GOOD CREDIT MANAGEMENT CAN MEAN THE DIFFERENCE BETWEEN A BUSINESS SURVIVING, THRIVING OR GOING BANKRUPT

Wednesday, 24th April 2024.

CreditEconomy News Interview

blackstone

Dr. Elizabeth Kings-Wali

Chief Executive Officer (CEO) of BlackStone Capital Limited

GOOD CREDIT MANAGEMENT CAN MEAN THE DIFFERENCE BETWEEN A BUSINESS SURVIVING, THRIVING OR GOING BANKRUPT

Dr. Elizabeth Kings-Wali, the Chief Executive Officer (CEO) of BlackStone Capital Limited, speaks on the gains of transiting from cash-based economy to credit system in the National Institute of Credit Administration’s Credit Economy News.

 

What is your assessment of credit business in Nigeria?

“Credit management is the process of evaluating, managing the creditworthiness of potential borrowers, and, monitoring and collecting payments from borrowers. This process is crucial for financial institutions, businesses, and individuals who offers credit to manage their risks, ensuring that they are paid back in a timely, and efficient manner”.

However, I will say credit business has experienced a significant improvement and the impact is felt in the development and financing of small and medium micro economic activities.

 

What is your take on the ongoing economic reforms in Nigeria?

Although, there have been notable achievements under the programme, significant challenges exist, particularly in the area of translating the benefits of reforms into welfare improvements for citizens, improving the domestic business environment, and extending reform policies to states and local governments.

“Consequently, we argue that the recent reform programme should be viewed as the initial steps of a much longer journey of economic recovery and sustainable growth”.

Generally, the gain from all index of policies around (FX, fiscal and monetary policy, fuel subsidy, electricity) will begin to take shape from the third quarter of 2024.

 

What would you say should be the Nigerian type of consumer credit?

Secured loans are backed by collateral, which enable lenders take over ownership once there is default in the loan repayment. Examples of secured loans includes: mortgages (secured by your house) and the auto loans (secured by your car title). Some banks, and credit unions let borrowers secure a personal loan with their savings accounts or other assets as the case may be. Online lenders that offers secured personal loans usually let you borrow with your car as collateral. Secured loan rates are typically lower than unsecured loan rates because they are considered less risky for lenders.

 

Professionally speaking, what is your advice to the government to transit the economy from cash based to credit system?

“Credit system refers to everything directly related to approving, monitoring and recovering customers’ payments. This includes onboarding, setting payment terms and policy, issuing trade credit or other business financing, and collections”.

It is a core task for banks and businesses across all industries and markets. Best practices, levels of risk and days sales outstanding (DSO) (a measure for determining the health of businesses’ collection processes) vary in each of these.

“At its core, effective credit management is the caretaking of a company’s financial health. Good credit management can mean the difference between a business surviving, thriving or going bankrupt”.

Government transiting from cash base to credit system will help the Nigerian economy translate and increase the availability of credit liquidity, increasing available business liquidity, executing faster and more complete debt recovery, improving your company’s Days Sales Outstanding (DSO), Identifying opportunities and freeing up your company’s working capital for critical business investments that can support strategic growth, helping you plan and analyze performance, which enables you to prepare financial budgets for the years to come.

 

What should be done to make Nigeria’s Micro, Small and Medium Enterprises (MSMES) more supportive of the economy?

“MSMEs are the bedrock of industrialization and inclusive of economic development; and the most important component of industrialization as set out in the Economic Recovery and Growth Plan” – H.E. Prof. Yemi Osinbajo.

“We need to target policies by business type and ensure that there is improvement in the challenges faced by the sector. Micro businesses face challenges related to the day-to-day running costs – fuel, electricity, working capital. SMEs face a more complex set of challenges related to access to capital and industrial utilities, policies aimed at both business types should not be generic or lumped together”.

As a statutory professional body for the control, supervision, and regulation of credit management profession in Nigeria, what support would you suggest National Institute of Credit Administration (NICA) should provide to help achieve a strong credit economy?

NICA should ensure policies that strengthen credit management and promote sustainability of the credit system to achieve short, medium, and long-term economy objectives.

 

What is your advice to Nigerian businesses in relation to Integrity and Honesty in Business?

Honesty and integrity encourages team members to build strong relationships with each other and with clients and customers. These qualities help to improve the overall productivity and achieve more success as a team. By understanding how to integrate these qualities into your business, you become a more reliable and accountable company.

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