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.

Bua group

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 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.

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.

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.

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.

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

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.

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