A financial expert, Ugo Obi-Chukwu, has shared his experience with using one of the many quick loan banks in Nigeria.
According to him, these quick loan banks are becoming a major competition for the traditional banks. He, however, made it known that their modus operandi is reminiscent of a dark past.
See his Twitter thread below-
So I’ve been getting text messages from Kwik Money for some weeks now and decided to try my luck.
This is my experience. #Thread pic.twitter.com/UbBrNzHonZ
— Ugodre (@ugodre) June 28, 2019
So I’ve been getting text messages from Kwik Money for some weeks now and decided to try my luck. This is my experience.
I picked up my phone and decided to follow their lead.
As can be seen from above, you can visit their website to apply or apply using USSD code and expect you to simply follow the prompt. This is an apparent move at ensuring you can get loans without relying on the Internet
Everything looked ok and I’m salivating already. I quickly requested for a loan.
I went straight for a loan anyway.
I thought hard here. How much do I go for? Well I wore my accountant cap and went for the lowest. Don’t yab me oh.
I thought hard here. How much do I go for? Well I wore my accountant cap and went for the lowest. Don’t yab me oh 😀 pic.twitter.com/aHy77VrVmN
— Ugodre (@ugodre) June 28, 2019
But 20% though? Looks like some of these QLB (that’s what I call them) offer very super expensive loans. I wasn’t even sure if it’s 20% a month or per annum or per day. I reckon it’s per month. But they should just state it nau.
I selected my N500 jeje and waited for my alert.
And then I wondered
where will this money be paid into? My bank account? I don’t recall sharing that. Maybe they’ll just text me an alert to my mobile and then I’ll go pick it up from MTN? This looks amazing. Loans just like that?
1 minute, 1 hour and now a day passed and I haven’t seen the alert yet. Please if you know KwikMoney’s twitter handle or contact ask them where the N500 is.
Quick Loan Banks are increasingly proliferated in Nigeria and it’s putting traditional banks on the defensive. However, their modus operandi is reminiscent of a dark past
In the hey days of new generation banks, they applied the same model. Mega ads, easy to get loans without collateral and high interest rates. Unlike today’s startups, they weren’t backed by patient capital so they quickly went bust.
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This time around, some startups see raking in losses and growing topline as a sign of growth. Loan default rates (NPLs) are more accommodative for these QLBs which only means they are incentivized to take more risk.
Add to the fact that competition is rife with each lender looking to outdo the competition with faster loans. Is this good for the Nigerian Economy and middle class in particular, yes but this is a potential banana skin.
Collectively I doubt their capital base is up to a 10th or GTB’s Net Assets so maybe they don’t pose a major systemic risk. However, these things take time to unravel and I hope if it ever does we will be better off.
Have you used any of these QLBs before? Please share your experience.