Banking

CBN Issues Licences to 5 New Banks to Boost Lending

Published

7 years ago

30/04/2019

By Dipo Olowookere

Five new banks have been issued operating licences by the Central Bank of Nigeria (CBN) to carry out financial services in the country, Business Day is reporting.

Relying on information from those allegedly familiar with the development, the reputable business journal said one of the new banks may commence operations this week.

However, it said most of the lenders are planning to kick off banking operations in the country before August 2019.

One of the new banks, “Globus” is said to be spearheaded by Elias Igbinakenzua, a former Executive Director at a tier one bank.

Business Post reports that in late 2016, Mr Elias Igbinakenzua resigned from Access Bank and in 2017, he became the CEO of First Aluminium Nigeria Plc.

“The Bank (Globus), whose head office is on Sanusi Fafunwa, Victoria Island, may open by May 2nd,” one of the sources quoted by Business Day said.

The second bank would go by the name “Titan” and is said to have secured the services of a former Heritage bank executive director.

Another owner of one of the new banks is said to be Indian – the former owner of Chi Limited who recently sold a majority stake to Coca Cola – and the initial strategy would be to target large Indian and Lebanese clients with investments in Nigeria especially in the manufacturing and other sectors, sources said.

The other banks remain largely anonymous but would be a mix of micro-finance, Merchant and/or deposit money banks, Business Day added.

It was reported that the apex bank is being driven by the need to attract new investments into the sector and serve the country’s over 50 million unbanked and under-banked people, even as current banks have struggled to grow loan books since an economic slump in 2016 caused bad loans to surge.

CBN spokesperson, Mr Isaac Okorafor, did not respond to calls seeking comment.

Also, three bank CEOs declined to comment, as the CBN is yet to go public on the matter.

BusinessDay gathered from sources that most of the capital needed to set up the banks were sourced locally in Nigeria.

The minimum capital requirement for a Regional bank is N10 billion, while for National banks its N25 billion and international Banks N50 billion, according to the Banks and Other Financial Institutions Act (BOFIA).

The capital requirement of microfinance banks, which was amended by the CBN in 2018, is as follows: For a Unit Microfinance bank, the requirement is N200 million, while its N1 billion and N5 billion for a State and National Microfinance bank respectively.

For a merchant bank, the minimum paid-up share capital is currently N15 billion.

Attempting to place a finger on the motivation for licensing five new banks almost out of the blue, one of the sources said, “The CBN will not want to preside over an industry that is shrinking.”

Another said “Nigeria is under-banked and investors are responding, if the CBN wants to grow credit, by N1 trillion, none of the old banks can take it. Banks available are already at capacity, in one way or another.”

The CBN has been somewhat desperate for banks to increase lending to critical sectors but an economy fraught with risks has tamed lending appetite.

Nigerian banks were unable to grow their loan books in the past year, a signal that the macroeconomic environment remains weak and non-supportive for growth.

The 12 largest lenders quoted on the floor of the Nigerian Stock Exchange (NSE) saw combined loans and advances dip by 6.37 percent to N12.34 trillion in December 2018, from N13.18 trillion a year earlier. This compares with a 25.14 percent increase between the 2013 and 2014 financial year.

The CBN is worried about the trend, Governor Godwin Emefiele indicated in the aftermath of the monetary policy committee last March.

To encourage lending to the real sector, the CBN promised to allow banks draw down from their regulatory cash buffers sitting with the apex bank, if the banks gave loans to manufacturers and players in the agriculture sector at single-digit interest rates.

The response has been largely underwhelming, with banks preferring instead to stash cash in double-digit yielding government debt where they take considerably less risk. Even the CBN’s surprise interest rate cut to 13.5 percent after keeping it at 14 percent for over two years, was not able to move the needle on lending.

The banks argue that to increase lending the CBN should instead reduce the Cash Reserve Ratio (CRR) to free up idle funds. The effective CRR in the sector is as high as 40 percent.

Licensing five new banks can pass for the latest strategy by the CBN to boost bank lending, according to a source.

“However, if the problems that hinder the current banks from growing their loan books persist, then even the new ones will struggle,” the third source said.

Total credit to the private sector grew by a meagre 2.2 percent to N24.16 trillion, according to the CBN’s Depository Corporation survey report for February 2019, another indication of weak credit flow in the economy.

Johnson Chukwu, managing director and CEO of advisory firm, Cowry Asset Management Ltd, said the expansion in credit has been going to the public sector as yields remain attractive at between 13 and 14 percent. “The economic recovery rate has been slow and financial institutions

are cautious of booking new Non Performing Loans (NPLs),” said Chukwu.

Sources tell BusinessDay that the CBN feels that some of the current banks may be becoming a little bit removed from the needs of the average customer.

