According to the Central Bank of Nigeria (CBN), Microfinance banks are companies licensed by the CBN to carry on the business of providing financial services such as savings and deposits, loans, domestic funds transfer, and non financial services to microfinance clients. The smallness of the loans or financial services rendered is what differentiates microfinance banks from the regular or bigger banks.
What are Microfinance Bank Loans?
Microfinance bank loans, on the other hand, are small loans granted to micro enterprises or individuals by microfinance banks based on the borrower’s cashflow. Important to note the keyword – borrower’s cashflow. Microfinance loans usually are based on the cashflow and the ability of the borrower to pay back.
Information available on the CBN website, as at 2022, shows that there are over 900 registered microfinance banks in Nigeria licensed to carry on the provision of small and micro financial services to small, micro businesses and individuals.
Some Prominent Microfinance Banks in Nigeria
Some of the bigger microfinance banks in Nigeria include;
Kuda Microfinance Bank
LAPO Microfinance Bank
ACCION Microfinance Bank
Assets Microfinance Bank
Mutual Trust Microfinance Bank
Fina Trust Microfinance Bank
VFD Microfinance Bank
Sparkle Microfinance Bank
BoI Microfinance Bank
If you are looking for a comprehensive list of microfinance banks licensed to operate in Nigeria you can check out the CBN’s list of microfinance banks.
Online Loans in Nigeria
Online lending in Nigeria has certainly passed its infancy stage and is now steadily on the rise with may players joining in the past few years.
In 2023 the Federal Competition and Consumer Protection Commission approved 173 loan apps and barred several other illegal ones. 119 of these 173 loan apps had full approval while the rest had conditional approvals. So this is certainly a competitive market/industry.
Some would argue that what gave rise to online loan apps is majorly due to the inability of the major commercial banks to provide easy, affordable loan products to their customers. This significant gap in the market is now being filled by lots of loan apps, a significant portion of which is provided by microfinance banks.
Microfinance Banks that Offer Instant Loans online
While we may not be able to give an exhaustive list of all microfinance bank loans in Nigeria we will highlight the major ones.
- Accion Microfinance: Accion offers quick online loans through its web and mobile apps up to N150,000.
- FairMoney: FairMoney Microfinance bank has a pretty decent mobile app through which customers/users can access loans. Customers can access personal loans of between N1,500 – N5m according to the information on their website. The FairMoney loan app is available on Playstore.
- Renmoney Microfinance Bank: Renmoney, with apps on both the playstore and the apple store, provides personal and business loans. For personal loans it says borrowers can borrow up to N6m while it can lend up to N15m for business loans with up to 24 months tenure
- Carbon Microfinance Bank: Carbon is one of the well known online lenders and changed its name from the previous – Paylater. Now a microfinance bank offering an array of financial services, online loans remain a key part of its offerings. It offers personal and SME loans. For it’s personal loans it can give the borrower up to N1m. For its’ business loan it may give up to N20m for borrowing businesses that meet its requirements.
- Primera Microfinance Bank: Primera is another microfinance bank that offers customers the opportunity to apply for and access loans through online channels. They provide payroll loans, small business loans, and agric loans.
- CIT Microfinance Bank: CIT microfinance bank offers personal and business loans through its online channels (app and website). Their loans include the CIT Instant cash, CIT salary advance, CIT SME loan etc.
- Mutual Trust Microfinance Bank: Mutual Trust has its mobile app available on the playstore and offers online loans eg the 10 hour prompt loan (for federal civil servants), and Mutual plus loans (for private sector employees).
- VFD Microfinance Bank: VFD through its Vbank mobile app (available on the App store and Playstore) offers loans to salary earners and entrepreneurs.
- AB Microfinance Bank: The bank offers micro loans and SME loans via its internet banking channels. Customers/users can request/apply for loan on their website or through the mobile app (on playstore and app store).
These are some of the microfinance banks that offer instant online loans (either through their apps or via their websites).