What are the major Banks in Nigeria?
Nigeria's banking sector is one of the biggest industries in Nigeria managing about 30 million bank accounts currently. The Central Bank of Nigeria counts 21 operating commercial banks in total that have evolved out of the banking consolidation in 2005. Those banks are also called retails banks due to their broad portfolio of offline branches. Providing bank loans to its customers is one of their main products. Below you find more information about bank loans and how to get one.
The biggest banks in Nigeria are First Bank of Nigeria (FBN), Zenith Bank, United Bank of Africa (UBA), Access Bank, Guaranty Trust Bank (GT Bank), Ecobank and Diamond Bank, while 9 Nigerian banks in total made it into the top 1000 global banks. All of those banks have a diversified branch network, e.g. Zenith Banks operates 350 branches across Nigeria, making it easy for Nigerians to access a bank facility.
What kind of Loans do Banks offer?
Banks offer a great variety of Bank Loan products to both, individuals and corporate clients. The most popular products for individuals are personal bank loans without collateral, school fee bank loans, or mortgages. The personal bank loan can be basically be used for anything, while the most common usage is to pay rent upfront, buy expensive household equipment, or to pay expensive medical bills. The mortgage is also called personal home loan and comes with the property as collateral. Corporate clients can choose among business loans, SME bank loans, car loans, and many tailored bank loans for investment purposes. One useful bank loan product are secured overdrafts, which can be used to provide bank account overdraft solutions for companies.
What are the requirements for a Bank Loan?
First of all, you need to have a bank account at the bank you are applying for. Sometimes banks demand that you are a customer for certain period of time already, so that the bank can analyze your spending behavior, which is part of the credit assessment. Traditional banks are very risk averse, which means they are very selective when it comes to the decision of giving you a bank loan or not. Such financial institutions would require loan applicants to meet a lot of requirements, before granting a loan. For example, some banks would need you to be employed by a company, which is well-known for paying salaries and has a solid financial background. Thus, getting a loan from a traditional bank is only applicable for a limited amount of Nigerians.
How to apply for a Bank Loan?
You can apply for a bank loan in Nigeria in two different ways. Firstly, you can go to your bank branch and apply for your loan within the branch. The bank employees will give you the application documents that you can fill-out and submit directly in the bank branch. The required additional documents (e.g. ID, letter of employment, Utility bill, etc.) can be handed in any time thereafter, so its up to you how fast the loan application will last. The second application option is online, which is only offered by a few banks in Nigeria. After submitting your loan application online, the process is similar to the one described above. You need to submit the documents in the bank branch. In any case, the bank officer will calculate the bank loan interest rate based on risk profile. At the end, when you have been approved for a loan, you can decide whether you want to take the loan or not.
Is a Bank Loan the right choice for me?
It is always important to compare all your options. TopCheck, for instance, offers you a fast, easy and free loan comparison, which allows you to apply directly online for the respective loan provider. In general, banks only give loans to a small minority of Nigerians, namely the upper- and middle class. In case you have a smaller salary, a loan from a microfinance bank or a private money lender would be more efficient.
Example Loan: ₦500,000 Loan amount, 1-12 months duration, 2.83% monthly interest rate, 37.61% max APR, ₦688,050 total value, ₦57,338 max monthly repayment, RenMoney MfB