Technology, digital records accelerating lending in Nigeria

Ife Ogunfuwa

Experts in the financial technology industry have observed that banks, credit institutions, hedge funds, among others, are relying heavily on customer data to validate and approve loan requests.

The stakeholders, who spoke at the Social Media Week Lagos 2020, noted that the rising demand for business, personal loans and other credit facilities could only be satisfied by reliable digital data.

According to them, reliance on technology to make data-driven decisions has become important for financial institutions.

At the Social Media Week panel session organised by SystemSpecs, they pointed out that financial institutions had processed over $100bn worth of credit loans for Small and Medium Scale Enterprise over the years.

The panel was made up of the Co-Founder, Lidya, Tunde Kehinde; Divisional Head, Payment Applications and Verticals, SystemSpecs, David Okeme; Business Head; Digital Banking Group, Access Bank, Esther Obiekwe; and Founder and CEO of Arvo Finance, Ayotunde Bally.

The discussants agreed that people will only be able to access credit easily and seamlessly when there is adequate technology and data to back the process.

Kehinde noted that the next phase of lending in Nigeria would require digital records, adding that it was very important for loans to be paid back on time in order to build a solid credit history.

“In the next two to three years, there would be millions of credit data points. So, if you build a solid credit history, you will be able to dictate your own price an interest rate,” he said.

Speaking after the session, the Divisional Head, Payment Applications and Verticals, SystemSpecs, David Okeme, said the organisation was working towards empowering people to be able to access credit fast to meet their short-term needs.

“We have been able to tap into the resources that we have which is data and technology including digital channels, to create a fantastic experience with lending,” he said.

“SystemSpecs started by doing a pilot with a deposit money bank, and today, we have on-boarded hundreds of other small lending organisations to make sure that we push the level of access down the line. We have salary data and that has come from our over 20 years of operation within the whole payroll processing space and the data increases personalisation required for the kind of experience we are talking about, as this helps to determine what will technically be called a credit score,” Okeme explained.

On the ease of gathering credible data sources, Bally said that it was important for banks, telecommunication operators and other data collectors to share data with fintechs, who were there to deepen financial inclusion and complement the activities of banks.

“This issue of open banking and openness is only an issue in Nigeria. Transparency and sharing of data is our key issue and not that there is lack of data,” he said. https://punchng.com/technology-digital-records-accelerating-lending-in-nigeria/