Welcome to the Credit Management Professional Dialogue, CMPD, where we interrogate the real issues shaping Nigeria’s credit economy from the lens of licensed credit administration management professionals, not popular opinion.
This week, we address a dangerous practice that continues to undermine Nigeria’s financial system: credit appraisal and approval without an independent “Company Credit Report (CCR)”. Let me be direct. This is not just a procedural lapse. It is complicity.
Complicity in what? Complicity in destroying capital, eroding trust, and weakening the very foundation of a credit-based economy that Nigeria is working hard to build under the NICA Act No. 26 of 2022.
Why CCR is Non-Negotiable
An independent Company Credit Report is the only unbiased source of truth in a credit transaction. It tells you what the borrower does not want you to know. It reveals aggregate exposure across credit-granting industry, payment behavior over twenty-four months, litigation records, and director linkages that may not appear in the glossy financial statements presented by the borrower or credit user.
When you approve credit without this independent verification, you are making a decision based on incomplete information. Worse, you are making it based on sentiment. “He is my cousin.” “She attends my church.” “This is a government contractor.” These statements have no place in a credit file. They are not risk factors. They are red flags.
The Industry Reality We Cannot Ignore
From our investigations at NICA, over sixty percent of corporate credit granting facilities defaults in the last five years had one common thread. The approval was granted without a CCR. The credit officer relied on management accounts prepared by the credit applicant and verbal assurances from influential management and board members. Six months later, the credit-user defaults and it is discovered that the same company had hidden exposures across five other institutions and a history of bounced transactions.
This is not an isolated incident. It is a pattern. And the pattern is expensive. It drains bank capital, increases non-performing loans, and ultimately raises the cost of credit for everyone else, including the honest borrower.
The Professional vs. the Sentimentalist
A Professionally Certified/Licensed Credit Administrator, does not operate on emotion. He operates on evidence. The moment sentiment enters the credit appraisal and committee rooms, objectivity leaves. And when objectivity leaves, credit risk management collapses. The NICA Act No 26 of 2022 is clear under Section 25(2). Credit management functions must be performed only by credit administration management professionals who adhere to our Code of Ethics. That Code demands that every credit decision must be supported by verifiable and independent data. Approving without a CCR is a breach of that Code. It exposes the credit officer to disciplinary action and the institution to legal liability.
The Systemic Consequence
Sentimental lending or credit granting does not just affect one bank or a corporate organization. It affects the entire economy. When bad loans accumulate because of relationships rather than repayment capacity, the institution becomes weak. When the institution becomes weak, it reduces lending to genuine MSMEs. When MSMEs cannot access credit, jobs are not created and growth stalls. This is how micro decisions become macro problems. It is how a single sentimental approval can contribute to systemic risk.
The Way Forward
The solution is not complicated but it requires discipline. Every credit file above a material threshold must have a CCR that is not more than ninety days old. No exceptions. No waivers for “big clients.” The credit committee must document how the CCR data influenced the decision. And the certified credit management professional must have the courage to dissent when management and credit board committee tries to override the data.
At NICA, we are moving to make this mandatory. We are engaging the Central Bank of Nigeria to enforce CCR compliance as a condition for risk-weighted capital treatment.
A Call to Action
To credit line providers, both local and foreign, I say this: support NICA’s mandate. Require NICA-certified/licensed professionals in the credit departments you fund. Insist on CCR-backed approvals in your loan agreements. This is not protectionism. It is protection of your capital and protection of the Nigerian credit market.
To credit management professionals, I say this: your license is your integrity. Do not trade it for a relationship that will cost your institution and the nation dearly.
Final Thought
Credit is not charity. It is a contract of trust based on verifiable facts. When we allow sentiment to replace facts, we betray that trust.
As I have said before, a credit officer who approves without a CCR is not being generous. He is being dangerous. He is gambling with depositors’ money and the stability of the economy. “Credit is a profession. NICA licenses it.”
Let this be our professional red line. No CCR, no credit. No exceptions. For any inquiries, send an email to: registrar@icanigeria.net, Copy ceo@icanigeria.net
Some of NICA Governing Council Members
NO. 59
