A formal recognition of Credit Bureaus started in Nigeria in 2008 when the Central Bank of Nigeria (CBN) issued guidelines officially on their licensing and operations. Three Credit Bureaus were licensed in 2008:
The CBN supported the credit bureaus by mandating all banks and financial institutions under their jurisdiction/supervision to use at least two of the three credit bureaus. All commercial banks, MFBs, and all specialized institutions – Federal Mortgage Bank, Bank of Industry, BOA, Nigerian Mortgage Financing companies, Development Banks, leasing companies, primary mortgage institutions, asset management companies etc. are on the credit bureau platforms.
There are three main things these institutions have been mandated to do:
Data submission is regulated with the use of the Common Data Template which was designed by the CBN, IFC and CBAN and launched in 2016. Data collected are in four categories:
Data submission is usually done at least once a month and updates are done anytime it is required. Some data are not available in the credit bureaus such as income or tax payment. The other sources of data i.e. alternative data from non-financial organizations such as Electricity distribution companies, cooperatives, multinationals, microfinance institutions, real estate and pharmaceuticals are also collected. There is a Dispute Resolution mechanism to resolve issues at a stipulated time to ensure accurate and updated information is readily available to stakeholders.
The main products of the Credit Bureaus are as follows:
The purposes of the Credit Reporting System are as follows:
Credit Bureaus facilitate ease of doing business by significantly improving access to credit especially for the disadvantaged sectors of the economy – consumers and SMEs.
The World Bank findings reveal that, with the introduction of credit bureau:
Nigeria has also benefitted in many areas including:
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