Ferratum Group has announced the launch of a microloan scheme in partnership with payment processor Interswitch. Intwerswitch will be partnering with 5 banks in the country, and three credit providers including Ferratum to provide microloans between N1000 to N10,000 to Interswitch customers. Interswitch CEO, Mitchell Elegbe, had in a tweetchat with Nairametrics held in August revealed that the company was working on a microlending product.
Why the deal is a major one
The partnership will enhance access to finance for a large proportion of Nigeria’s population who work in the informal sector. Nigerian banks prefer to lend to blue chip companies as they have an established record and are less likely to default. If the partnership is successful, Interswitch could decide to replicate it in other countries it operates in. The partnership with Interswitch also marks Ferratum’s expansion into Africa.
Ferratum Group, founded in 2005 is an international provider of consumer and small business loans, distributed and managed by mobile devices. The company started operations in Helsinki, Finland but has since expanded to 25 other countries. Ferratum has more than 1.7 million active and former customers who have been granted one or more loans in the past (as at June 30, 2017). Ferratum Group is listed on the Frankfurt Stock Exchange
Interswitch, founded in Lagos 2002 is an Africa-focused integrated digital payments and commerce company that facilitates the electronic circulation of money as well as the exchange of value between individuals and organisations on a timely and consistent basis. Interswitch has since expanded operations to Ghana, Uganda and Kenya.