ndubuisi Ekekwe on July 1, 2018, 3:49 PMIt is easy to accuse lenders to be lending at predatory rates when they do not force anyone to take the loans. Provided they are transparent, they are not evil. Some have taken such loans to build empires. The key is having many options so that we do not have cartels and that is where regulations come into play. If you have many lenders, competition will reduce rates.
The credit bureaus are at infancy - CBN is playing a role there. Access to BVN and NIMC are largely used for identification, not to build risk models. Even banks are using BVN for ID. We need to transition to the data.
It is easy to accuse lenders to be lending at predatory rates when they do not force anyone to take the loans. Provided they are transparent, they are not evil. Some have taken such loans to build empires. The key is having many options so that we do not have cartels and that is where regulations come into play. If you have many lenders, competition will reduce rates.
The credit bureaus are at infancy - CBN is playing a role there. Access to BVN and NIMC are largely used for identification, not to build risk models. Even banks are using BVN for ID. We need to transition to the data.
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