Nigeria’s Fidelity Bank Turns to Digital Lending to Boost Growth

LAGOS (Capital Martkets in Africa) – Nigeria’s Fidelity Bank Plc is seeking to boost customer numbers by 20% this year by pushing its digital channels and offering loans to low-income borrowers via their mobile phones.

The bank hopes to increase its clients from 4.5 million in 2018 and expects return on equity to rise to 13% from 11.8%, Executive Director Gbolahan Joshua said in an interview. More than 150,000 customers have applied for digital loans since it started providing them in March.

Fidelity also plans to launch at least three more digital loan products this year, targeting middle-and-high income Nigerians, in partnership with financial-technology firms, he said.

Lenders in Africa’s most populous nation are exploring new ways to attract customers and increase retail banking as lower oil prices weigh on the economy and hurt corporate borrowers. At the same time, mobile-phone penetration is increasing with 174 million users in February out of a population of almost 200 million, according to the Nigerian Communication Commission.

The bank hopes that retail loans will make up as much as 6% of its loan book this year, up from less than 3.8% in 2018, Joshua said.

Access Bank Plc started providing digital loans for account holders last year. The value of these loans soared to 30.5 billion naira ($85 million) from 2.4 billion naira a year earlier, and are expected to grow more this year, according to its website. The loans, which don’t require paperwork, collateral or guarantor are accessed by customers via their mobile phones and can be approved within minutes.

Source: Bloomberg Business News