To bridge the gap in accessing unsecured short-term micro-loans in Nigeria, Interswitch in partnership with six lending banks and three innovative credit providers has introduced a lending services platform.
The lending platform, named Interswitch Lending Services, is an intervention, which essentially resolves the challenge by providing credit analysis and scoring based on customer historical transaction data which bank and non-bank credit providers can leverage to provide collateral free micro and nano loans to individuals and small businesses across the channels.
The process, according to the firm at the weekend in Lagos, bridges the gaps currently existing in Nigeria as far as access to credit between deserving but underserved individuals and SMEs on one hand, and credit providers on the other, by means of reliable lending and de-risking engines based on customers’ transaction history and digital footprints.
Current bank partners who are on board Interswitch Lending Services include FirstBank, UBA Bank, Heritage Bank, Unity Bank, Fidelity Bank and Ecobank. There three lending partners are Kwikcash, Paylater and Ferratum.
Customers can use any of the ATM, mobile banking apps or USSD channels to access loans, essentially achieving the goal of allowing different customer segments to meet personal and small business needs, thereby accelerating growth in business activities within Nigeria’s resurgent economy.
The solution focuses on enhancing financial inclusion by providing a tested and reliable end-to-end credit administration infrastructure, which is open and flexible enough to accommodate both bank and non-bank lenders.
The Platform has been integrated by Interswitch to what is perhaps the largest customer database, allowing almost 16 million Nigerians (which includes active customers on Quickteller) to be assessed for possible qualification for a loan. Interswitch had formed strategic partnerships with a number of credit providers to efficiently target customers who are available on those partner platforms, offering nano-loans at attractive interest rates and based on available credit history and predictive analytics through information technology to determine credit-worthiness.
Speaking about the essence of the lending platform, the Divisional CEO for Switching and Processing at Interswitch Group, Akeem Lawal, said: “What we’ve basically done is to partner with key lending players in the industry to help accelerate the growth of retail lending to the underserved population in Nigeria through reliable credit models. We are starting with customers who do transactions on the Interswitch network. Our partners include banks with whom Interswitch has established long term relationships.
Addressing the question around the reason why Interswitch is doing this, Akeem added:“We have done this to provide accessible credit for the financial needs of customers who are presently underserved by mainstream finance, or who are excluded in one way or another from being able to access credit through currently existing conventional channels. We are doing this by addressing the problem of access, reach and risk in a novel way that ensures that we can achieve nationwide scale.”
According to Interswitch, customers who access loans through this platform can conveniently make their loan repayments through a variety of channels such as – using their cards, at ATMs, online at quickteller.com or through Bank branches.
Another important consideration is that customers who typically use electronic channels or embrace cashless transactions are more likely to get better loan offers than others who have not embraced e-payments, simply because most of the historical data is generated on the basis of usage of e-payment channels, such as Quickteller.com.
