The Managing Director of Heritage Bank Limited, Ifie Sekibo, at the weekend in Lagos said poor identity management remains the greatest hindrance to boosting access to credit, especially for small and medium enterprises in the country.
Speaking as a guest at the Finance Correspondents Association of Nigeria, FICAN annual conference, Sekibo said identity is a lender’s foremost collateral, which unfortunately is what is missing in this economy.
That is why, he continued, “the day banks can verify where you live, everybody will get a loan with ease because you cannot run away.”
Represented by the bank’s Divisional Head, Strategy and Business Solutions, Segun Akanji, Sekibo said the dearth of effective and standard identity management infrastructure makes access to credit for the SMEs in Nigeria tough. This also why banks only see unmitigated risks when the issue of SMEs is in the front-burner, he stressed. Continuing, he noted that but for the identity management crisis in the country, there would have been no need for bank customers to provide collateral if the bank were sure the customer’s residence will not change overnight.
“But the problem is this, I don’t know where you live. The address of the company is not where you live. And you can wake up in Festac today, and tomorrow you move to Ajangbadi or Victoria Island. You don’t have to tell me (the banker). And that is a huge problem for banks,” he said.
The problem is that “there is no value in our identity management as we have it. So, it is not just about banks, it is about the holistic structure where there is no value to the person that each of us will represent”.
He gave instances of developed economies such that “when you are changing accommodation, you will be the one going to your bank, hospital, everywhere, you will dedicate a day in a week until you go around to everyone and inform them of the address change.
“You can argue that the banks have driven the government to some identity management system through the BVN, but the problem is that the infrastructure that will keep everybody in the homes where they live and not just change is non-existent.”
For him, a situation where “people take a loan from banks and change accommodation… run away to Ibadan and cannot be traced must change.
“But how do you do that? It is very simple. All the benefits that is allocated to you as a person… the day you relocate like that, you are as good as dead.
“Like when you live abroad, once you misbehave with your identity, you cannot bank, your credit goes bad, you cannot go to a hospital and everything else goes bad and you cannot do anything. So, you have a responsibility to yourself and the country that supports you to report yourself.”
Speak as a member of a panel of discussants; Akanji suggested that the Federal Government concentrates on four vital platforms necessary for expanding the non-oil sector, such as education, health, infrastructure, and stable macroeconomic environment.
A review of the 2018 Global Competitiveness Report, he noted showed that the top 10 countries have been consistent, just as India and China, on the top 15 which are the biggest in manufacturing and non-oil export earnings.
To earn well from non-oil exports, he said, Nigeria must properly fund the education of its citizens, pointing to Japan and Israel as examples of nations that used education to grow from nothing to something.
He spoke of the need to invest in the health sector, stressing that the $1bn lost to medical tourism by Nigeria does not include the amount spent by millions who travel for holidays and use such opportunities to go for medicals for which there are no records. There is also millions of Naira spent on drugs brought into the country unaccounted for, which can only be stopped if quality healthcare is made accessible to the majority.
He also noted the anomaly of thinking agriculture whenever there is a reference to the non-oil sector, arguing that the sector is far bigger than Agric.
Akanji also wonders how difficult it is to prioritize investment in infrastructure; just as he lamented the level of policy inconsistency and the fact that from when an investor decides to set up in the country, there is no guaranty that before he puts everything together the policy that attracted him would not have changed dramatically.
He also spoke of the need to encourage local manufacturers by patronizing made-in-Nigeria.
For him, Nigeria needs to “leave all of the economic jargons and get practical.”