How technology can improve financial credibility

By Lucas Ajanaku

The use of an application programming interface (API) service is a tool to validate the financial credibility of cheque issuers to improve confidence in lending, CreditRegistry has said.

The firm said it has therefore unveiled an API in line with the Central Bank of Nigeria (CBN’s) directive that all financial institutions perform a status check on potential customers to ensure they are not serial dud cheque issuers before opening an account, approving them as guarantors to credit facilities or granting of credit to them.

The Dud Cheque API service protects lenders, small, medium enterprises (SMEs), retailers and other organisations from accepting cheques from serial dishonoured  cheque issuers especially as the economic challenges occasioned by the COVID-19 pandemic becomes more pervasive. Accepting cheques as a means of payment increases sales and improves the cash flow for businesses by assuring timely collection of all credit granted on post-dated cheques.

Its Chief Executive Officer, Mrs Jameelah Sharrieff-Ayedun said: “Everyone needs credit at some time. This service simply helps to improve transparency to reduce the barrier so more people can access credit using post-dated cheques as a means for payment. This service not only offers comfort to economic agents advancing credit but also lubricates the economy by ensuring that accountable individuals and businesses who need credit get it in a fast, easy and inexpensive way; ultimately, the overall economy benefits.”

The API is a self-service solution that enables duly enrolled agents carry out necessary dud cheque verifications conveniently and in an automated fashion. Dud Cheque enquires are performed in real-time through the API in addition to the existing web application that has been available since 2016.

Speaking on the importance of the service, Dr. Andrew Nevin, Chief Economist, PwC said: “We need to commend CreditRegistry with this important step, showing how fintech at its best will improve the financial system. This is simple but solves a major problem – verifying the accountability of cheque issuers. In 2009, PwC recommended the need for robust credit registries in the financial ecosystem in Nigeria; of course, CreditRegistry was already the pioneer, having been established in 2003, so it is no surprise to see CreditRegistry on the cutting edge of technology.”

Banks and other institutions that intend to verify the dud cheque risk of their customers in real-time can program to directly integrate their bank account opening and/or loan origination systems with the new Dud Cheque API service to improve turn-around-time and perform batch services.

Each institution can integrate the API to return a file which will specify the number of dud cheques written by any offender. Ultimately, when a search is carried out, the API returns the information generated to the agent to enable instant and efficient decision making.

Customers who are accountable and have no dud cheque issues can be given access to services or products when they present post-dated cheques as a means of future payment.

Subscribers of CreditRegistry can access her Dud Cheque API Service now through their authorized credentials registered on the bureau.