Paylater, a microfinance service provider operating in Nigeria, has issued over $17 million in loans to its users in 2018. The company made the announcement on August 2nd, stating that its mobile phone app had been downloaded by 1 million users since its launch.
Paylater’s announcement comes at a time when 61% of Nigeria’s 200 million-strong population is either under-banked or unbanked.
Fintech companies like Paylater represent a tremendous opportunity to get formal banking services in the hands of Nigerian consumers to provide much-needed liquidity for entrepreneurial investment, personal development, or unexpected expenses.
The organization believes that consumer credit is nearly non-existent in Nigeria.
“But, Paylater is issuing loans to Nigerians completely digitally, without seeing or speaking to customers. Customers can receive funds in their account in as little as 5 minutes, with no need for paperwork, collateral or guarantors,” the lender said in a statement.
Digital financial services platforms have been well received by consumers in other countries in Africa. Kenya, for instance has been keen to adopt mobile lending platforms such as Branch and Tala, which offer the same services as Paylater.
Before Paylater, only commercial banks with physical branches nationwide and extremely large capital bases had the reach, stability and customer trust to offer financial services to a variety of people.
“Unfortunately, these same institutions turned record profits by taking deposits from average consumers, and reserving actual banking services like loans and investments for large corporate entities and high-net worth individuals,” said Paylater.
The lender argues that access to credit is a fundamental human need and the foundation on which most modern economies are built.
With over 800,000 registered users, across every Nigerian state, the technology platform has supplemented its loan growth with very strong early adoption of its bill payments and investments features as well.
“We are very excited by the market adoption of Paylater and we believe there is still a significant growth opportunity ahead for digital financial services,” said company Co-founder and CEO, Chijioke Dozie.
His sentiments come at a time when banks in Nigeria are repositioning themselves for growth and expansion, with help from the International Finance Corporation (IFC).
The IFC’s commitment to help Nigeria comes after financial crisis-driven turbulence.
As such, the Central Bank of Nigeria has committed to reinvigorate the country’s banks through new policies, while the IFC is putting new resources into long-term financing and entering into agreements to strengthen banks and help them adopt better practices.
In the meantime, innovators like Paylater are driving the banking industry’s growth through non-conventional practices. The organization has since implied that it expects further revenue growth in the near future.