One of the major challenges confronting everyday Nigerians is access to loans. Big commercial and retail banks around the country do not lend to low the income and blue-collar population.
While there are credit unions popularly called co-operative societies, borrowing from family and friends and more prevalent is an employee or traders’s joint contribution in form of a monthly contributory schemes are the alternative credit pipelines Nigerians have relied on to meet their day to day credit needs.
However, some companies have seen these opportunities and they are ready to take advantage of it.
In our search to discover startups who are disrupting the business and fintech (financial technology) landscape, PageOne stumbled upon PayLater.ng.
PayLater is an Android exclusive mobile app where anyone with a Facebook account can get micro-credit up to NGN10,000 to help cover unexpected expenses or urgent cash needs. The app allows simplifies the application process with a three step process to getting credited within 24 hours. To verify each applicant, the app requires the bank verification numbers, BVN to authenticate every application.
As to how PayLater determines who gets its loan or not, the company said “we employ the use of an automated decision engine which profiles applicants and provides an informed decision on each loan application – approved or declined – within 30 seconds. This includes (but is not limited to) checks on credit performance on prior financial obligations, BVN details, and data provided by the individual”
PayLater seems to be the most affordable credit provider as its interest rates are very low. The company charges 1% daily, ie 15% for a 15 day loan and 30% for a one month loan. So if any customer gets a loan of NGN10,000, the customer is to pay on average NGN11,500 at the end of the month.
However, the company relies on the trust of its debtors to pay back. To repay a loan debtors are required to make individual transfers or pay through the app using their debit cards.
PayLater is owned by One Finance.The company operates another unsecured lending firm called One Finance, the company provides up to NGN2 million unsecured loans. PayLater is perhaps its product to cater for customers with smaller credit needs.
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