WADOO!!NEWS: ICA set to shore up Nigeria’s economy through credit management base
The newly elected Institute of Credit Administration President/Chairman of the 3rd Governing Council of the same body and Managing Director, Mobil Oil Nigeria, Plc., Mr. Adetunji Oyebanji, unequivocally stated during the induction of new members in Lagos that the council for effective credit management in Nigeria will advocate empowering the economy to create wealth and jobs through advocacy and enlightenment about the role of credit,
infrastructures necessary for sound credit system, business character that encourage credit availability, government initiatives that facilitate access to credit, lenders attitude to borrowers.
Oyebanji said, there must be abundance of credit availability in monetary and trade terms to fuel exports of made-in-Nigeria goods, as a major driver of the economy. Nigeria must engage free market economy in order to achieve remarkable overall resilience in economic activity, employment and fiscal performance.
According to him, ICA has a pivotal role to play as a catalyst for the business community through necessary credit management tools and provision of information, which would mitigate organisation’s vulnerability to bankruptcy, pointing out that while credit facilitates economic growth, misuse of credit can also debilitate. Credit should be based on needs, not solely wants.
In addition, Dr. Luka Marne, who discussed on the causes of credit failure said, inadequate understanding of applicant’s business structure/cycle is one of the reasons credit fail. He also that improper customer profiling, improper monitoring system, poor credit appraisal, fund mismatch I.e using short term fund for long term project. Marne said, change in monetary/economic policy I.e interest rate, inflation etc is tantamount in causing credit failure in business. He also said that natural disasters, economic recession like we had few years ago, poor money management and financial illiteracy among others.
In the same vein, G.R.E Ozulumba, why discussing on why people and organisations default in credit obligations agree that there is need to properly ascertain customers’ requests but unfortunately, many customers cannot differentiate the facilities meant for working capital and those meant for fixed assets. He advised further that customers with doubtful integrity should not benefit from banking facilities as they will not meet their credit obligations to avoid default of any kind. Ozulumba said that lack of well organised and aggressive debt recovery teams creates atmosphere that make many debtors not to take the banks serious..