THE Central Bank of Nigeria (CBN) said yesterday that in the first quarter of 2009, the private sector credit registry would get their operational licenses.

According to the apex bank, if Nigeria must achieve its set target of becoming one of the top 20 by 2020, credit bureau must be given its proper place in the economy.

Speaking yesterday in Abuja at the Credit awareness seminar by Credit Awareness Nigeria yesterday, CBN Deputy Governor, Tunde Lemo, said, "Given the plan of the present administration to transform the economy to be one of the 20 largest global economies in 2020 under the 7-point agenda, credit is certainly a potent instrument to fulfill that dream".

The Deputy Governor who noted that against the backdrop that Nigeria runs a cash economy which has its pitfalls and drawbacks, stressed that it will be very difficult for Nigeria to build a first class financial system that would meet the 21st century challenges, adding that for this, a credit based economy must be developed.

Lemo, who attributed lack of public awareness of the relevance and operational modalities of credit bureau for its unsuccessful operations and implementation in the country, said to build the awareness, the CBN after the successful completion of the reform in the banking sector, set the motion for significant increase in credit delivery in Nigeria, adding, "the existing 24 deposit money banks credit growth in the first 10 months of 2008 exceeded N2 trillion more than the Federal Government's capital budget".

The CBN Boss who lamented the sliding oil prices that might reduce the spending aspect of the government, said, "With the oil price shock, it is unlikely that government spending will be sufficient to power the economy to the desired level without credit support".

In his remarks, the Country Director, World Bank, Onno Ruhl who noted that credit for growth in Nigeria must come from commercial banks as they dominate the financial sector of the economy, said the World Bank in its support for MSME project through the setting up of new Micro finance institutions has committed $7.25 million in six grants, adding that micro-finance has a potential to eradicate poverty.

According to him, for Nigeria to be among the top 20 economies of the world by 2020, it must strengthen its domestic financial markets, provide enabling environment and infrastructure as well as enhance integration with external financial markets, build international financial centre and develop financial sector.

"By 2020, the Nigerian credit to GDP will be among the top three of emerging markets including access to credit for the productive SME sub sectors and 70% of the Nigerian population. A well functioning financial sector can contribute significantly to growth and poverty reduction. Access to finance remains severely limited in Africa and more African firms find limited access to and high costs of finance as a key constraint than firms in rest of the world.

"Private sector credit at 14% of GDP is very low compared to 21% in other low income countries in the rest of the world. African banks invest more in government debt and liquid assets and less in credit to the private sector and African loans are expensive, interest rate spreads average 85 in Africa compared to 4.8% in the rest of the world", he said.