‘Database on delinquent debtors launched’
An independent searchable database of recalcitrant and delinquent debtors in Africa has been launched.
Team Lead, Debtors Africa, Mr Bayo Awoyemi, said the Debtors Africa website is a searchable database of delinquent borrowers which enables speedy assessment of the character of a prospective customer.
He noted that investors can use the database as a starting node for assessing the quality of the management of a business they intend to either partner or invest in.
“The searchable database is designed to allow contributors, such as banks, loan fintech and credit companies, cooperatives, tax authorities, private businesses, government agencies and utility providers among others to list their delinquent debtors and their indebtedness on the platform as a contributor to the platform,” Awoyemi said.
According to him, with the listings, a moral and business burden is placed on delinquent borrowers as prospective lenders would use the library to fact-check the borrowing history of a loan applicant and use the history to set up a character rating index that would guide credit appraisal memorandums (CAMs) and inform acceptance or decline of credit requests.
He explained that by subscribing to the platform which is free, users are able to search for delinquent debtors in Africa using the company name or the name of the directors of a company, track the repayment progress of a delinquent debt and other related information to the debt, receive and monitor credible and reliable information on debt related activities in Africa and mine delinquent debtors data by sector, amount owed, and many other details.
“Over the years, the names of delinquent debtors have been published on various media platforms with no central portal to harness the information published or achieve the objective creditors desire, which is repayment and resolution.
With Debtors Africa, the new model provides a central hub to access this information and goes beyond naming and so-called “shaming” to informing prospective creditors and other institutions that require character validation, while name removal from the database is subject to the review and removal by the contributor after debt resolution is attained,” Awoyemi said.
According to him, unlike the days when banks published their delinquent debtors list on online digital platforms in which they had no control of content update, modification and removal , the Debtors Africa platform puts the burden on creditors who are expected to take the action of delisting themselves further to showing proof of resolution, such that it also serves as an independent check on contributors who may choose to delist a debtor based on mutually agreed terms of settlement.
He noted that the emerging global economy requires more credit but it also requires more confidence in the credit-to-debt-to-credit loop.
“The stronger the integrity and the deeper the financial resources that support the loop the better the financial system and economy becomes.
The spread of the digital economy, big data, artificial intelligence and informatics will lead to new approaches of credit evaluation, initiation, monitoring and recovery,” Awoyemi said.
Managing Editor, Proshare, said the Debtors Report, which was done in partnership with Proshare, represented a culmination of a detailed review of the credit experiences of Nigerian banks in the last two decades and reveals the challenges of a local lending cycle that has seen lenders become victims of the tyranny of bad and delinquent debtors.
He pointed out that the report makes a case for a new approach to the lending cycle to ensure that integrity, professionalism and evidence-based best lending practices are strictly followed to guarantee the sustainability of the financial system and the prosperity of the larger economy.
According to him, key highlights of the report included the industry and its debt position, definition of a delinquent debtor and how this has changed over the years including how banks end up with bad debtors, the sectors and regions affected and impact on GDP, provisions of the law as regards credit collection and recovery in Nigeria, the AMCON approach, lessons learnt, and the way for banks to adopt a revised credit recovery framework, case study of approaches adopted in recovering debt; and fresh methods a new approach offers to banks troubled by delinquent debts. – Thenation