“The banking public has very few options. The bigger the bank the more distant the relationship. There is at worst an oligopoly and at best a duopoly,” the first source said.

BusinessDay learnt that the licensing is a done deal according to the processes involved which may take up to 2 years. This includes sending the name of directors to the Department of State Security

(DSS), Assistant General Manager’s and above being vetted by CBN, offices and branches inspection, staff recruitment, printing of checks and software deployment.

The emergence of the new banks is good for staff, good for signalling and will increase competition in the sector our sources said.

“When you realize CBN will not allow any bank to fail, you realize there is nothing to fear. You can go ahead and request a license,” the second source said.

Banking

How to Get a Quick Loan in Nigeria With No Collateral

Published

1 day ago

23/06/2026

Dipo Olowookere

Needing money fast is a common problem in Nigeria. Rent is due, or a small business runs short on stock money before the next sale. In the past, getting a loan from a bank meant paperwork, a guarantor, and sometimes property as collateral. That process could take weeks. Today, things have changed. Several licensed digital lenders in Nigeria now offer personal loans without collateral, and the entire process can be completed from a phone in under an hour.

This article explains how no collateral loans work in Nigeria, what lenders actually check before approving you, and how to avoid the mistakes that get loan applications rejected or, worse, land borrowers with apps that are not properly registered.

What “No Collateral” Really Means

A collateral loan asks you to pledge something of value, like land, a car, or a fixed deposit, as security. If you fail to repay, the lender has a legal right to seize that asset. Most working Nigerians do not have assets like this sitting idle, which is exactly why no collateral loans exist.

Instead of asking for property, digital lenders look at other signals to judge whether you can repay:

Your Bank Verification Number (BVN) or National Identification Number (NIN), used to confirm your identity
Your bank account history, which shows whether money moves in and out regularly
Your mobile money or airtime usage in some cases, which hints at your financial activity
Your repayment history with other lenders, if you have borrowed digitally before

This is why an app like LendSafe can approve a loan in minutes. There is no waiting for a bank manager to review your file. The decision is based on data you provide once, during registration.

Steps to Get a Quick Loan Without Collateral

The process is fairly similar across most reputable Nigerian loan apps, though the details differ slightly.

Download a licensed loan app: Always check that the app is registered with the Federal Competition and Consumer Protection Commission (FCCPC) before installing it. Unregistered apps are the ones most often linked to harassment and hidden charges.
Register with your phone number and basic details: Most apps ask for your name, phone number, and BVN or NIN to verify who you are.
Answer a few simple questions: This usually covers your employment status, income range, and sometimes your address.
Wait for your credit limit: Based on the information provided, the app calculates how much you qualify to borrow. This step typically takes a few minutes.
Choose your loan amount and repayment plan: Pick an amount you are confident you can repay on time, not the maximum offered.
Receive the funds: Once approved, money is sent directly to your bank account, often within minutes.

What to Check Before You Borrow

Before accepting any loan offer, confirm the following:

The interest rate and total repayment amount: A lender should show you exactly how much you will repay, not just how much you will receive.
The repayment date and any penalty for late payment: Missing a date by accident should not lead to extreme charges.
The lender’s registration status: Reputable lenders, such as those operating under the FCCPC’s Digital, Electronic, Online and Non-Traditional Consumer Lending Regulations, are required to disclose their licensing details. If an app cannot show this, treat it as a warning sign.
What permissions the app is requesting: A lender does not need access to your entire photo gallery or contact list to process a personal loan. Be cautious of apps that ask for more access than necessary.

Why ‘No Collateral’ Does Not Mean No Responsibility

Some borrowers assume that because no asset is on the line, a missed payment carries no real consequence. This is not true. Digital lenders report repayment behaviour to credit bureaus in Nigeria, including CRC Credit Bureau and CreditRegistry. A pattern of late or missed payments can affect your ability to borrow in the future, even from a different lender entirely.

The safest approach is to borrow only what you need and only when you are sure of your repayment date. A loan app should support a short-term need, not become a constant source of stress.

Conclusion

No collateral loans have made it possible for ordinary Nigerians, salaried or self-employed, to access quick cash without the long process traditional banks require. The key is choosing a lender that is properly licensed, transparent about costs, and respectful of your data and privacy. Apps that are upfront about their fees and regulatory status, like LendSafe by SmartLoans, are generally a safer place to start than apps with no clear company information behind them.

Before your next financial emergency arrives, it is worth knowing which licensed apps you can trust and how the no-collateral process actually works. That knowledge alone can save you from a costly mistake.

Banking

Paystack Rolls Out Small Business Programme with Funding, Growth Support

Published

2 days ago

22/06/2026

Adedapo Adesanya

By Adedapo Adesanya

African payments technology giant, Paystack, has launched the Paystack Small Business Programme to support Nigerian small businesses through a range of initiatives designed to help them grow, connect with relevant opportunities, and access funding for their next stage of growth.

