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
Senate President lists benefits of PIB as public hearing on the bill opens
Ahmad Lawan has listed the benefits of the PIB presently before the National Assembly for consideration.
The President of the Senate, Ahmad Lawan, has said that the Petroleum Industry Bill (PIB) which is presently before the National Assembly for consideration and passage will ensure that Nigerians benefit optimally from crude oil production and sale of fossil fuel reserves.
According to a statement that was issued by the Special Assistant, Press to the Senate President, Tabiowo Ezrel, this disclosure was made by Lawan, while declaring open a 2-day public hearing on the bill by the National Assembly on Monday, January 25, 2021.
The Senate President pointed out that the National Assembly in its consideration of the piece of legislation would ensure that the bill when passed into law, guarantees improved revenue earnings for the country.
What the Senate President is saying
Lawan in his statement said, ‘’Let me say this, we (National Assembly) will pass this bill not without ensuring that it is a bill that satisfies certain conditions. Nigeria is blessed with these resources, we want Nigeria to benefit optimally from them. In fact, we are in a hurry because we have lost so many years of benefits that we could have had.’’
He, however, noted that the non-passage of the PIB had been a major drag on the industry over the years, significantly limiting its ability to attract both local and foreign capital at a time when many other countries are scrambling to exploit their oil and gas resources.
Going further, Lawan said, ‘’The mere knowledge that the nation’s oil industry is still being governed by laws enacted more than 50 years ago is ludicrous and extremely disappointing.
‘’As legislators, we will strive to deliver a Bill that will enhance the growth of our oil and gas industry, modernize our fiscal system and enhance competitiveness, while creating harmony for all stakeholders. This is a promise we have made and that we shall achieve.’’
‘’Nigeria must have an oil and gas industry that benefits its people. Equally, our oil and gas industry must be competitive. We must create a sustainable investment climate, where business in the sector will flourish,’’ he said.
He also added that the determination by the legislature to pass the Bill is driven by the need to overhaul a system that has refused to operate optimally in line with global standards, resulting in loss of continental competitiveness, transparency, accountability, good governance and economic loss for the petroleum industry and the country.
The Different chapters of the PIB
The Senate President revealed that the PIB comprises of 4 chapters that outline;
- How to create efficient and effective governing institutions with clear and separate roles for the petroleum industry,
- Establish a framework for the creation of a commercially oriented and profit-driven National Petroleum Company,
- Promote transparency, good governance and accountability in the administration of the petroleum resources of Nigeria among others.
Other benefits of the PIB
He also noted that the PIB upon passage and assent into law by the President;
- Would foster sustainable prosperity within host communities, provide direct social and economic benefits from petroleum operations to host communities,
- Create a framework to support the development of host communities among others
- Establish a progressive fiscal framework that encourages investment in the Nigerian Petroleum Industry,
- Balancing rewards with risk and enhancing revenues to the Federal Government of Nigeria,
- Provide a forward-looking fiscal framework that is based on core principles of clarity, dynamism and fiscal rules of general applications,
- Establish a fiscal framework that expands the revenue base of the Federal Government while ensuring a fair return to investors.
Lawan assured that the National Assembly during the public hearing would deal with all issues relating to the oil and gas industry with thoroughness and effectiveness so as to avert colossal losses to the nation’s economy.
Lawan: PIB will ensure Nigerians benefit optimally from resources
***As Senate begins public hearing on bill pic.twitter.com/nSycKWW4lH
— President of the Senate (@SPNigeria) January 25, 2021
Nigeria’s Sparkle partners with Network International for virtual and physical payment cards
Nigeria’s Sparkle signs with payment experts Network International for virtual and physical payment cards.
Nigerian fintech startup Sparkle, a digital ecosystem providing financial, lifestyle, and business support services, has partnered with Network International, to power its recently launched payment card offering.
This is coming months after collaborating with Visa to enable them to issue Visa cards to its users.
Founded by former Diamond Bank chief executive officer (CEO) and tech entrepreneur, Uzoma Dozie with the aim of providing seamless solutions to Nigerian individuals, SMEs, and retailers. Sparkle’s new virtual and plastic debit cards are targeted at SMEs and upwardly mobile, unbanked consumers across Nigeria, bringing them the convenience, flexibility, safety, and security of cashless payments across various channels.
What they are saying
- According to Uzoma Dozie, “Digital adoption and customer experience are going to be dependent on the people, platform, and partnership. In the area of payment processing and data insights, Network International brings that to our platform, and we are truly excited about the future of the partnership and what it means for the enablement and transformational impact for Nigerians anywhere in the world who are connected to the Sparkle platform.”
- Also speaking on this new partnership, Andrew Key, Managing Director – Africa, Network International, said, “We are delighted to strengthen our strategic alliance with Sparkle as it seeks to further disrupt the payments offering to consumers and retailers in Nigeria. Building on our two decades of experience within payments and deep insight of the African market, we look forward to deploying our trusted platform and best-in-class technology towards supporting digital and financial inclusion of Nigerian consumers and businesses.”
Sparkles’ collaboration with Network International is based on their shared commitment to further the adoption of digital payments among emerging markets across Africa and the Middle East. Its users can make in-app payments with the new virtual card, and also make e-commerce transactions with the cards attached to their Sparkle profile.
This collaboration will offer Sparkle access to the Network’s years of experience and expertise in creating card solutions for emerging markets. The company can also benefit from Network’s advanced digital infrastructure and robust security protocols, avoiding the need to invest in expensive card management infrastructure.
AFEX appoints Kamaldeen Raji as MD of AFEX Fair Trade Limited
Mr Kamaldeen Raji has been appointed as the Managing Director of AFEX Fair Trade Limited.
Leading commodities market player, AFEX has announced the appointment of Kamaldeen Raji as the Managing Director of AFEX Fair Trade Limited (AFEX Fair Trade).
This information was contained in an exclusive disclosure sent to Nairametrics today the 25th of January 2021.
According to the information contained in the press statement, the appointment is in line with AFEX’s mandate of strengthening trade infrastructure for Nigeria’s commodities market, while providing support for smallholder farmers, who are key players in the agricultural value chain.
What they are saying
The CEO of AFEX, Ayodeji Balogun, who commented on the appointment of the New Managing Director, said:
- “I am delighted to have Kamaldeen stepping into the leadership at AFEX as the Managing Director of AFEX Fair Trade. This is in alignment with AFEX’s five-year strategy that consolidates the best aspects of our business into business units that will deliver impressive wins in trading, financing and market system development for Africa’s commodities market.”
Kamaldeen Raji, Managing Director, AFEX Fair Trade limited said:
- “AFEX has delivered on its promise for a working commodities exchange model for West Africa after six years of operations in Nigeria. I am excited to join the executive leadership to contribute to our next five years as a business.”
- “As I drive our strategy to reach one million farmers and expand our national storage capacity to 500,000 MT over the next five years, AFEX Fair Trade will build on the success of previous years.”
- “Through AFEX Fair Trade, AFEX will continue to contribute to impact metrics that align with the United Nation’s Sustainable Development Goals (SDGs) 1, 2, 5, and 8; no poverty, zero hunger, gender equality, and decent work and economic growth.”
Kamaldeen prior to his appointment as the Managing Director of AFEX Fair Trade Limited had previously served in Commercial Manager’s capacity for AFEX. This position monitored all commercial partnerships with a focus to drive revenue activities and growth opportunities.
It is important to note that, AFEX Fair Trade is one of AFEX’s business units, responsible for commodities trading and storage, the company is charged with the task of providing extension services to farmers in a bid to boost their productivity and incomes across all segments of the agricultural value chain.