Don't Miss


Home   >   Tech & Telecoms   >   Telecoms   >   Effective credit system critical for telecoms growth – Airtel CEO

Effective credit system critical for telecoms growth – Airtel CEO

By on October 8, 2013

The Chief Executive Officer (CEO) and Managing Director of Airtel Nigeria, Mr. Segun Ogunsanya has identified effective credit management system as a critical factor for the growth of stakeholders in the telecommunications industry.

The CEO/MD,  Segun Ogunsanya, who was also named the Credit Personality of the Year, 2013, by Institute of Credit Administration (ICA) in his a paper presented at the Mandatory Credit Management Specialist Conference of the Institute of Credit Administration of Nigeria (ICA) in Lagos at the weekend said organisations within the ICT sector must put in place efficient credit risk management systems in order to avoid collapsed or severe financial problems.

He added that poor credit management system could lead to reduced liquidity, increased costs of collections and credits, increased finance costs through extra borrowings and declined reputation of the company arising from failure to meet its obligations to its creditors, among other problems.

The Airtel boss also noted that effectively managing credit and extending same to customers operating in the Telecommunications industry can help attract many more customers inclusive of those who normally would not be able to afford the products.

According to him, “due to the competitive environment coupled with the growing demand for credit in the Nigerian market, creating credit lines for customers is necessary as only very few businesses can afford to operate without extending a form of credit to their customers”.

He also said that the “extension of credit to customers is a must do as it ensures that the organisation’s primary objective of maximizing shareholders value is achieved. Notwithstanding the advantages, credits must be carefully managed to ensure that the business does not suffer from unnecessary cash flow problems arising from these credit lines.”

He pointed out guidelines to follow before offering credit to customers, including checking the credit worthiness, setting criteria and credit limit, assessing financial status, tracking customer’s credit payments, and enforcing sanctions on late payments.

He further explained that the telecommunications industry is essentially a credit dependent industry due to its capital intensive nature and long gestation period, adding that players in this industry are usually beneficiaries and providers of credit.

Offering further advice to operators within the ICT value chain, Ogunsanya said before any credit is offered, proper evaluation of the customer must be carried out in order to determine if the funds would be collectable upon due date. He noted that this evaluation can be done by using the ‘5 Cs’ (Character, Capacity, Collateral, Conditions, and Capital) to appraise the customer.

The award conferred by the Institute of Credit Administration (ICA), on Ogunsanya is aimed at celebrating outstanding professionals within the Industry.

According to the award organizers, Ogunsanya was recognized for his role in improving the credit profession as well as strict adherence to the ethics of the credit management and its code of conduct.

A citation read in his honour said the prestigious award is designed to further motivate him to continue exhibiting excellent performance in general credit management, credit operational policies and procedures, as well as capacity building of credit work force in organization.

The Registrar and Chief Executive Officer, ICA, Dr. Chris Onalo and Former Executive Director/Chief Credit Risk Officer, Zenith Bank, Andy Ojei presented the award to Ogunsanya.

The event, which was held at the Protea Hotel, Ikoyi, Lagos, was attended by notable credit professionals including the Registrar/Chief Executive Officer, Institute of Credit Administration (ICA), Dr. Chris Onalo, Andy Ojei, Former Executive Director/Chief Credit Risk Officer, Zenith Bank, Adeniyi Akinlusi, MD/CEO Trustbond Mortgage Bank and Solanke Abimbola, Financial Controller, Airtel Nigeria,

 

 

 

[Vanguard]