In a recent report by the International Finance Corporation (IFC) and the Central Bank of Nigeria (CBN), less than a third of MSMEs have successfully obtained loans from financial institutions, and that is not for a lack of trying.
Nigeria currently has over 35 million MSMEs and if approximately only 10 million MSMEs have been able to get loans from financial institutions, hence, a credit gap of about 25 million in the country.
Fint, an online peer to peer lending platform intends to simplify access to credit for genuine borrowers while also providing returns to lenders.
Nairametrics was at FINT’s new office in Ikoyi during the week where we had a chat with the CEO, Mr. Chiwete John-Njokanma. Excerpt:
What exactly is FINT?
FINT is an online lending marketplace, basically we connect verifiable income borrowers looking for access to affordable credit with lenders who are looking to fund the loans for attractive returns. We have consumer loans i.e. loans between N60,000 and N2 million at rates as low as 8% for 3 – 12 months, with retail and institutional lenders (banks and asset managers).
For lenders, they can lend in the multiples of N20,000 grows at 26-39% for one-year loan tenures, for 6 months 15-22% for 3 months it is 8-14%.
What is the success story so far?
Our first story is the fact that we launch and became an acceptable product to the public (Lagos) and the most interesting thing is that there is a huge demand for this product for two reasons, one is because investors are looking for good returns for their money while borrowers are looking for ease and quick access to borrow money and that is the problem we are solving.
This offering has made our platform interesting. We currently have 26,000 customer base and average borrowings is like N333,000.
How do you get these lenders?
On the retail side, our strategy is the social media platforms, (twitter, facebook and Instagram) while on institution and HNIs they are mostly offline activities meeting clients and try to access their funds.
Does FINT have footprint outside Lagos?
Currently we are only in Lagos, however, we are pursuing a new licensee that will allow us to expand and move our operations to other states. But importantly, Lagos is a big market, with an estimated population of 22 million and about 60% of this population falls into our target market.
How can borrower access your platform?
So for a borrower simply sign on to our website www.fint.ng and risk assessed by our arithmetic algorithm if you pass the risk assessment test, you will get a score, that score is tied to a particular interest rate and you agree to borrow for certain period of time, risk and interest rate provided, upload proof of ID, statement of accounts at least 6 months.
Once this is done, your loan is made visible on the platform for lenders to invest. Lenders would have selected their risk criteria already, based on their risk appetite as little N20,000.
How do you handle loan defaulters knowing fully that some might want to run away after collecting the loan?
We have not experienced any default on our platform so everyone has paid back. We had people who have paid late, but they ended up paying back. The truth is that the average Nigerian is not trying to scam or cheat the system, that’s a view we hold in this business. Also, loans on FINT are insured against loss of work, permanent disability or death. So if you lend to someone who passes away, you don’t need to follow them to the great beyond to get your money back.
More importantly for us, is to create a system for genuine borrowers willing to pay back, hence, we partnered with the credit bureaus, we also carry out verification services through our third-party partners so that they can verify that if the residential address given is correct also the introduction of BVN into the system has enabled us to know our customers directly.
How secure is your platform?
Our platform is as secured as any mobile banking application and we have the necessary securities certifications and encryption system.
There has been an upsurge in the number of fintech startups in the country, what is the edge for your platform?
We presently don’t have any direct competition, however, there are a lot of strong startups out there. At FINT, our value proposition is the ability to merge value for both sides of the food chain.
A lot of lenders in the ecosystem presently lend to borrowers on their own balance sheet, hence they charge high-interest rate and get high returns but there is another side that is missing that is the investors, there are many people looking to earn income passively rather than take a second job to earn more money. Lenders willing to lend and earn strong returns.
How do you determine returns?
Our pricing model changes and is based on Monetary Policy Rate (MPR), inflation rate and based on how these two mechanism work we can work out beneficial returns for lenders.
Have you raised any funding?
Yes, we have locally from strong financial institutions.
Are you happy with the rate genuine borrowers get access to loans in Nigeria?
No, and it is unfortunate, in 2014 it was about 5%, in 2017 it dropped to 3%, it means only 3% of them have had access to credit facility from financial institutions. But why is this so? It is because the way the current system is set up will not encourage a retail investor to borrow.
What is your latest product on the market?
We have the employment model product where we allow companies to partner with us for staff loans while we directly deduct from their salary and give the loans at a lower rate
Thank you for time.
