By Babatunde Ayedoju

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Amid the economic hardship that followed the fuel subsidy removal, the President Bola Ahmed Tinubu administration, last month, approved the first phase of the Consumer Credit Scheme, to be managed by the Nigerian Consumer Credit Corporation (CREDICORP).

The CrediCorp is a company owned by the Federal Government of Nigeria. According to information on its official website, CrediCorp, including its consumer credit guarantee fund, works in conjunction with the Central Bank of Nigeria (CBN), the financial sector, identity management, credit registries, fintechs, consumer protection, and policymakers to make loans available to creditworthy Nigerians.

The scheme, which according to the presidency is meant to boost social mobility among Nigerians, is also expected to enable qualified Nigerians to have access to credit to afford houses, cars, finance their businesses, and other socio-economic activities that make life more conducive, like what is obtainable in advanced countries.

According to media reports, the Consumer Credit Scheme, under the supervision of Nigeria’s CreditCorp, is in line with the company’s mandate to accelerate consumer credit access to 50 percent of working Nigerians by 2030. That means the scheme is for Nigerians in the working class category, especially civil servants, while the scheme will spread to other citizens subsequently.

Consequently, qualified Nigerians are expected to visit the online portal www.credicorp.ng to register before the deadline by the middle of May.

This scheme, though novel, is a successor to previous ones such as the formation of the People’s Bank of Nigeria, PBN, headed by the late Madam Maria Sokenu, with the late Tai Solarin as the Chairman in October 1989. The PBN was set up by the military Head of State at that time, General Ibrahim Babangida, to cushion the effects of his Structural Adjustment Programme (SAP) on the people.

Another one was the Anchor Borrowers Scheme brought by former CBN Governor, Godwin Emefiele. There were also SURE-P, YOU WIN, and several others. Likewise, in March 2019, former Vice President, Yemi Osinbajo, promised that the Muhammad Buhari administration would establish a People’s Money Bank. Unfortunately, the Bank never saw the light of day. Similarly, the current administration recently came up with a Students Loan Scheme but it is yet to fully materialize.

Speaking about the pros and cons of this novel social intervention scheme, Dr. Edamisan Ikuemonisan from the Department of Agricultural Economics, Adekunle Ajasin University, Akungba-Akoko, described it as a very good scheme that will ensure people have access to more money to meet their needs, thereby improving on their welfare.

He said, “It’s a good programme. We call it social safety net in economics. Such an economic programme helps people meet their daily needs which otherwise they would not have been able to meet. Things have become so bad that some people can no longer eat three times a day. They have to starve themselves to fulfill their daily obligations. People now have more costs to bear without an increase in their income. That makes this scheme a good one.”

However, the agricultural economist pointed out that there is no reliable database by which government can track those who need to key into this scheme and those who have benefitted already, saying that without a reliable database, it would only end up like similar social intervention programmes introduced by the government in the past which failed.

His words: “Before such a thing can be done, there ought to be a database to ensure that only those who need the loan access it. Nigerian Government has always been coming up with good policies but implementation has always been the challenge, because of the kind of people we are. For instance, with the introduction of this programme, some people will have been plotting how to circumvent it.

“Take a look at SURE-P and other government intervention programmes introduced in the past until recently when everything was scrapped. All of them had to be scrapped because some influential people were making money from them and the programmes could not benefit those who needed them. They only provide corrupt government officials with an opportunity to loot the state’s treasury.

Dr. Ikuemonisan recommended that for a programme like this to work, there has to be a reliable database and a special identification number for citizens, saying that with such special identity numbers, we will be able to trace the people who have benefitted from the loan,  “otherwise, it will only amount to a leakage of government resources.”

Likewise, Dr Harrison Idowu from the Department of Political Science, Adekunle Ajasin University, Akungba-Akoko, said that it is a good scheme because it would help low-income earners meet their needs. He pointed out that with the current economic situation, there are some needs such people cannot meet, no matter their savings.

He, however, noted that handlers of the scheme would have to eschew favouritism, so that it can succeed, adding that from time to time government comes up with good policies but because of corruption, those programmes do not benefit those who need them. He stated that in Africa, we have good economic policies, but our problem is always the implementation.

Raising another concern about the possibility of those who need the loan not being able to get it, he said, “Immediately I saw the advert, I clicked the link and it asked me for the loan amount I could pay back conveniently in six months. I was shocked because if you are a low-income or middle-income earner, hardly will you be able to conveniently pay back a substantial amount in six months. Maybe that is because it is just starting but it has to be looked into. Otherwise, middle and low-income earners will not be able to benefit from it.”

On the other hand, Dr. Chris Ofonyelu from the Department of Economics, Adekunle Ajasin University, Akungba-Akoko said that the programme might just be a mere avenue for looting because it will be difficult to hold the people in charge responsible if it fails. While pointing out that the money was not budgeted for, he added that there is no way to trace the amount that has been spent and how much is left.

Dr. Ofonyelu, while saying that the government will not, in the real sense, want to reduce poverty because it is a political weapon, added that if the government wants to be sincere, it should reduce the cost of education, provide free health care, transportation, and affordable transportation electricity.

“The cost of education in public universities is going up. Government should subsidize it, and provide free health care, transportation, and affordable electricity. Those are the things that will benefit the masses more.”