Credit Management professionals across industries in the economy have been called upon to strictly observe ethics, transparency, and duty of care in their handling of customer credit appraisal process.
Nigeria’s statutory body for the control, supervision, and regulation of the credit management profession, the National Institute of Credit Administration, gave this advice.
Speaking with our correspondent in Lagos, the Registrar/Chief Executive Officer, NICA, Prof. Chris Onalo, said these attributes are necessary for a sound credit system.
Onalo said, “When we talk about being ethical, transparent and carrying out duty of care to make sure that credit appraisal process are transparent, we are looking to keep credit professionals on their toes by being very professional, ethical, and transparent.
“This is against the backdrop of credit possibly going bad as a result of unethical conducts, some of which may not be economically motivated, but could be factors that can be prevented.
“When a credit professional is appraising a customer for either credit line, credit review, or credit limit upgrade, the customer must be thoroughly assessed based on the knowledge of the customer and the industry that the credit professional has had.”
According to the professor, credit assessment, appraisal or evaluation must put into consideration the business growth, or business downtown experience that the credit professional may have observed with the customer over time.
This is important so that what the credit professional sees at the end of the day, or at any time, is how the credit customers’ business can continuously be positioned and repositioned for growth, expansion and sustainable contribution to the economy.
If a credit professional fails to commit to the ethical and transparent credit appraisal process, he said, chances are that the credit transaction in question may go bad, and such a credit professional might be in dilemma of turning that account around, which means bad debt would occur. This means that the end testifies to the beginning.
NICA is holding credit professionals to that commitment. To this end, when credit appraisal is being carried out, appropriate credit and business information must be gathered to build mitigation bridges against defaults, he said.
To enable credit managers and their teams do their job of appraising, controlling, managing, monitoring and recovering, it is important to state that the organizations and individuals who uses credit to expand, grow, sustain or start up a business, or buy on credit today and pay tomorrow, must endavour to live up to their obligations. They should not abuse credit, and they should not see credit as a means to defraud the economy.
In credit management, Onalo noted, the bigger the information you got on the credit customer, the more likelihood you have on the success of that account, except other things happen which are beyond the control of both the credit customer, the credit provider organization, or the credit professional.
Speaking on more qualities of credit professionals, the professor of credit management said, they must be well grounded in the art and science of credit administration/management, and must also be a member of relevant, credible professional body such as the National Institute of Credit Administration (NICA).
“He or she must ensure regular participation in capacity development, by constantly attending training and retraining programmes relating to credit management,” Onalo said.
