Unified Identity Data will Eliminate Predatory Loan Sharks – eTranzact CEO
eTranzact Plc has called for the adoption of a unified and tokenised national identity system to expand access to affordable credit and curb the exploitation of Nigerians by loan sharks.
The Chief Executive Officer of eTranzact Plc, Mr Niyi Toluwalope, made the call at a stakeholders’ engagement themed “Shaping the Future of Payments: Balancing Regulation and Innovation.”
This was disclosed in a statement issued on Saturday in Lagos by the company’s media unit. Toluwalope identified gaps in the nation’s credit and identity ecosystem as a major driver of the predatory activities of loan sharks.
He noted that predatory lending thrived because many Nigerians were faced with urgent financial needs and were compelled to accept loans with exorbitant and unsustainable interest rates.
“The people making money are lending to those who desperately need funds immediately. “They take loans at impossible rates because they are desperate and then they can’t meet up,” he said.
Toluwalope said there was a need to deliberately build a system that would enable individuals with regular and identifiable incomes, such as security guards, drivers and other salary earners, to access legitimate credit.
“Let’s create a system where anybody with regular identifiable income can access credit so that the emergency loan shark model naturally disintegrates,” he said.
He described the Bank Verification Number (BVN) as Nigeria’s most reliable financial database, noting that it had matured over time and remained secure because it is closely tied to financial transactions.
“The BVN is a fantastic database. It’s matured it’s secured and because it’s tied to money people pay attention to it,” he said.
He, however, said Nigeria must go beyond the BVN by strengthening and expanding the National Identification Number framework to create a unified national identity system that links individuals to income and location.
Drawing comparisons with developed economies such as the United States, he explained that, credit systems function effectively where financial footprints are fully traceable.
“In the US your social security number, credit score title and everything you do are tracked across the 50 states. You can’t run anywhere it will come up,” he said.
The eTranzact boss also advocated the tokenisation of identity to eliminate repetitive Know Your Customer (KYC) requirements across banks and financial institutions.
“Why do I have to submit the same KYC every time I open an account? Let’s tokenise identity and secure it with one time password,” he said.
According to him, a system where identity data is automatically updated whenever changes occur would support credit cards utilities and other financial services while strengthening trust accountability and financial inclusion in Nigeria. #Unified Identity Data will Eliminate Predatory Loan Sharks – eTranzact CEO#
