Hi@chiwete,
This is really exciting. I have been watching out for a reall P2P lending platform in Nigeria. I was just going to ask, what kind of registration did you get with CBN since you are not a bank? It would be interesting to know. Also who will be the lender?your platform or everyone that has contributed to the loan amount? Are you going to accept collateral or will this be unsecured loans. I would like to test the platform once it launches so please keep us updated. Thanks
Hi @Tosh
Thanks for your interest in our product. You can get early access by registering on www.fint.ng .We are partnered with a bank, so it solves our regulatory issue. Their license allows us to operate as a financial service.
The lenders are individuals( like yourself, both retail and high net worth individuals) and Institutions(Financial institutions and other institutions looking to diversify their asset classes). Investors with as little as 20,000 Naira(investors invest in multiples of 20k naira) can invest in loans of their choosing.
Loans are unsecured. One of the reasons why credit-worthy individuals cannot borrow is because they do not have assets to back their loans but have cash(income, earnings that are verified etc). Our aim is to be able to capture the credit-worth community of borrowers without that obstacle.
Thanks. Do you charge fees and who bears it. Just so that we know how to assess the returns
Both borrower and investor.
Borrowers pay an 8% committment fee and investors pay a 1.5% service fee
cool! All the best. If you are able to screen the borrowers properly, I think you will be balling soon.
Thanks. I appreciate it
Cant wait to see you borrow or lend on the platform. Let’s achieve together.
Very nice concept I must say, but I have 2 questions for you. (1) Since the MMM bloomy days way down till this moment as a web developer if I had collected $1 from each person that asks me to build a ponzi scheme for him/her I’ll probably be a multi millionaire, no joke. Hundreds of ponzi schemes are shooting out everyday. So how do you educate your users that this is not the 3000th ponzi “scam” site? Which approach will you use? (2) Since all loans are unsecured, how will you ensure that borrowers pay back there loan? How will you stop a nigga from borrowing money from the platform and relocating to Dubai?
Hello boss, I love your idea. Its Great. I kindly need info on being regulated by CBN and not Sec. Info’s like documents that explain, where I can go to etc
Nice…2 questions;
1)Is the 8% fixed or varies based on duration and amount loaned ?
2)Is there a loan amount and duration limit?
Hi @uchdollar thank you for your questions.
Nigerians are not to blame for thinking the way they do. The only way to educate the user is to continuously sensitize the market in two ways; first is to be as transparent as possible. With our fees, our processes and who the people behind the product are, Second is to grow organically. We believe that if only a 100 people find our product to be empowering and useful initially, we will grow beyond anyone’s imagination. After we launch, we are confident reviews & word of mouth will be sufficient. The mediums we can use to achieve this would be through platforms like Radar, and speaking on a broader approach across other marketing channels.
We cannot stop anyone from travelling or relocating; but NEITHER CAN ANY OTHER EXISTING LENDING SYSTEM IN NIGERIA. However, we have set checks in place to ensure that fraud and default are kept to a minimum. Our robust proprietary algorithm matched with data from the National Credit Bureau ensures we do a deep-level analysis on the borrower. Our Physical KYC(Know Your Customer) verifies the authenticity of the individual’s info which is our second level check. BVN ties the individual to their accounts, which allows us to know the depth of their activity. Insurance ensures that if the borrower defaults as a result of loss of life, physical disability and loss of job the Investor would be protected. In the unlikely case that all these system checks fail, a collection agency that handles debt recovery for 10 of the National Commercial Banks is a partner and would assist in loan recovery.
Our ecosystem is only successful when both borrower and investor are satisfied. That we provide access to loans at great competitive rates in a timely fashion for the credit-worthy borrower and that the investor creates wealth for themselves through a transparent system that they understand. We are here simply to facilitate and assist. That’s why a bulk of our revenue comes when the borrower has been funded and when the investor is earning returns. FINT has a long-term approach to its customers and the market at large. For that reason, we build for YOU.
I hope this was helpful
Hi @Muscodee . Unfortunately, the info you require is not readily available. You would have to find contacts at either of the two regulating agencies and get feedback from them.
Thanks
Hi @Oluwasnipes
Yea, it was
was actually hoping for a micro loan version , say 15 days and 30 days which is cool for unsecured loans for employed customers . micro lenders like paylater charge borrowers between 1-1.5 % per day, so that will attract investors like moi.
Hi @lifted
That’s an interesting idea. Unfortunately, we do not offer that product yet. Investing long term is a great idea because you earn safer and more steady returns on a higher amount of money. That way, the income you earn on this model can form a core part of the financial instruments you hold as assets.
