Chris Onalo
3 August 2008
opinion
Lagos — In today's world economy, credit market is a necessary evil. It has become necessary as it is one of the fundamental engines of economic and technological development. In a way, one could compare credit to oxygen; with very few exceptions, no company, bank or specific government parastatal can survive if deprived of it. A healthy banking sector at local level and a stable international financial environment are essential to the survival of an efficient credit system. But credit can be evil, as it implies the emergence of bundle of risks, both for the lender and the borrower, the giver and taker of credit.
Sadly, there is no institution of higher learning in Nigeria which offers any programme of study on credit management, a situation rightly responsible for the dearth of skilled credit managers in the country. Credit management has become more critical in the light of the impact the changing economic climate has on all businesses. As the economy grows and expands, credit granting corporates including industrial and financial institutions, are enlarging and consolidating their credit or loan portfolios and services in order to compete within their industries with a view to growing their profits. The need for enhanced credit quality control has become more crucial today for any institution or government to succeed.
Our fragile domestic economy, imparted by global implications, sophisticated clientele, makes vulnerable the problems of management of credit. Business credit market operators across board must do a better job of structuring their credit policies and procedures, including reviewing and monitoring portfolios, and making sure that they have put in place the appropriate preventive measures, faster response time to early warning signals and problems associated with modern credit management.
That credit plays a central role in any nation's economic development, is no news as globalization and capital market liberation has brought to fore the need to pay attention to the role of credit in the nation's economic revitalization effort. In the turn of the 70's, Nigeria was a lending nation having little or no need to resort to seeking for credit facilities from its trading partners. The story however changed in the eighties when the country could not finance her import bills and found it difficult to attract credit from her major trading partners. The situation had since deteriorated as domestic debts have also been on the increase. This translated into a situation where most of the importers of foreign goods and services sell on credit in order to keep their businesses going. The renowned and popular big names in the Nigerian manufacturing sector as well as giants in the distributive trade have all suffered tremendously and even folded up due to the high incidence of bad debts. The construction industry has not fared any better as not a few of them have closed shop due to unpaid debts by both government and private patrons. Various chambers of commerce, trade associations including the Manufacturers Association of Nigeria (MAN) and NACCIMA confirm that their members are burdened with crippling bad debt profiles resulting from poor management and unsecured credit granted to their customers. With the deregulation of the down stream sector of the oil and gas industry, it becomes imperative for credit facilities to be granted to operators in order to ensure that the lifting and marketing of products continues unhindered. Key players in the downstream sector like NNPC, Mobil, OANDO, Texaco, ConOil and AP to mention a few, operate large credit control departments saddled with the responsibility of managing credit extended to their customers.
The banking industry is still grappling with the incidence of bad debts which has led many of them into various stages of distress. Yet, for the banks to survive in the new banking regime in Nigeria they must extend credit to their teeming and deserving customers otherwise, the entire economy will grind to a halt.
The government has promoted various credit delivery programmes and institutions. The performance of these programmes has been analyzed variously and researchers have come to a conclusion that most of them were colossal failures due largely to unavailability of skilled credit managers. Institutions like NIDB, NBCI, NACB, FEAP, Peoples Bank, etc. had since been merged or outrightly discontinued due to their poor performance arising from ineptitude, lack of credit management know-how and corruption on the part of the managers.
For credit management to be effective in Nigeria there must be specialist institution providing specialized learning in the field of credit with responsibility to provide quality personnel of credit management. For this vocational institution to be effective and impact positively on the nation's credit market, it should receive cheering accreditation of the nation's relevant education authorities.
Furthermore, the introduction and management of credit card business as means of effective payment for goods and services purchased as well as extension of business to business credit lines and post-paid services to individuals require an array of professional credit managers in addition to other infrastructural requirement and technology.
It is imperative to state that an efficient, effective and disciplined credit management and its importance cannot be overemphasised as it is not possible to achieve a robust economy without a well equipped credit market. Credit remains an indispensable lubricant and a tool of convenience for the solid economic progress of a country. But its uncontrolled use brings untold problems for an economy. Once again, it is therefore a necessary evil.
Creating an enabling and supportive environment to train and produce skilled and frenzied credit professionals is the responsibility of government and credit market stakeholders. With the payment of Nigeria's external debt by the Federal Government, the nation must move quickly to give backing to genuine efforts aimed at making Nigeria a member of economically civilised nation. This is why the Postgraduate School of Credit And Financial Management (PSCFM) is proving its commitment to implementing the highest standards of credit management academics with professional rigour in Nigeria. The role of PSCFM is therefore germane at this stage of our country's credit market economic development.
This is in addition to fostering ethical conduct among its graduates and award higher professional and post academic diploma certificates based on those standards. The developed economies have long discovered the need to harness its potentials in the area of credit management and Nigeria should not be left out. The effort of the Postgraduate School of Credit and Financial Management should therefore be commended, supported and recognised for its singular effort in championing the provision of internationally competitive credit management education in Nigeria.
In pursuing this lofty national agenda, the London Postgraduate Credit Management College, UK, which has global recognition for providing comprehensive range of specialist qualifications in credit management has granted affiliation to the Postgraduate School of Credit & Financial Management (PSCFM) for the combined running of professional skills development programmes in credit management for Nigerian economy.
The programmes are designed for people who are already working in credit management or intend to pursue a successful career in credit management, or within the credit and financial services industries. Although most participants may have previous experience in the field of credit and credit management, substantial formal prior training or experience in credit management is not required, bearing in mind that there are also those who are interested in diversifying or changing their present career to credit management.
The programme provides advanced study in credit management. The modules include research material undertaken by the PSCFM and LPCMC. The course is designed to help participants to acquire comprehensive conceptual and technical appreciation of up to date developments in the theory and practice of various departments of modern credit management.
The overall aim of the programme is to allow practising credit managers and their new recruits obtain specialist qualification in credit management through formal specialist learning methodology. The LPCMC and PSCFM programmes in credit management are vocational, practical and highly relevant while maintaining standards of academic rigor and scholarship. Besides providing a thorough training in the principles and practice of modern credit management, the programme aims to develop quantitative, analytical, problem-solving and sound decision-making skills in credit management.
In addition, the Postgraduate School of Credit and Financial Management are accredited by the Institute of Credit Administration (ICA) which is Nigeria's only national body for the regulation and standardisation of credit management. The institute's professional examination syllabus is incorporated in the PSCFM's which made PSCFM a tutorial and examination centre for the ICA. Upon successful completion of their programme, PSCFM's students who are by extension LPCMC students gain "associate" membership grade of the Institute of Credit Administration and are entitled to use designatory letter "AICA" after their names.
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