The Central Bank of Nigeria (CBN) is to make the national identification card amongst others, a criteria for accessing bank loans to further strengthen credit control and forestall the recurrence of non-performing loans in banks, Nigeria CommunicationsWeek can reveal.
With this development, those without the national identity card will have difficulty obtaining bank loans.
A national identity card is a portable document, typically a plasticized card with digitally-embedded information, that someone is required or encouraged to carry as a means of confirming their identity
The universal adoption of identity cards is supported by law enforcement officials who claim that it will make surveillance and identification of criminals easier.
The CBN said it will liaison with the National Identity Management Commission (NIMC), the body saddled with the responsibility of establishing, owning, operating, maintaining and managing the national identity database in Nigeria, with a view to enhance the National Identity Card project.
The apex bank explained that whenever the National Identity Scheme takes off, it will ensure that no new credit is extended to anybody unless the person has a national identity card.
A loan entails the redistribution of financial assets over time, between the lender and the borrower. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan.
Recent experiences in Nigeria relating to loan provisioning arising from losses by banks on margin loans are case studies on how credit risk can result in the erosion of banks’ capital.
It would be recalled that the CBN’s removal of banks’ chiefs was due to excessively high level of non-performing loans, which was attributable to poor corporate governance practices, lax credit administration processes and credit risk management practices.