On the 30th of May, 2017, the Acting President of the Federal Republic of Nigeria, Professor Yemi Osinbajo, assented to the Bill on Credit Reporting (Credit Reporting Acts). This Act, in conjunction with the Collateral Registry Act, signed same day, aimed to facilitate the achievement of the goals of the Presidential Enabling Business Environment Council (PEBEC) set up by President Muhammadu Buhari in July 2016 to promote the Ease of Doing Business for existing businesses and encourage the creation of new MSMEs.
The Credit Reporting Act established the Credit Bureaux, responsible for collating critical information from “credit information providers” such as credit worthiness, asset base and financial obligations of loan applicants. These credit ratings are transmitted to “credit information users” who operate in accordance with provisions of the Act such as lenders (banks), retailers, telecommunication companies, and other institutions that may provide services on credit to determine eligibility for financing.
This Act promotes access to credit and credit information, enhances risk management, eliminates the rejection of credit applications due to insufficient credit history, broadens the scope for acceptable collateral and reduces the incidence of defaults on loan repayments.
The Credit Reporting Act also institutes an Alternative Dispute Resolution Centre to foster amicable resolution of disputes between parties involved in credit financing agreements.
The responsibility for licencing Credit Bureaux is domiciled with the Central Bank of Nigeria.