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!

MTN and Etisalat vs Me

I ported from MTN to Etisalat about a month ago. That isn’t news.

I’m naturally a loyal person – I could have broken a few hearts but it’s nothing personal just business. After all I have been using same drycleaner all my professional life and the thought of dumping them, even when I moved to the other side of town, is painful.

But MTN had it coming – the data service doesn’t work well. Voice is trashy; and then they started stealing my money. It got so bad they could have done better if they robbed me at gunpoint in daylight or nighttime depending on what’s convenient, not for me, but for them.

So on a bright Saturday afternoon, my daughter playing the dutiful sidekick, we marched down to Etisalat and got the freaking phone ported.

It felt good.
Only for a while.

You see, Etisalat works but they are darn expensive. How I managed to go through double what I used to pay monthly at MTN (less the robbery) still baffles me. Also the data varnishes so fast I turned my phone bottom up to see if it’s leaking data. At least that should have formed a puddle, somewhere.

I don’t know what I’m going to do, an evil thought is forming though. I could get a dual SIM phone and use an Etisalat for the data and MTN for the voice but the thought of porting back isn’t pleasant. You see, I have some little imps working in my office who are going to jeer on toadstools if I dare port back to MTN. I’m sure those guys are getting paid to make my life miserable. That’s an aside.

Electronic Payment Gets Interesting

Somewhere in the news, PayPal finally admitted Nigeria into its elite club as you can now use your Naija issued cards to register. But come to think of it, was it because of the pressure? Or because Nigeria is less fraudulent? Probably not. My experience with PayPal has been shitty at best so I’m sure it wasn’t done for some altruistic reasons.

My take? They probably started seeing numbers showing that Nigerians not only travel too much (Lagos – London is one of the most lucrative routes in the world and Emirates flies 3 times into Nigeria on any day. Kenya Airways practically hovers over Lagos) but also spend just too much, including what they haven’t earned yet.

In my previous life hawking cards like omo alata all over Africa I witnessed the gradual build out of card transactions on Amazon, Alibaba, Asos, etc. and any half brained nitwit can imagine where the trajectory is heading. Now the dudes in PayPal are not dumb (not sure ignoring Nigeria before was a smart move) and are jumping into the fray.

Or could it be connected to the fact that Amazon has launched a competing payment service that works better (Amazon is simply amazing) and has over a hundred million users to start with?

In other news, I could see the gradual loss of influence on card business in Nigeria. Get me right, the card business is booming but the other non-card payment sector is growing at a fast greater clip. POS is finally looking like a decent investment. ATMs have become invisible – you just expect them to be there. Internet banking is still the black sheep of the family, it hardly works and you just tolerate it like a bad mother-in-law but this one isn’t going to keel over yet. I would give a pass mark to Cashless Nigeria – it hasn’t been easy but I think we will finally get there. In 5 years time, mark my word, we electronic payment will own this town.

I don’t know what issues Nigeria has with Mobile Money – it isn’t just happening. I believe that sweating to replicate what happened in Kenya is just a frustrating cul de sac. Of recent I have been having some beautiful thoughts on what I feel we could do to make the Mobile Money corpse walk (I’m not morbid, Hardley Chase said that!).

Enough of the ranting for today.

Cashless Nigeria by Force, by Fire!

I was recently reviewing a CBN report on Cashless Nigeria and it is scary to know that 65% of Cash in Circulation is outside the banking system. I guess everything the CBN can do to cajole those who have ecstasy at the sight of cash wouldn’t work. Time we did it differently. What will happen if the CBN changes the Naira design with 1 year for everyone to comply or the Ghana-must-go of cash becomes an anthropological artifact? The whole cash would have to come to the banks to be changed, isn’t it?

What if the CBN puts a cap on the amount you can get back as cash but the rest has to be paid into some accounts, even if it is a mobile wallet? What if there is no penalty for pay in but there is for cash out?

We have done even crazier things in Nigeria and we can pull this off. The whole Cashless stuff is kind of tiring when you consider the efforts guys have put in but then nobody said it’s gonna be easy. The rest of the country is going to be on Cashless in few months and I hope we can drag them kicking and screaming into the new dispensation.

Olowe of Ise

I used to wonder what our older folks were up to like 200 years ago – most often I come up with nothing apart from OduduwaLamurudu stories which obviously are folklore. Not that Oduduwa didn’t exist, I just don’t believe he fell out of the sky. Granted, there were some stories of Benin and their wondrous artifacts which the British stole.

Surely my Pales weren’t living in caves – and it wasn’t all about Ijapa and Yannibo.

But there was some dude, Olowe of Ise. He’s probably one of, if not, the greatest African sculptors who ever lived. He carved some magical doors and lintels; one is still at the British Museum till date. He was from Ise-Ekiti but worked far and wide. I’m not sure if I got my name from his but then, who would mind? You can read more about some of Olowe of Ise Biography on Wikipedia and see some of his doors here.

The only amazing, or do I say sad thing, about him is that the average lad on the street of Lagos, or Ise for that matter, doesn’t even know him. We all know about Lawrence of Arabia, King Arthur, bla bla, yet we don’t know such a great gem of history.