The National Bureau of Statistics has disclosed that in 2020, Microfinance Banks in Nigeria recorded an 82% boost in lending as it rose from N300.2 billion in 2019 to N546.6 billion in 2020.
In their latest data, the NBS said as of 2018, total microfinance loans to the private sector was just N250 billion.
This has now doubled in two years due to improved technology, easier processing of loans, better loan recovery methods, increased competition, and a growing class of employees with an appetite for short-term credit.
This has been confirmed as the fastest-growing credit segment in the financial lending space.
Microfinance banks have led the charge on consumer loans in the last three years, extending credit to the risky retail end of the market which has, for years, been ignored by commercial banks.
According to reports, requests for loans increased while the Covid-19 lockdowns lasted as workers sought for alternative funding to meet immediate expenditure.
This is with the borrowings occuring over the use of mobile phones or simple email exchanges between borrowers and their microfinance banks.
