Leveraging digital technology in lending


After reaching a daily record of 1 billion Naira in loan value, Access Bank Plc is implementing measures to boost lending in the country, writes Nume Ekeghe

Nigerian banks are seen as unfriendly to retail customers, with high interest rates and the amount of collateral they require when granting loans.

In recent years, several fintech companies have emerged, some promising modest amounts of unsecured loans, others marketing financial products that make more money for their clients.
A notable example is Access Bank. The bank has expanded its digital loan portfolio, giving Nigerians quick, 24/7 access to emergency funds without any collateral.

Recently, the bank announced that it had reached a daily record of 1 billion naira in loan value.
According to Victor Etuokwu, executive director of retail banking at Access Bank Plc, “We are at the forefront of digital lending across the continent. This is a deliberate choice we made when we introduced the first USSD-based digital lending product in Nigeria, based on our deep understanding of our operating environment.

“Over the past two years, we have disbursed over 3.5 million loans to individuals. We recognize that this is no small feat compared to where the market originated, but it remains a scratch in the overall potential of this market.

“This year alone, we have disbursed over 45 billion naira in more than two million personal payments and have recently seen our volumes increase to one billion naira per day.
“This achievement and our focus on personal lending reiterates our commitment to democratize access to financial services by leveraging digital technology. “

Digital loan
In 2018, Access Bank launched PayDay Loan, a digital loan service. Unveiled in partnership with Remita, the PayDay Loan required no guarantees or guarantees and allowed customers to obtain loans instantly without going through the bank. It was also designed to allow clients to meet their urgent financial needs before receiving their paycheck.

Etuokwu added, “Obtaining loans in Nigeria has always been known to be limited, either due to access issues or collateral, including the length of the approval process.

“With our obligations to our clients, especially during difficult economic times, we underscore Access Bank’s position in providing lifestyle products and services that meet their financial needs. “
Along with the launch, the bank announced a special USSD code through which customers could use the service.

“The product is unique because the beneficiaries only need to be diligent employees who can now get stress-free instant loans or bring in a guarantor,” the bank said.

Launch of QuickBucks
Since launching PayDay Loan as a digital flagship product, Access Bank has continued to expand its loan portfolio using innovative algorithms and deep machine learning capabilities. The bank’s innovation journey in retail has led it to expand its digital loan offerings to other multi-tenant variants to meet the needs of its various retail customer segments.

After Payday, Access Bank also launched a dedicated loan application platform known as QuickBucks in the third quarter of last year. Quickbucks is a mobile banking app for digital loans aimed at improving the borrowing experience for customers for retail loans.

As part of its commitment to deepen digital finance, the bank has also taken a step forward in providing access to phone ownership by recently launching a 12-month device ownership program where any employee customer can select a phone. of your choice from our QuickBucks. app and enter one of its partner outlets across the country to pick up the phone.

Support customers
Head of Digital Banking Business Development, Access Bank, Chinedu Onuoha, recently commented on the bank’s digital innovation campaign.
“Our aim is to ensure that there is a digital loan product for every adult Nigerian who has a proven livelihood, because we know that every individual at one point or another needs some form of financial support.” , did he declare.

“Our flagship digital loan product, PayDay Loan, is designed to help individuals meet their urgent cash flow needs. Although the term of this loan is 30 days, we also have loans with terms of three months and six months.

According to the bank, its digital loans are accessible 24 hours a day and can be accessed through its shortcode.
“It can also be accessed through the Access Mobile app and the QuickBucks app; these apps are available for download from the Play Store and iOS stores, ”he added.

The bank explained that its drive to digitize lending remains the future of the bank. According to a McKinsey study, “Credit is at the heart of most customer relationships, and its digitalization offers significant benefits to banks and customers alike. For the bank, successful transformations improve revenue growth and deliver significant cost savings. “

But challenges abound. For example, only about one in five adults and 38 percent of households in Nigeria report having a formal bank account.

If people cannot access (or do not trust) formal banking systems, it will remain difficult to make credit universal and cheap, as it should be.
There is also the issue of strong competition from new players on the scene and government regulation.

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