Nigeria’s Consumer Credit Scheme Is A Great Policy

Very commendable – this is a GREAT policy from the government:  “The Nigerian government has approved the takeoff of the first phase of the Consumer Credit Scheme, a pivotal initiative aimed at revolutionizing access to credit for Nigerians across the country… The scheme, spearheaded by the Nigerian Consumer Credit Corporation (Credicorp), marks a significant step towards enhancing financial inclusion and empowering individuals to achieve their economic aspirations.” If this works, many good things will happen.

Notice that our economy has not been responding very well to monetary tools like interest rate adjustments. Those tools are largely created by the Western economies with solid consumer credit systems. In Nigeria, we do not have any developed consumer credit system.

So, when the Central Bank of Nigeria (CBN) hikes interest rates, we hardly get any reduction in Demand since everyone uses cash here, and interest rates have minimal impacts since only very few have access to credits, to be influenced by the prime rates. In other words, the tools which the CBN uses hardly affect consumer spending which needs to be tamed to bring inflation down.

In reality, rate hikes in Nigeria push the cost of capital high for corporations and producers. and that reduces Supply which is actually needed to bring inflation down; corporate credit is relatively more developed than consumer credit in Nigeria. That is why for years, we have not been lucky to tame inflation.

So, if this consumer credit system works, good things will happen. The apex bank will have space to breathe with its tools. Good one, Team Nigeria. The key is a great execution; the policy is a good one.

—Our press release

President Bola Tinubu has approved the takeoff of the first phase of the Consumer Credit Scheme.

Consumer credit serves as the lifeblood of modern economies, enabling citizens to enhance their quality of life by accessing goods and services upfront, and paying responsibly over time. It facilitates crucial purchases, such as homes, vehicles, education, and healthcare, essential for ongoing stability to pursue their aspirations.

Through responsible repayment, individuals build credit histories, unlocking more opportunities for a better life. Additionally, the increased demand for goods and services stimulates local industry and job creation.

The president believes every hardworking Nigerian should have access to social mobility, with consumer credit playing a pivotal role in achieving this vision.

The Nigerian Consumer Credit Corporation (CREDICORP) achieves its mandate through the following:

(1) Strengthening Nigeria’s credit reporting systems, ensuring every economically active citizen has a dependable credit score. This score becomes personal equity they build, facilitating access to consumer credit.

(2) Offering credit guarantees and wholesale lending to financial institutions dedicated to broadening consumer credit access today.

(3) Promoting responsible consumer credit as a pathway to an improved quality of life, fostering a cultural shift towards growth and financial responsibility.

In line with the President’s directive to expand consumer credit access to Nigerians, the Nigerian Consumer Credit Corporation (CREDICORP) has launched a portal for Nigerians to express interest in receiving consumer credit.

This initiative, in collaboration with financial institutions and cooperatives nationwide, aims to broaden consumer credit availability.

Working Nigerians interested in receiving consumer credit can visit www.credicorp.ng to express interest. The deadline is May 15, 2024.

The scheme will be rolled out in phases, starting with members of the civil service and cascading to members of the public.

Ajuri Ngelale

Special Adviser to the President

(Media & Publicity)

Very commendable – this is a GREAT policy from the government:  “The Nigerian government has approved the takeoff of the first phase of the Consumer Credit Scheme, a pivotal initiative aimed at revolutionizing access to credit for Nigerians across the country… The scheme,… pic.twitter.com/CnXBwZxxVj

— Ndubuisi Ekekwe (@ndekekwe) April 25, 2024

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