02 Aug Credit Reporting Act – Download Official (Gazette)
Presidential Enabling Business Environment Council (PEBEC) has endorsed a Senate bill that seeks to provide a legal framework for Credit Bureau Services (Credit Bureau Bill – CBB) in Nigeria.
Sponsored by the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Rafiu Adebayo Ibrahim, the bill would facilitate better access to credit for MSMEs.
Secretary to PEBEC, Dr. Jumoke Oduwole, stated this at a public hearing on the bill that even though there was currently a CBN guideline regulating the operations and activities of Credit Bureaus in the country, it was vital to support their services by law.
“This will facilitate credit information sharing between the Credit Bureaus and lenders such as banks and other financial institutions; inevitably lead to an increase in the availability of credit and ultimately reduce cost,” she said.
If passed, the Credit Bureau Reporting Act 2017 would lead to a favourable development in Nigeria’s World Bank Doing Business rankings under the “Getting Credit” indicator. Last year, the World Bank informed the Nigerian government that for the country to be ranked on that indicator, borrowers must be able “by law to have the right to access their data in a credit bureau or credit registry.”
In her endorsement, Dr. Oduwole urged the lawmakers to work towards the gazetting of the bill by the end of March 2017 so that Nigeria could meet the World Bank’s deadline for its rankings this year.
“We are appealing to the Senate Committee to use its good offices to facilitate the expeditious passage of the Bill in both Houses, and the gazetting of the Bill by the end of March,” she said.
Dr. Oduwole, who also serves as Senior Special Assistant to the President on Industry, Trade and Investment, recommended some modifications to the draft of the Bill.
As said by her, it is a cause for concern to mandate Credit Bureaus to set up offices in all states of the federation, as this will generate fragmentation of data, and would be a direct contradiction of the reason for creating a Credit Reporting System.
In addition, she stated that this was also not in line with international best practices. Furthermore, the minimum capital requirements of Credit Bureaus should not be put in the Act, but “retained in the CBN Guidelines, so that they may easily be changed as may be prescribed by the CBN from time to time.”
Speaking at the hearing, Senate President, Bukola Saraki, who was ably represented by majority leader, Ahmed Lawan said the Senate was prioritising issues around enabling the business environment. He said the Bill “would improve the lending environment in Nigeria and significantly reduce issues of non-performing loans.”