Our 4-Year Debtors Are In The Banking Hall Again By Mashood Bolajoko Maryam

Boason Omofaye , a business journalist asked a question a few days ago. He asked, “What do politicians
and delinquent borrowers have in common?” At first this seemed like a mirage but I was quick to recall
Asset Management Corporation of Nigeria (AMCON) had released a list of 105 names that it claimed to
have negotiated successfully with the corporation. Topping this list were current and past public officers
in the country, from ex-ministers to ex-governors, members of national assembly and traditional rulers
were not exempted. The answer to Boason question then was clear.

Giving out a loan to a friend, or financial institutions giving out credit to individual or corporate clients
requires performing credit analysis. Loan like votes is a borrowed item that is given in advance with a
promise to pay back in the future, what distinguishes the latter from the former is that the return of votes are not in the actual term that was borrowed, rather in terms of improved terms of the
constituency that cast their votes.

Over time, when debtors default, it becomes a question of; was it the
creditor(he who gives the loan)that gave a loan to an irresponsible debtor or the creditor gave out the
loan on a basis that compromises the ability for it to be repaid?  Like Votes, when our politicians default,
we ask ourselves “why do we deserve these leaders?”.  At times, this is not a question we should ask, but we should rather ask “why did we elect these leaders?”. A question that may be exchanged with something like “why did we give loan to this person when we should not have done so? I am sure you are getting the answers to Boason’s question now.

I will briefly run to the basis of credit analysis that is widely analysed before giving out a loan and correlate it with what we should do before casting our votes for someone to serve us in a public office.

First is capacity; the lender must be sure that the borrower has the capacity to pay back the loan. If a friend asks for a loan,  the first thing that comes to your mind is can he repay back the amount? Capacity
can be measured in terms of past information and prospects of future income. This should also be
reciprocated when we decide to elect someone into office, what are his past records whether in public
or private service?

What are we expecting of him in the future?  Can he deliver it? The answers to these questions would be giving us the flags that may occur when it is time for repayment.

Lenders also analyse the amount the borrower would bring in, i.e. the capital level.  As a lender you
would feel safe if your prospective borrower needs a million naira and he just needs you to give him 40% than asking you to contribute all. The percentage may differ with situations.

Although this may be difficult to measure in quantitative terms for politicians,  especially the first timers, but some yard stick can be used such as; what has this person done to solve a communal issue that would not require the
interference of government? What is he putting at stake? I would trust one who shares my disappointment about depilated basic facilities rather than one who believes they are the best we can
get.

Finally and most importantly is the character of the borrower, I have been in a situation where someone had the capacity to repay my debt, but held on to it because he was not just ready to repay me. YES, he had the capacity to pay but character was lacking. Character is the most important attribute to look out for
in a debtor. Character is the reputation of the borrower. Like an adage says, “the past behavior is the best predictor of the future behavior.” The character of who we vote into public office is one that should not be compromised for anything.

Capacity to repay their promises may go in an unfavorable way than we expected but what was the outcome of their character? If a debtor had difficulties in repaying the loan at the scheduled period, one would prefer the debtor that informs you of this ahead and ask for a new repayment schedule than one who stops responding to your calls and cut all means of communication.

A public officer or holder who is cautious of his/her reputation would strive by all means to see that all promises made are delivered at the appropriate time. Even when unforeseen conditions come up, he would ask for ways to repay at a later date, not ask you for another loan(term in office).

Mashood Maryam Bolajoko

You might be wondering if these analyses are done, then why do we still have non-performing loans or
defaulting debtors, it is because either the creditor decides to be negligent in the due cause of these analyses or see the red flags and still go ahead to give out the loan to a debtor who has low credit rating for short term benefits.

The borrower may provide to the creditor especially when the creditor who shares the least burden is in a default. Electoral processes are not different, we have non performing leaders because the electorates are not analyzing if the officers should be elected in the first place or reelect those who have failed because of short term benefits. All these may accrue to user-based sentiments rather than on performance.

Unfortunately unlike some corporate loans, there is No AMCON to help us negotiate to avoid a run of the economic system, we all bear the brunt of our bad decision to vote leaders we know don’t deserve to be in a public office.

Dear Nigerians, as we are heading to the polls to elect our leaders for the next 4 years, let us endeavour to do a credit analysis of the debtors as they queue at our banking halls again; our constituencies.

 

Mashood Maryam Bolajoko can be reached at Contact:mashoodbolajoko@gmail.com

 

Opinion contained in this article is strictly the writer’s and not Aledeh’s. 

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