Access Bank Woos Customers With New Quick Loan Program
One of Nigeria’s largest banks, Access Bank Plc, has introduced a fast loan or payday loan program with a daily target of lending 400 million Naira to at least 20,000 customers.
On the bank’s website, they point out that it is not necessary to have a payday account in Access Bank to access the payday loan. The bank claims that you will have to open an account at the bank for the loan to be disbursed, however.
Access Bank Plc Managing Director / Managing Director Herbert Wigwe, who recently revealed this, said the bank disburses around N200 million a day to 4,600 customers and wants to double that number to N400 million and 20,000 customers by the end of the year.
“We have also grown our digital lending business with respect to our financial inclusion and normal traditional retail strategy by expanding our digital lending capabilities to include more products such as pay raises, small bills, personal loans and device financing in addition to what we call our payday loans.
Access Bank charges an initial fee of 1% flat rate, 4% flat rate interest and insurance of 0.15% of the loan amount is taken out upon loan disbursement (5.15% in total, all payable in advance) . The loans are for 31 days. The average cost of all-inclusive loans in the market is between 4-6% per month.
Wigwe also claims that it has been aggressive in marketing its payday loans and has now set aside around 18 billion naira in the first half of 2019 alone, up from 11 billion naira a year earlier, noting that the bank has issued approximately 1 million one-time loans in June. year.
He explained that the default rates on his payday loans are less than 3 percent, saying that in most cases it is 0 percent. Explaining further, he claimed that the reason for the low default rates was that their borrowers were employees who already had accounts opened with banks and whose salaries were domiciled in those accounts.
So for the digital loan portfolio, which is largely dominated by pay-per-minute loans, the NPL ratios there are typically well below 3%. Now, the reason for this, as Herbert alluded to earlier, is that they are based on clients who already have their wages with us.
Access Bank claims to have 31 million customers and acquire at the rate of 500,000 new customers per day, relying mainly on digital means and its agent banking initiative, and has signed around 1.6 million new customers since its merger with Diamond Bank.