BVN will work the consumer credit magic

I really don’t envy the folks at CBN. They have the dirty task of making FOREX stable, keep Naira from running around like a kid with ADHD, regulate banks and bankers (two very different things) and come up with the miracle of financial inclusion. Don’t ask me when the last would happen or if it would ever happen. I’m not a miracle worker!

Expanding the financial market and the economy has been a major headache to every CBN governor since my grandfather was born. Even years since he died nobody has been able to fix this. It is no brainer, extend credit and the economy would boom. Everyone needs it – big companies, small companies, average Joe and BOP.

Without credit, there won’t be middle class, or that’s what economists said. But even the dullest Nigerian bankers know you are in soup if you dunk out loans like Father Christmas. For most borrowers, that would be the last time you would ever see their faces, or maybe even their backs.

The problem? No decent ways of identity. Almost everything in Nigeria can be forged. That shouldn’t surprise me because even at a personal level, I haven’t met any authentic woman – fake hair, fake lashes, fake colors, fake height, face hood, fake trunk, fake accent (country jumping!), as in, fake every damn thing you could imagine. Knowing they can’t be caught, borrowers have used every fake documents you could imagine.

The truth is, most borrowers are clean but the few bad ones muddy the water up for everyone. But then one bad loan is enough to wipe out all the income from the good ones. You won’t blame bankers to tread like they are in a field of black mambas.

We tried to bring credit bureau into the mix, no dice!

So bankers wised up and cooked up BVN, a proper child of necessity. Bankers need to give out loans, especially when CRR is now taller than the Burj Khalifa, because bankers can only (I mean only, when banking is done properly) make money from loans. With fewer loans there is a massive pressure on banks by shareholders to still dole out dividends, loans or no loans. To make a bad case worse, most banks have institutional investors on boards or as major shareholders and trust me, those guys don’t give out love! Portfolio performance is the only song in their albums.

So what will this BVN do? Or what’s BVN to start with?

BVN is Bank Verification Number – a type of unique identity for financial customers and you have to provide it to all your banks. It is a biometric identification system and short of cutting off your fingers at Oko Oba Abattoir, there is no hiding place. Come 2015, you can’t do any banking without your BVN.

What are the implications? Simply nowhere to hide. If you owe bank A money, with your BVN, they will track you to Bank X and collect with tulasi. If you do fraud and your BVN is blacklisted, you won’t be able to open accounts anywhere else again. Just try and explain to your new employer why you want to be collecting your salary in cash.

So when there is tidiness on identity, what happens next? Forget about all the fancy benefits on BVN website, the reality is, Bankers will know you and short of dying or running away to the USA, they will find you.

The interesting thing is that if banks know you, they will probably give you loads and loads of loans. Woe betide you if you default. Say a warm–bear-hug hello to auto-loans, mortgages, asset finance, etc. Educational loan may still be dicey, what if you got a 3rd class?

More loans means consumer companies will sell more goods. More sales means more tax revenue for Fashola, Jonathan and my cousin, a local government chairman.

I suspect non-banks will now latch on to the BVN thingy – embassies will demand it; it must match the statement you bring. And if you owe your bankers money and embassy comes calling, you ain’t going no where!

Telcos will now give you postpaid line, don’t worry just default. They will meet you at Conakry. Credit Bureau will be happy. I mean very happy.

One fall out of the BVN driving the credit thingy – there would be more cars on the road and worse traffic. So either I move house, wake up earlier or get a consumer credit to buy a chopper. Lord have mercy!