The Fintech ecosystem introduced a lot of dynamism into the financial industry. Changing the way transactions are conducted, to the processes of acquiring loans, making investments, and saving money.

Fintech loan in Nigeria is the sector of Fintech whose service offerings are loan procurement to its customers.

There are a lot of lending startups in Nigeria today, each evolving easier and fastest way of giving access to loans.

An arm of Fintech Loan in Nigeria that has supported the proliferation of loan collection is Peer to Peer enabled lending which allows an individual to collect loans directly from another mostly without passing through intermediaries.

Peer to Peer lending leverages online platforms to conduct its activities. This makes it easy for transactions to be conducted from anywhere and within a reasonable time too.

Medium, Small, and Micro Enterprises (MSMEs) owners usually take loans through this medium as it has low interest rates.

Also, it is a known fact that the majority of businesses in Nigeria consist are MSMEs therefore there’s a wider customer range.

Artificial Intelligence, Blockchain technology, big data are some of the technology tools used by these Fintech loans to determine the creditworthiness of borrowers.

Fintech loan in Nigeria has also gone further to offer personalized loan offers based on the need of the borrower.

Most of these Fintech institutions offer these loans without collateral and proper research on the borrower while some though they don’t collect collateral, they research the intended borrower to ensure the borrower can pay the money when it’s due.

Big data Technology is mostly used by these Fintech institutions, they look at the socio-demographic data, behavioral data and sometimes they look at the banking record of the intended borrower.

This method used by Fintech loan in Nigeria seems to have not produced the desired outcome as there has been an increase in loan defaults.

The recent global pandemic is said to have contributed to this increasing loan defaults.

However, some financial reports maintain that due diligence is not done on these borrowers as most borrowers have bad credit habits and can hide it since the process is not thorough.

This has made Fintech Loan platforms lose money in Nigeria. To salvage this solution, some Fintech loans have started collecting collaterals for loans such as car papers and credentials to ensure that defaults are minimized.

Other practices are being incorporated by various Fintech Loan platforms to ensure they protect their business. Reduction of loanable funds, increase in the criteria to be met and the no giving out loan to a borrower who is yet owing are some of the new practices.


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