This is looking at the simple issue of – are you trustworthy, can you be relied upon, do you have a record of being faithful. As Lenders we may not be able to determine this by mere looking at you neither by your sharp crisp suits nor by your dirty jeans and tee shirt. Whether you are a business or an individual (young or old) the issues highlighted below applies to everyone.
So firstly lenders look at what is called your credit history to determine whether you have borrowed in the past and whether it was repaid on time. This is done by carrying out a credit check on you to see if you have borrowed money in the past and paid back as and as at when due. This is done through the various credit bureau Companies licensed by the Central Bank of Nigeria (CBN). In this era of BVN there really is little space to hide. So whether you borrow from the Banks, or the different financial institutions springing up everywhere or even the loan sharks, the credit bureaus will have access to the records. Character deals with trustworthiness and reliability over time.so in looking at your credit history we also look at your Bank statements, your credit reports; all these tell the lender your story.
Let me address young people just starting out either in a white collar job or in business. It troubles me especially these days when i see young people who go for these “sharp sharp” online loans, I won’t mention names here and they keep missing their repayments – what I call gaming the system and they believe they are being smart or that it does not matter. The truth is that what you will be tomorrow, the access you will have, what will make you or mar you is determined by what you do today. I give an example – a lot of our politicians, technocrats and even Judicial officers are in various courts scattered all over the country and many have ended up losing the seats they fought hard for things they did decades ago, but because they were not looking at the future they did not pay attention to the fact that those things may haunt them in the future. Some for doctoring of NYSC certificates, doctoring of age, forged academic results etc. the list goes on. What they did then without considering the consequences have caught up with them. So it is with character. This cannot be overemphasized. The culture of honesty, integrity is fast fading from our society, but it has no substitute. So, one must ensure that building your character is very key for your financial security and I dare so every other sphere of life. You have to constantly and consciously build your character profile financially in order to arrive at your preferred destination in the future and this starts now.
Furthermore we do some background checks on you to check for your positive rating in your neighborhood, we are asking your friends, colleagues, union/cooperative leaders, supplier, buyers, etc. We are putting all these things together to determine your character.
Now the more trustworthy you are the more likely the lender will deal with you. I dare say that if you get character right, you have created a solid foundation before your prospective lender. I will say of all the 5 C’s we will be looking at that character is the foundation. Whatever you do today goes a long way to determine whether a lender will deal with you and what conditions they will attach to your proposal if they must deal with you.
Finally the lender may also be looking at your track record and experience in your business and industry
I will like to end this write up this way, a lender will deal with you depending on the degree of your character. This will determine the risk profile they will attach on your proposal. If you are seen as a person of high character, the conditions may be more favourable, however if your character is seen not up to par, then the lender will tie you hand and legs with conditions that will bind you if they decide to deal with you at all.
I ask you today, before you come up with that proposal, ask yourself am I reliable, can I be trusted? You have a choice to make and can start today to make the right choices that can prepare you to take your life and business to the next level. In the words of Jim Rohn “Character is the result of hundreds and hundreds of choices you make that gradually turn who you are, at any given moment, into who you want to be”
See you next week where we will discuss the 2nd C that Lenders look out for.
By: Amarachukwu Ike (Amara is a Business Manager in a Nigerian Bank)