Economy
Rising Prominence of Payroll Lending Activities in Nigeria
By Agusto & Co
Prior to the emergence of core payday lenders in the country, commercial banks dominated the financial services sector, providing loan facilities and savings to corporate clients and to a significantly lesser extent, retail customers.
Retail financial services offered were primarily tailored to the upper tiers of the country’s income categories, focusing on high net worth individuals and high earning employees of prominent organisations in the country.
Although alternative lenders such as community banks and credit unions existed, these organisations were often left to operate in the periphery due to the dominance of commercial (and merchant) banks.
In recognition of the dearth of financial services available to the impoverished and low-income earners, the Central Bank of Nigeria (CBN) over the last two decades made various attempts to enhance the delivery to financial services to the Nigerian populace.
Most prominently, the introduction of a microfinance policy in 2005 (and subsequent licensing of over 1,000 operators) was expected to fill the void created by commercial bank operators’ apathy towards individual lending. In spite of this, overall penetration remained low, attributable to inherent challenges including poor access to finance, weak risk management practices and poor understanding of microfinance banking.
As MFBs focused on the economically disadvantaged and low-income earners, the needs of formally employed individuals were largely unmet. Thus, many low to middle-income earners in active employment often sought loans from alternative channels such as family and friends, loan sharks and informal lenders.
Since the 2010s, payroll lending activities have grown in prominence mainly attributable to the unmet demand for small-sum short term credit by low to middle income individuals.
Borrowers often seek these loan facilities to pay recurring bills such as utilities and rent, as well as other expenses such as school fees, medical bills and other unexpected expenses that need to be settled before the next payday.
These loans typically attract high interest rates ranging from 3% to 6% a month, which reflect the risks associated with the average salary earner, as well as the absence of collateral requirements. Core players such as Renmoney, Credit Direct and Zedvance have grown business volumes over the last few years due to the overall gap in the supply of short-term microcredit.
In contrast to traditional lenders, industry operators provide customers with a quick and convenient process for obtaining loan facilities, with disbursement typically within 48 hours of submitting all required documents or the meeting of all conditions.
Unlike personal loans offered by major financial institutions in the country, payday loans are widely recognised for the absence of collateral (and in some cases, guarantor) requirements when granting loans to customers. Lenders typically use the customer’s wages as a basis for lending, with the loan repayment(s) typically a percentage of the borrower’s monthly salary/income.
In correspondence with the rising fortunes of the industry, intensifying competition amongst industry operators and external players, such as commercial banks and nano (micro) lenders, remains a threat to the retail dominance enjoyed by prominent industry operators.
Commercial banks are increasingly offering salary advances and quick credit facilities to individuals that may not typically meet the bank’s risk assessment criteria for traditional products. With a growing number of banks adjusting their respective business strategies to capture the retail segment, we expect competition to remain elevated going forward.
Overall, demand for payday loans should remain high, with a continued influx of new entrants seeking to provide services to the underserved market.
With the burgeoning impact of big data and AI-driven tools, digital financial solutions are expected to play a larger role within the Industry as current operators and new entrants seek to boost efficiency and improve service delivery amid the heightened competitive environment.
By Dipo Olowookere
The absence of a positive trigger left Nigerian stocks 0.38 per cent deeper in the bears’ territory on Friday, as investors embarked on cautious trading.
Two of the five major sectors tracked by Business Post finished in red on the last trading session of this week, with the industrial goods down by 2.44 per cent, and the energy down by 0.26 per cent due to profit-taking.
However, bargain-hunting raised the insurance sector by 1.52 per cent, the banking index increased by 0.79 per cent, and the consumer goods sector expanded by 0.28 per cent.
When the closing gong was struck yesterday, the All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited crashed by 741.04 points to 192,826.77 points from 193,567.81 points, and the market capitalisation lost N476 billion to close at N123.763 trillion compared with the previous day’s N124.239 trillion.
According to data from Customs Street, Mecure gave up 9.97 per cent to trade at N75.85, Meyer depreciated by 9.90 per cent to N18.65, DAAR Communications crumbled by 9.83 per cent to N2.11, Champion Breweries staggered by 6.49 per cent to N18.00, and Dangote Cement crashed by 6.09 per cent to N779.00.
Conversely, Sovereign Trust Insurance gained 9.95 per cent to settle at N2.21, RT Briscoe improved by 9.93 per cent to N12.51, NGX Group expanded by 9.78 per cent to N124.00, Ellah Lakes surged by 9.70 per cent to N13.00, and Omatek chalked up 9.70 per cent to sell for N2.60.
A total of 44 shares finished on the gainers’ chart during the session, while 25 shares ended on the losers’ table, representing a positive market breadth index and strong investor sentiment.