The initiative will support businesses as they start, manage and grow their operations, starting with the Paystack Small Business Bundle.

The bundle gives eligible Nigerian merchants access to up to N4 million in discounts on tools and services from selected partners across key areas of business operations, including commerce, bookkeeping, logistics, design, workspace, customer communication, and digital tools.

In the pilot phase, Paystack is targeting 2,000 Nigerian SMBs for the Small Business Bundle, with additional partner offers expected over time.

According to the company, in a statement on Monday, small businesses play a significant role in Nigeria’s economy, but many still face everyday operational challenges, from managing sales and records, reaching customers, handling deliveries, and accessing affordable tools.

As a result, the programme has been developed to provide practical support for these businesses as they manage daily operations and plan for their next stage of growth. Through the Small Business bundle, eligible merchants can access offers from partners including Bumpa, Ijeworks, Wiicreate, Flowcart, Simplebks, Africaworks, Paystack, Kindlybook, FezDelivery, Gamp, Pressone, Mercurie, Shuttlers and Canva.

The Paystack Small Business Programme will commence with three key initiatives designed to support the growth and sustainability of small businesses. These include the Paystack Small Business Bundle, which offers a range of tools, services, resources, and partner benefits to help businesses operate more efficiently and scale sustainably; the Paystack Small Business Launchpad, which provides dedicated, hands-on support to high-potential businesses, enabling them to maximize the value of Paystack’s solutions and accelerate growth; and the Paystack Small Business Grant, which offers financial support to promising businesses to help fund their next phase of expansion and development.

The Bundle is available to eligible Nigerian merchants with a live Paystack account, at least 10 Paystack transactions in the last 30 days, and operations in Nigeria.

Eligible merchants can visit the Small Business Bundle Page to browse available partner offers, submit their business details and receive redemption instructions once their eligibility has been confirmed.

Banking

Why Access to Structured Merchant Financing Matters for SME Growth

Published

2 days ago

22/06/2026

Business Post Contributor

By Seun Oyediran

The Nigerian economic landscape is defined by the resilience of its micro, small, and medium-sized enterprises (SMEs). From the high-traffic supermarkets of Lagos to the critical distribution hubs supporting the hinterlands, millions of entrepreneurs drive our domestic commerce. Yet, a recurring theme persists in our boardroom discussions and macroeconomic reviews: the “missing middle.” While demand remains robust across various sectors, limited access to financing remains one of the several constraints affecting SME growth, effectively putting a limit on how much the country’s economy can grow.

The data provided by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) is unequivocal. SMEs constitute approximately 96% of all domestic businesses, contributing nearly 50% of the national GDP and employing over 80% of the workforce. They are not merely a segment of the economy; they are the economy. However, the International Finance Corporation (IFC) continues to highlight a staggering credit gap. This structural bottleneck means that even businesses with proven product-market fit are often unable to fulfill orders, optimize inventory, or expand their footprint, simply because traditional capital remains inaccessible.

Merchant credit represents one financing option available to support working capital and inventory management needs. Unlike the rigid structures of traditional commercial lending, merchant credit is purpose-built for the velocity of trade. By injecting capital directly at the point of need, specifically for inventory replenishment, business expansion and equipment acquisition, it may help address short-term liquidity requirements for eligible businesses. For a merchant, the inability to stock goods is not just a missed sale; it is a loss of market share and a regression in cash flow momentum. Merchant credit may help eligible businesses address short-term liquidity constraints and support inventory management.

From a risk management and credit perspective, the evolution of digital financial services has revolutionised how we view SME creditworthiness. Historically, the absence of collateral or formal credit histories led to the systemic exclusion of many viable businesses. A data-driven approach shifts the focus from static assets to dynamic performance, enabling lenders to deploy capital into businesses demonstrating sustainable operational performance.

The macroeconomic implications of optimising merchant credit are profound. Access to appropriately structured financing may contribute to broader economic activity, employment, and business expansion. In the context of Nigeria’s urgent need to diversify away from hydrocarbon dependence, the private sector, and SMEs in particular, must remain an important contributor to economic development. To build globally competitive brands and export-led enterprises, we must move beyond the rhetoric of “supporting” small businesses and transition toward integrating them into modern credit value chains.

The strategic imperative is clear. The chasm between a local business and a regional champion is rarely a lack of ambition; it is access to capital that remains a significant constraint for many businesses. If we are to foster a new generation of African industry leaders, we must prioritise the deployment of flexible, data-driven financing solutions. When responsibly structured and appropriately deployed, merchant credit can support business growth, inventory management, and operational continuity for eligible enterprises.

Seun Oyediran, Director, Merchant Lending