Access to credit is one of the major challenges facing nano, micro and small businesses in developing countries like Nigeria. Players in the credit field of emerging economies often have to grapple with tuberlent economies, imperfect information about borrowers, among others.
Due to the complexity of these challenges, minimising risk becomes a default option for many financial services providers. Hence, big players like commercial banks require collaterals for loans, which may not be available for individuals running nano or micro ventures. This in turn constrains the capacity of these businesses to grow to the next level.
Over the past couple of decades, Microfinance banks have dared to rise to the occasion of providing credit for those who cannot afford credit. With the rise of Nigeria’s fintech revolution, some startups which are either MFBs or affiliated to banks, have also emerged to provide credit digitally across th country.
This is another way in which digital and financial inclusion is facilitating economic growth. In no particular order, we rounded up 4 fintechs in the credit space, and here is what you should know about them;
GetCarbon
Carbon offers business and personal loans without guarantors or collaterals. They also utilise a credit metric that increases future loan amounts and reduces interest rates to incentivise repayment.
Beyond cash loans, they also offer Buy Now Pay Later (BNPL), enabling users to spread the cost of purchases over 4 instalments. This can be useful for businesses and individuals alike.
Moniepoint
Credit is one of the financial services that Moniepoint offers to businesses who are customers. They offer zero or low collateral, working capital loans that support small businesses. Their approvals within 24-72 hours*, and tenures match the pace of borrowers.
Branch
Fintech brand, Branch offers wallet and credit services to customers. They utilise a credit-rating system to determine future loan amounts for customers, which also serves as an incentive for repayment. Loan approvals are within 24 hours*
Traction
Traction apps offer a suite of services for businesses, including a loan service called Cash Advance. Traction loans need no collaterals, in addition, their percentage-based flexible repayment schedule allows you pay less on slow days and more on busier days. To access loans on Traction, you need to be a merchant on the platform.
*According to the brand website