By Raheem Akingbolu
Interswitch has intensified plans to boost financial inclusion drive through provision of non-collaterised micro and nano-loans to individuals and SMEs across various channels. The new innovation is design to accommodate multi-channel low-level retail lending without collateral.
Historically in Nigeria, there have been long-standing gaps in availability of credit or loans to individuals and businesses within underserved demographics of the Nigerian population. It is believed that these people have experienced difficulties in accessing unsecured, short-term micro-loans from financial instructions for several reasons.
As a result of this, the payment company has partnered six leading banks and three innovative credit providers to address this challenge with the introduction of theÂ Interswitch Lending Services Platform.
According to the management of the company, this service essentially resolves the ‘missing middle’ challenge by providing a holistic proprietary credit analysis, scoring & management technology which bank and non-bank credit providers can leverage to provide non-collaterised micro and nano-loans to individuals and SMEs across various channels. It was also said that it would bridge 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 customersâ€™ transaction history and digital footprints.
According to the Divisional CEO for Switching and Processing at Interswitch Group, Akeem Lawal, 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 Nigeriaâ€™s resurgent economy.
â€˜â€™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 16million Nigerians (which includes active customers on Quickteller) to be assessed for possible qualification for a loan.
â€œInterswitch 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.â€
Speaking about the essence of the lending platform, the Divisional CEO said what the company had basically done was 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.
â€œWe 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,â€ he said.
Current bank partners who are on board Interswitch Lending Services includeÂ FirstBank, UBA Bank, Heritage Bank, Unity Bank, Fidelity BankÂ andÂ Ecobank. There are also three Lending Partners;Â Kwikcash, PaylaterÂ andÂ Ferratum.