Despite being the commercial hub of Nigeria, seven out of ten workers (70%) in Lagos are unable to access loans or credit from their employers, a new study reveals.
This information is outlined in the “State of the Employed” report by PaidHR, a Nigerian startup specializing in HR management solutions for businesses.
The report, which analyzes employment trends in Lagos, offers a thorough examination across various demographics—young, old, male, and female—with 51% of respondents aged between 19 and 35.
The report also highlights that 58% of working individuals exceed their primary monthly income, leading them to rely on alternative sources of income, such as payday loans.
“Our key findings include 58% of working individuals spend more than their primary income monthly.
“7 out of 10 working individuals do not have access to loans or credit through their employers,” the report says.
Productivity and Employees Fulfilment
The report also delves into the productivity trends of employees in the State and it relationship to employee’s fulfilment.
According to the report, 58% of respondents believed that their productivity was not directly influenced by financial factors.
However, they reported that their mental and emotional well-being was significantly impacted, expressing considerable dissatisfaction with the support provided by their employers.
The study further shows that a significant rise in debt also reduces the productivity of workers by 30% in the State.
“Interestingly, 58% of respondents felt that their productivity was not directly affected by money. Rather, they claimed that their mental and emotional state of mind was more responsible and expressed great dissatisfaction with the support received from their employers,” the report says.
What you should know
Nigeria, with its vast and rapidly growing population, continues to grapple with a significant financial gap, particularly in terms of access to credit facilities.
A substantial portion of the population, especially those within low-income brackets, finds themselves excluded from traditional credit systems, including those offered by microfinance banks.
This exclusion creates a precarious situation, forcing many Nigerians to resort to informal and often predatory lenders—colloquially known as loan sharks—who exploit the deficiencies in the formal financial sector.
The recent approval by President Tinubu of a consumer credit scheme, aimed at providing workers with the means to secure loans for essential needs such as housing, food, and healthcare, marks a commendable step towards addressing this financial gap.
Additionally, the implementation of a student loan scheme designed to facilitate access to educational funding.
While these initiatives are indeed welcome, they remain insufficient in bridging the extensive gap between the population and their access to capital.
