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Insight & Analysis - February 3, 2022

Approved Microfinance Banks You Can Get Loans from in Nigeria

Now that the arena appears to have been infested with all manner of service providers, here are the approved MFB you'd want to consider.

The astronomic growth of the Nigerian fintech industry within the past few years has largely improved the quality of life of Nigerians. It has seen a good number of tech startups springing up to offer an array of services ranging from savings to investments, utility bill payment, cross-border remittance, and provision of microloans to a large number of Nigerians. These Nigerians were hitherto unbanked or largely unsatisfied with what the frontline banks could offer.

While this provision was welcomed with open arms by Nigerians based on the fact that it was previously near impossible to get such an array of tailored services from the regular banks without collaterals and cumbersome paperwork; it also gave room for unregistered, unregulated, mushroom investment platforms and loan sharks to spring forth.

Now, the arena appears to have been infested with all manner of service providers.

These fintech service providers, some of whom are not registered with the relevant regulatory authorities and where they are, often do not play by the rules, throw offers of loans at users via targeted ads on social media networks with a short payback time frame. Should a slip occur on the part of the customer as to the agreed repayment plan/date of such loans, all hell is let loose.

They dig into the phonebook of such a ‘defaulter’ and begin sending embarrassing messages to contacts of such an individual.

One critical check for anyone looking to get quick loans which might be for purposes ranging from business to resolving urgent personal needs is to find out if such a brand is truly licensed and authorised by the CBN to function as a microfinance bank.

Being licensed by the CBN guarantees that should you intend to put away your savings in such a platform, you can rest assured that your deposit is safe as it is insured by the Nigerian Deposit Insurance Corporation (NDIC).

According to the Central bank of Nigeria, only approved microfinance banks are empowered to give out micro-loans (short-term loans with smaller amounts meant to be accessible by self-employed, startups and micro-enterprises) up to a maximum amount of N1 million per transaction.

Per CBN, the total number of microfinance banks currently licensed as at June 30th 2021 stands at 876 and these are scattered across the length and breadth of the country. However, our immediate focus here is the neobanks, online-focused financial institutions that operate without traditional physical branch networks. They are listed below:

Carbon MFB: With its physical office space located at 642C Adeyemo Alakija, Victoria Island, Carbon is a fully digital-only microfinance bank licensed by the CBN.

BLUE RIDGE MFB: Blueridge is a tier-one microfinance bank and along with its loan provision has a saving provision that offers between 8% – 20% interest on savings.

BROADVIEW MFB: Broadview offers salary advance, business, personal, and education loans as well as business development services, funds management, and overdraft facility.

CEDAR MFB: Cedar Microfinance Bank is a state-licensed microfinance bank and provides group lending, individual loans, asset financing, micro-insurance, and esusu.

CREDIT AFRIQUE MFB: A tier one microfinance bank, Credit Afrique MFB along with offering loans has a suite of investment products customers can take advantage of in Nigeria.

EYOWO MFB: Eyowo MFB is registered by the CBN as a tier-one microfinance bank and provides microloans along with other services like personal and business accounts, provision of debit cards, etc.

FAIRMONEY MFB LTD: Fairmoney offers loans at rates as low as 0% and up to N1 million with no collateral in Nigeria.

FORTRESS MFB: Fortress MFB provides personal and business loans of up to N1,000,000 to civil servants, bankers, and members of the security corps.

KUDA MFB: With a physical office address located at 151, Herbert Macaulay Road, Yaba, Lagos, Kuda is a tier-one Microfinance Bank that helps its customers get the best of banking services without the regular excessive charges.

LAPO MFB: LAPO offers Regular, SME, Educational, and Agric loans in Nigeria.

LETSHEGO MFB: Letshego MFB operates with a national MFB license from CBN and is a Pan-African microfinance bank with a presence in 11 African countries including Nigeria. It offers ‘Step Up’ loans for micro, small and medium enterprises such as manufacturers, artisans, retailers, and wholesalers. Up to N20,000,000 can be accessed from the platform.

MAINSTREET MFB: Mainstreet MFB is a subsidiary of Mainstreet Bank and was incorporated in 2008. It provides micro-financial services for individuals and small business owners with products such as Main Essential and Main Swift Cash.

MAYFAIR MFB: Mayfair Microfinance bank was licensed in 2009 by the CBN. It offers Current and Savings accounts and flexible loan facilities such as Relief Loan, Consumer Asset Finance Loan, Term loans, Overdraft Loan, and more.

PURPLE MONEY MFB: Purple Money MFB operates with a tier-one microfinance license from the CBN and offers financial products and services to both individuals and companies. It offers a unique BuyIT service through which users can buy and pay for things in installments.

RENMONEY MFB Limited: The company began operations in 2012 initially under the name RenCredit in Lagos. The platform offers personal/business loans from N20K to N6 Million. It also offers other services like deposits and savings.

VFD Microfinance Bank: Popularly known as Vbank, it was incorporated in Lagos in 2015. Users can open an instant account without paperwork and make requests for microloans without collateral.

READ ALSO: Top 7 African Countries with the Most Chinese Debt

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