Banks may deny telecoms, electricity debtors credit facilities

CBN Governor, Mr. Godwin Emefiele

There are indications that individuals and organisations that have enjoyed post-paid services from electricity distribution companies and telecommunication firms may be denied future credit facilities from financial and non-financial institutions.

This is because the utility companies have started enlisting the services of credit bureaux in the country to keep borrowers’ information in order to build a credit history that can be used to determine if an applicant will default if granted a loan.

The Managing Director/Chief Executive Officer, CRC Credit Bureau, Mr. Tunde Popoola, told our correspondent in an exclusive interview that the telecoms firms and the electricity distribution companies were submitting the information of those who had enjoyed their post-paid services without paying.

According to him, all the information will be kept in the database and used to assess the credit worthiness of the organisations or individuals involved by the utility companies and other financial and non-financial institutions when fresh lending services are requested for.

Popoola said, “The information submitted is borrowers’ information or the list of people who have enjoyed post-paid services with telecoms companies because it is a form of credit. They are using the services ahead of payment. The same goes for the electricity distribution companies for those who use post-paid metering system, who consume electricity and pay later.

“The essence of our existence is to be able to have a large database that can allow lenders to have credit history so that the utility company can perform credit checks on those who approach them for credit services.

“If you have not borrowed, then you don’t have a credit history; and if this does not exist, it is difficult to assess your ability to repay obligations.”

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On the other hand, the CRC boss said the data could be used to build a good history that could facilitate access to loans and post-paid services if the client had been meeting up with obligations as and when due.

As result, he said that people were often encouraged to obtain loans and pay back in order to establish good credit records that would facilitate access to future lending facilities.

He said, “If you had enjoyed facilities in other places and you deferred payment; that kind of information, even though not in the banks, can be very useful to assist in building a credit history for you.

“For those using telephone post-paid services, it is good that the telecommunication companies submit such information to the credit bureau because those are very legitimate borrowings, which are used in constructing a credit history for their clients.

“When you travel and there is an agreement with the agency that you will pay in instalments for the flight ticket, the information can be submitted to the bureau to build a good credit history.”