Opinion – By Abdul Lauya
The Federal Government’s move to embed credit scores into the National Identification Number (NIN) system marks a bold and controversial shift in Nigeria’s financial governance strategy. Under the proposed legislation, Nigerians who default on loans could face a host of penalties, from denial of international passport renewals to limited access to housing, and potentially, the suspension of driver’s licenses.
At the centre of this plan is CREDICORP, Nigeria’s Credit Corps, established to build a unified credit-scoring framework across financial and non-financial sectors. By integrating credit data directly into the NIN, a biometric-based national ID already tied to SIM cards, bank accounts, and voter identity, the government aims to compel financial discipline through systemic pressure.
A Carrot or a Stick?
The promise is straightforward: broaden access to credit by reducing lender risk, lower interest rates, and empower citizens with a financial footprint. But the punitive dimension, especially the threat of blocking passports or possibly driver’s licenses, raises ethical and legal questions. Does a state have the right to restrict a citizen’s mobility over private debt? Can financial behaviour justly determine access to public rights?
While the logic of enforcement has merit in a country plagued by a growing credit culture with limited repayment discipline, critics argue that such a top-heavy approach threatens to criminalize poverty. Unlike tax defaults or criminal offenses, loan defaults often arise from economic hardship, poor financial literacy, or predatory lending. Penalizing citizens with travel or licensing restrictions could amount to punishing the poor for being poor.
Lessons from Around the World
A comparative look at global practices offers both inspiration and caution.The United States operates one of the world’s most mature credit systems, but defaults do not impact a citizen’s passport, driver’s license, or access to housing, unless court judgments are involved. Credit scores are used extensively by landlords and employers (where legally allowed), but mobility rights remain intact.
India uses the Aadhaar system (similar to NIN), but it does not link credit behavior directly to ID functions. India’s credit system (via CIBIL and others) is regulated independently, and while creditworthiness can affect access to loans or housing, it does not restrict civil liberties.
Perhaps, the most cautionary parallel lies with China’s Social Credit System, which uses a broad data set, including financial behavior to assess “trustworthiness.” Travel bans, job restrictions, and even public shaming are deployed. While Nigeria’s plan stops short of this dystopia, the trajectory warrants vigilance.
Kenya and South Africa deploy centralized credit bureaus, and South Africa’s National Credit Regulator maintains strict compliance rules, but again, loan default does not deny access to passports or IDs.
Nigeria’s Choice: Empowerment or Control?
If Nigeria must take lessons, it should lean toward empowering citizens rather than policing them. Improving credit access requires building trust between lenders, borrowers, and the state. Financial education, borrower protections, and a transparent credit-dispute mechanism should accompany this reform. Moreover, a phased implementation, with clear opt-out provisions and judicial oversight, could help avoid the perils of overreach.
Yes, financial responsibility must be encouraged. But it must not come at the cost of civil liberties or deepen the exclusion of the already vulnerable. The state’s role should be that of a facilitator, not a jailer.
Final Thought
Reform is needed, no doubt. But in its zeal to digitize and discipline, Nigeria must not cross the line from innovation into authoritarianism. A credit score should be a measure of trust, not a tool of punishment.
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