You are welcome
COVID-19: CACOVID spent N43.27 billion to support 3 key priorities – CBN
The Central Bank of Nigeria (CBN) has revealed that the Coalition Alliance Against COVID-19 (CACOVID) has so far incurred an expenditure of N43.27billion on the acquisition of, not only medical equipment and supplies but also food palliatives for vulnerable Nigerians.
The recent press release noted that the funds raised by CACOVID was used to support 3 key priorities – Medical facilities and equipment, food relief programs and communications plans.
The breakdown of the expenditure in the aforementioned areas are:
- Medical Facilities and equipment: In collaboration with other stakeholders, CACOVID developed 39 fully equipped isolation centers across the 36 States of the Country including the Federal Capital Territory (FCT). The sum of N4.19billion was spent in Building Isolation Centers. In addition, medical equipment such as PCR test kits for suspected cases of COVID-19 were procured along with other required medical items at a cost of N9.02billion.
- Food relief programs: As a way of cushioning the impact of the lockdown on vulnerable citizens, CACOVID provided palliatives in the form of essential food items to 1.7million households, which is equivalent to supporting 8 million Nigerians. A total of N28.76billion was spent procuring these food supplies.
- Communication plans: CACOVID also worked to improve awareness in rural communities on the COVID-19 virus, and the measures community health workers and other members of society should take when someone in the community is suspected of having symptoms similar to that of COVID-19. In lieu of this, expenses were incurred on Print, TV, radio, and social media as part of CACOVID communication plans.
Why this matters
The recent disclosure is in line with the principle of accountability and transparency, as the organization seeks to lay bare facts regarding expenditure incurred so far; thereby, nipping in the bud, suspicions and unfounded rumor.
What you should know
Due to the sudden global health challenge (COVID-19), which wreaked havoc on most economies of the world, coupled with declining oil prices and declined government revenue; the Bankers Committee, comprising the Central Bank of Nigeria and the Deposit Money Banks, as well as key stakeholders in the private sector came together to set up an alliance in March 2020, known as the Coalition Alliance Against COVID-19 (CACOVID).
The ultimate objective is working with the government to provide support in areas that would result in improved health and welfare for vulnerable Nigerians.
PZ Cusson announces retirement of Chairman, Kola Jamodu
PZ has announced the retirement Chief Kola Jamodu as Non-Executive Director and Chairman of the Board of the company.
The Board of Directors of PZ Cussons Nigeria Plc has announced the retirement of Chief Kola Jamodu as Non-Executive Director and Chairman of the Board of the company.
This disclosure was made in a notification signed by the Company’s Secretary, Jacqueline Ezeokwelume, and sent to the floor of the Nigerian Stock Exchange.
According to the notification issued by Mrs. Ezeokwelume, Chief Kola Jamodu will retire as a Non-Executive Director and Chairman of the Board effective 11 December 2020 to enable him to pursue other personal endeavours.
What you should know
Chief Jamodu joined PZ Cussons Group in 1974 and served in Executive positions for 24 years rising to the position of Chief Executive Officer of the Company, a position he held until he retired in 1999.
He thereafter continued as a Non-Executive Chairman of the Board until 2001 when he was appointed as the Honourable Minister of Industry of the Federal Republic of Nigeria, a position he held until 2003.
He was reappointed as the Chairman of the Board of PZ Cussons Nigeria Plc in November 2014.
Abbey Mortgage Bank announces appointment of 6 Directors
The Central Bank of Nigeria has approved the appointment of 6 Directors of Abbey Mortgage Bank.
Abbey Mortgage Bank has announced the appointment of 6 Directors, including Mr. Madu Hamman as the substantive Managing Director.
The disclosure is contained in a notification, signed by the Bank’s Secretary, Geoff Amaghereon Esq. and sent to the Nigerian Stock Exchange market today, as seen by Nairametrics.
What you should know
Five (5) other Directors were appointed by the CBN – 2 Executive and 3 Non-Executive Directors.
The names and portfolios of the Directors are; Mr. Mobolaji Adewumi – Executive Director; Mr. Oladipupo Ayodele Adeoye – Executive Director; Mr. Nonso Okpala – Non-Executive Director; Professor Marius N. Umego – Non-Executive Director; and Brigadier-General John Obasa (rtd) – Non-Executive Director.
The notice also mentioned that all appointments have been approved by the Central Bank of Nigeria.