Africa focused digital payments and commerce company, Interswitch on Friday 6th of October 2017 launched a multi-channel low-level retail lending without collateral service known as the Interswitch Lending Services Platform. Interswitch is doing this in partnership with six leading banks and three innovative credit providers.
“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,” said CEO for Switching and Processing at Interswitch Group, Akeem Lawal.
This service essentially revolves around 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-collaterized micro and nano-loans to individuals and SMEs across various channels. It bridges the gaps currently existing in Nigeria as far as access to credit between deserving but underserved individuals and SMEs as well as credit providers. Interswitch will be able to achieve this by means of reliable lending and de-risking engines based on customers’ transaction history and digital footprints.
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.
Customers can use any 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 16million 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.
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.
The bank partners who are on board Interswitch Lending Services include FirstBank, UBA Bank, Heritage Bank, Unity Bank, Fidelity Bank and Ecobank. The lending partners are Kwikcash, Paylater and Ferratum.
What you need to know about this service
- You can get a loan on this platform through the participating banks/partners mobile apps, USSD or ATMS
- You can get between N1000 and N200, 000 although it depends on how much cashless transactions you do.
- To qualify for a loan all you have to do is open a bank account and do more electronic transactions.
- The interest rate for the loan depends on the lender’s risk evaluation. It is usually between three percent and 15 percent and from 10 days to 180 days.
- If you don’t pay back the loan you will be blacklisted and reported to several entities and won’t be able to get a loan in the future.