The activity chart showed that 823.8 million stocks valued at N34.8 billion exchanged hands in 63,759 deals during the session versus the 868.5 million stocks worth N31.5 billion traded in 69,310 deals on Thursday.
This indicated that the value of transactions increased by 10.48 per cent, the volume of trades declined by 5.15 per cent, and the number of deals dipped by 8.01 per cent.
The busiest equity on Friday was Fortis Global Insurance, which sold 146.6 million units for N137.3 million, Zenith Bank transacted 79.4 million units valued at N7.1 billion, Japaul exchanged 57.2 million units worth N225.1 million, Jaiz Bank traded 49.5 million units valued at N589.3 million, and Access Holdings exchanged 44.8 million units worth N1.2 billion.
By Adedapo Adesanya
Nigeria’s economy, measured by gross domestic product (GDP), grew by 4.07 per cent (year-on-year) in real terms in the fourth quarter (Q4) of 2025.
The National Bureau of Statistics (NBS) announced the development in its latest GDP report for Q4 2025 on Friday.
The latest figure represents an improvement over the 3.76 per cent growth recorded in the corresponding period of 2024, signalling sustained recovery across key sectors of the economy. The growth rate was faster than the third quarter’s 3.98 per cent.
The report confirmed that Nigeria’s oil sector grew 6.79 per cent year-on-year and the non-oil part of the economy expanded by 3.99 per cent.
Nigeria’s average daily oil production stood at 1.58 million barrels per day in the final three months of 2025. That was lower than the third quarter’s output of 1.64 million barrels per day but higher than the 1.54 million barrels per day in the fourth quarter of 2024.
Breakdown of the data showed that the agriculture sector grew by 4.00 per cent in the fourth quarter of 2025. This marks a significant increase compared to the 2.54 per cent growth recorded in the same quarter of 2024, reflecting improved output and resilience in the sector.
The industry sector also recorded a stronger performance during the period under review. It grew by 3.88 per cent year-on-year, up from 2.49 per cent posted in the fourth quarter of 2024. The improvement suggests enhanced activity in manufacturing, construction, and related industrial sub-sectors.
The services sector maintained its position as a major growth driver, expanding by 4.15 per cent in Q4 2025. However, this was slightly lower than the 4.75 per cent growth recorded in the corresponding quarter of the previous year.
Overall, the 4.07 per cent GDP growth in the final quarter of 2025 underscores broad-based expansion across agriculture, industry, and services, despite a marginal moderation in services growth.
The Q4 performance provides further evidence of strengthening economic momentum, with improvements recorded in both agriculture and industry compared to the previous year.
By Modupe Gbadeyanka
For the second time, Flour Mills of Nigeria Plc is sponsoring the Paris International Agricultural Show (PIAS) as part of its strategies to fortify its ties with France.
The 2026 PIAS kicked off on February 21 and will end on March 1, with about 607,503 visitors, nearly 4,000 animals, and over 1,000 exhibitors in attendance last year, and this year’s programme has already shown signs of being bigger and better.
The theme for this year’s event is Generations Solution. It is to foster knowledge transfer from younger generations and structure processes through which knowledge can be harnessed to drive technological advancement within the global agricultural sector.
In his address on the inaugural day of the Nigerian Pavilion on February 23, the Managing Director for FMN Agro and Director of Strategic Engagement/Stakeholder Relations, Mr Sadiq Usman, said, “At FMN, our mission is Feeding and Enriching Lives Every Day.
“This is a mandate we have fulfilled through decades of economic shifts, rooted in a culture of deep resilience and constant innovation. We support this pavilion because FMN recognises that the next frontier of global Agribusiness lies in high-level technical exchange.
“We thank the France-Nigeria Business Council (FNBC), the organisers of the PIAS, and our fellow members of the Nigerian Pavilion – Dangote, BUA, Zenith, Access, and our partners at Creativo El Matador and Soilless Farm Lab— we are exceedingly pleased to work to showcase the true face of Nigerian commerce.”
Speaking on the invaluable nature of the relationship between Nigeria and France, and the FMN’s commitment to process and product innovation, Mr John G. Coumantaros, stated, “The France – Nigeria relationship is a valuable partnership built on a shared value agenda that fosters remarkable Intercontinental trade growth.
“Also, as an organisation with over six decades of transformational footprint in Nigeria and progressively across the African Continent, FMN has been unwaveringly committed to product and process innovation.
“Therefore, our continuous partnership with France for the success of the Paris International Agricultural Show further buttresses the thriving relationship between both countries.”
PIAS is one of the most widely attended agricultural shows, with thousands of people from across the world in attendance.
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