Get a bank loan in 24hrs, no collateral, no plenty questions

The emergence of financial technology firms (Fintechs) has really intensified competition in the financial services industry, thereby putting commercial banks and microfinance banks (MFBs) on their toes.

The situation is good for the customers because right now, they can easily get a bank loan faster than they get a visa. Frankly speaking, within twenty-four hours or even less, you can now get a loan from a Nigerian microfinance bank without even visiting their branch.

This is a shocking (but pleasant reality) that was recently discovered by Nairametrics’Founder and Publisher, Ugo Obi-Chukwu.

Taking to Twitter, yesterday, the main man shared how he was pleasantly surprised to discover that someone could now borrow money from a Nigerian MFB without the stress hitherto associated with such a move.

So, I decided to test applying for a loan with a microfinance bank and I got it in 24 hours.

No application letter, no collateral, no plenty questions, no stories.

Just BVN, ID and Bank statement.

😳
😳
😳

I weak 

— Ugo Obi-Chukwu (@ugodre) February 28, 2019

So what changed?

Well, as earlier mentioned, Fintechs came to the market. With the help of innovative technologies and the determination to change the banking paradigm in one of Africa’s biggest economies, financial technology firms opened shops and won over millions of customers.

The likes of Fint.Ng, Branch International, Paylater, and Piggybank, Renmoney, etc, began offering more accessible loan services to Nigerians. This is something that traditional banks (and even some microfinance banks) were reluctant to do prior to this time.

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If you think of it in the context of PayLater (1m users in 18 months vs GTB with 10-12m customers in 15+ years), banks should be very scared

— Neo (@SuperSentient_) February 28, 2019

The entrance of fintechs, therefore, created the much-needed competition in the industry, just as traditional banks were prompted to take action in order not to lose their customers. It now seems like that is working.

Now, back to Mr Obi-Chukwu’s experience; how did he borrow the money? 

According to his tweet, he was neither required to write an application letter or present any collateral. All that was required of him was his Bank Verification Number (BVN), which the bank would have used to verify his credit score and qualification.

Your bank statement reveals income pattern & swing, bvn & Id to check credit bureau records, all positives means ok, loan less than 12 months, risk premium priced. Thanks

— tope adewuya (@atopeaceland) February 28, 2019

Note that this is the same strategy that is being used by some of the emerging lending (fintech) platforms. And it has been working just fine.

As expected, Nigerians reacted 

Some of the people that commented on the post were equally surprised that this kind of thing is now possible in the Nigerian banking space. In other words, they probably did not know until now that it has become easier to borrow money in the country. Little wonder most of them kept asking for the bank’s name. But nobody is here to give anybody free advertisement.

🙄

I cannot come and be advertising for them oh! 

— Ugo Obi-Chukwu (@ugodre) February 28, 2019

Please how’s the interest rate??

— DANIEL WHYTE (@danielwhyte2) February 28, 2019

Fair enough. Name of bank please let me see if they have a branch here. You can send a DM. Thank You.

— DANIEL WHYTE (@danielwhyte2) February 28, 2019

Meanwhile, others were more interested in knowing how much was borrowed, and how much is is Mr Obi-Chukwu’s account. Again, he refused to say a word. Sealed lips.

🤐
🤐

— Ugo Obi-Chukwu (@ugodre) March 1, 2019

🙄
🙄
🤐
🤐

— Ugo Obi-Chukwu (@ugodre) February 28, 2019

But some others were of the opinion that the development is so good to be true. There must be some hidden agenda, they said.

Banks are so good in luring you into their plan. But once the interest start biting; it becomes much more difficult to voice out!

— Emmanuel SUNDAY (@SundayE48824781) March 1, 2019

They will go viral to all your contacts and tell them you are owing them and can’t pay, they they should pls get in touch with you.

🇳🇬

— Immanuel Nwankwo (@ImmanuelNwankwo) March 1, 2019

Personally, I think this may be the next time bomb that’ll hit the economy in a few years. Its ok when a few people default but when it’s in droves? Lets see how our ‘broke’ country handles it..

— #Fiye’s Dad (@soulbruva) March 1, 2019

In conclusion, Nigeria is gradually moving into a lending economy just as the financial services space becomes more competitive. However, customers should thread carefully because as the saying goes, all that glitters is not gold.

🙄
🏃‍♂️
💨
💨

We have moved to a lending economy. I get 10 to 15 messages from Salespeople on @LinkedInevery week stating I should get a loan:
Page MFB
RenMoney
Credit Direct et al
When you tell then you have a running loan, they offer to buy off the loan 
When I see loan offers, I 

— Oluwadamilola Ayinde (@Oluwaday) March 1, 2019

Waow! That means they can compete with lending fintech startups in the area of ease of application/request

— Oladeji Thompson (@dejithompson) March 1, 2019



Source: Nairametrics

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