Strong judiciary needed to help creditors recover debt, says firm

Abimbola Pinheiro, the chief executive officer (CEO) of O3 Capital Nigeria Limited, has called on the federal government to improve the judicial system to aid debt recovery.

Pinheiro said creditors would not have a problem recovering debt from debtors if there was a strong judiciary.

He spoke at the launch of four American Express credit cards for small and medium-sized enterprises (SMEs) by O3 Capital Nigeria on May 9.

“They need to improve the judiciary so that you can enforce compliance. Part of our issue is that some people do things and think there’s no consequence because there’s no redress in court,” Pinheiro said.

“Also, government needs to enforce identification in terms of location. Because in Nigeria now, I could do my BVN and I’m leaving here, but next week I move to (another) place.”

He said Nigeria needs to integrate all the silos of data and have a social security number which will make it difficult for debtors to hide from creditors.

Pinheiro also canvassed for collaboration between financial technology (fintech) companies and banks to leverage each other’s strengths and improve the adoption of credits.

“That integration between fintech and bank needs to be encouraged,” he said.

“I believe fintechs are not as liquid as banks. They raise money, yes, but they still don’t have the liquidity of banks, and banks don’t have the growth and reach of fintechs – so it’s a win-win.

“So you use the banks’ funds to reach out to these people. So the banks make their money and you make your money. The first real partnership between a bank and a fintech is going to blow everyone out of the water.

“We have 200 million people, you can’t bank everybody.”

On the business environment in Nigeria and how policy uncertainty affects investors, Pinheiro said uncertainty makes people uncomfortable.

He said policy uncertainty makes it difficult for investors to plan because things can change anytime.

However, Pinheiro said companies need to know how to adapt to a business environment that is not stable and learn how to be profitable in the space because nothing is stable anywhere in the world.

“At the end of the day, when everything gets stable, it’s the company that is still a going concern that will reap the reward of that stability,” Pinheiro said.

“You can’t shut down your business and say until it’s stable before I start.”

He said policy uncertainty is not an excuse, because “look at companies like Facebook and Microsoft, the internet and tech world was not like this when they started, but they started”.

“As it got better, their offerings too got better,” Pinheiro said.

According to the CEO, there is never a perfect time in business.

He said when banks and telecommunications companies start shutting down, that is a signal that the business environment is problematic.

Pinheiro said there are still opportunities amid the uncertainty as long as these businesses remain operational.