The Federal Government, through the Nigerian Consumer Credit Corporation (CREDICORP), is set to roll out a credit system that will link individuals’ credit records to their National Identification Numbers (NIN), making it easier to assess creditworthiness and increase access to loans for Nigerians, the National Orientation Agency (NOA) has announced.

In its weekly bulletin, the National Orientation Agency revealed that the upcoming system will link Nigerians’ credit profiles to their National Identification Numbers (NIN).

According to the report, as CREDICORP broadens its scope, it will develop a centralized credit infrastructure capable of accessing and reviewing the financial borrowing history of individuals, all in a bid to promote greater transparency and accountability.

The report noted that the new credit system will connect each Nigerian’s credit score to their National Identification Number (NIN). A credit score is a three-digit figure typically between 300 and 850 that reflects a person’s financial reliability and likelihood of repaying loans.

The agency emphasised that credit scores play a critical role in how banks and financial institutions determine eligibility for loans, credit cards, and other financial services.

“These scores help lenders evaluate risk and make informed lending choices. The closer a borrower’s score is to the higher end of the scale, the greater the amount of credit they’re likely to qualify for,” the agency explained.

This development follows the federal government’s approval, on April 24, 2024, of the initial phase of the national consumer credit initiative, which included the launch of an online platform for Nigerians to register their interest in participating.

On June 12, President Bola Tinubu announced that a new consumer credit programme would launch in July, targeting 400,000 young Nigerians, including members of the National Youth Service Corps (NYSC), to improve their access to financial support.

According to the president, the initiative will be rolled out through the Nigerian Consumer Credit Corporation (CREDICORP), which has already provided credit to over 100,000 people, including 35,000 government workers.

NOA has confirmed that starting in July, the federal government will make interest-free consumer credit available to all eligible Nigerians, regardless of their social or economic status.

The agency noted that the second phase of this initiative, to be managed by CREDICORP, builds on the initial rollout in September last year, which focused exclusively on civil servants.

“The expansion of affordable credit access across the country is the driving force behind this next phase,” the agency stated.

Under the updated scheme, applicants can access up to ?2 million in interest-free loans, in addition to other financing options available at low, single-digit interest rates.

In contrast, the first phase allowed beneficiaries to obtain up to ?3.5 million in loans, repayable over several years, with interest rates ranging from 2 to 4 per cent, effectively around 2 per cent annually. This new round, however, removes interest charges entirely.

Uzoma Nwagba, the Managing Director of CREDICORP, explained that this phase marks a significant transformation in Nigeria’s credit system. Going forward, a person’s National Identification Number (NIN) will serve as the foundation for building and accessing their national credit profile, consolidating data from banks, fintech companies, and microfinance lenders.

“This represents a major shift in the way credit is structured in Nigeria,” Nwagba said.

“Loans taken from any source whether a traditional bank, microfinance provider, or digital lending platform will now be recorded and monitored, with real implications for borrowers,” said Uzoma Nwagba.

He explained that the new system is designed to prevent loan evasion, introducing strong enforcement measures and significant consequences for individuals who default on their repayments. (BusinessDay)