Why deep sea offshore background?
Are your peer’s oil workers?
On a serious note: You are treading on a thin ice. Fixed interest rate, insurance…
Wishing you the very best!
lol indeed
Hi @manifest ,
Could you clarify why a fixed interest rate or insurance is treading on thin ice? I would like to understand your train of thought.
The relative cost of insurance is a function of many factors ranging from risk profile of customers and market competition. To offer insurance on a loan using unproven algorithm might require the customers to pay a premium, subsequently increasing the NPV of the loan. For an average Nigerian, this means nothing. There are currently no regulations that track citizens credit profile. As such, defaulting on a loan probably wouldn’t have any effect on buying a house or getting a different insurance for a car from a different company…In addition, the Nigerian economy is extremely fickle. A single federal govt. policy can increase the risk profile of a customer. We have seen different examples such as the removal of subsidy, a ban on importations, current devaluation of currency amongst others. The aggregative effect of this on the business can be staggering. For instance, a customer with an 80% likelihood of repayment can automatically switch to 25% overnight. Now, consider this effect from an insurance point of view…you get what I mean?
There is no immediate issue with the fixed interest. However, in order to develop a sustainable business model, a fixed interest might not be the best route. For instance, one of the most common ways Bank makes money is via interest rate and service charge. Without this, a bank business is pointless. In addition, there is a rationale behind fixed interest rate. It is mostly used to attract customers engaging in long term business with the bank. For instance, a bank will be happy to offer you a $500k loan for 25 years with a 5 year fixed interest. After 5 years, the condition can change based on the economic situation. The time value of money is very important when it comes to lending and investors often want the best value for their money.
You are a smart guy and I’m sure you will figure a way out…
Thank you @manifest for your feedback, and you have an interesting viewpoint. I’ll address your concerns one after the other.
If you look at all other models around the world, Lending Club and Prosper in North America, Funding Circle and Zopa in England and even Dianrong in China, insurance is not provided. Investors understand the product is an unsecured asset, so they deal with the risk. As our society is a unique one, it was imperative this was done. Primarily because our product is new and early adopters would be weary, and given the risk factors you mention, a credit enhancement like insurance will give investors on the platform an additional level of comfort.
Also, NPV is never used to price a loan. It is usually used to price capital expenditure and real estate. But that is by the way.
You are right about insurance costing a premium, and you’re also right about Nigeria’s fickle economy. We are partnered with an insurance company that understands our product and the volatility of the market. Henceforth, we have agreed on fixed premium rates offered to the borrowers that are much less than 3% of the loan amount. This is currently lower than insurance taken against automobiles and infrastructure (two out of the five biggest insurance categories in the country).
Also, the notion that there are “no regulations that track citizens credit profile” is untrue. Currently, according to CBN regulations, all Deposit-Money Banks(Commercial, micro-finance banks), Finance Houses and other financial institutions are by law mandated to report credit data to the credit bureaus that have been set up. This system, tied with BVN allows lenders to make enhanced decisions based on the new provision of, and access to data. This access ultimately has an effect on the borrower’s ability to access new loan facilities from other financial institutions.Also, there are elements of the law that criminalize default.In such cases, defaulters can serve prison time. The ultimate goal is to create a healthy credit culture and set up a strong credit infrastructure in Africa so it would eventually matter in buying a house, car, etc.
The key to sustainability for any business is customer retention and acquisition. In this vein, to develop FINT we have carried out extensive research and discovered that borrowers do not appreciate the bank’s floating interest rates during the loan term, and we have thus proceeded with fixed rates over the entire loan term. Our product is to be seen(at the beginning at least) as a fixed term asset.Especially because asset transference does not exist like other fixed term assets(t-bills or fixed deposit accounts) You might wonder why since the longest maturity is 24 months. However, the investor market here usually would classify that as a long term asset(mainly because of volatility issues)The idea is to secure a locked-in rate ab initio, that is both agreed upon by investor and borrower. This gives both the borrower and investor the ability to predict cash flows and provide a level of consistency.
However, the interest rates associated with borrower classes (AA-EB) before their loans are uploaded on the platform to be funded vary with economic conditions.This constitutes part of our interest rate pricing model. When the economy is doing well, interest rates for all borrower classes go down and when the economy is doing worse vice versa. It is our goal to continuously provide the best possible rates for our borrowers, and the most attractive returns for investors given the risks involved.
I hope this clarifies most of your concerns. Feel free to voice any others you may have…