In a strategic move aimed at making major inroads into Nigeria’s competitive but lucrative retail end of lending, Standard Chartered Nigeria Plc, has crashed its interest rate for ‘personal overdraft’ from 1.25 per cent to 1 per cent per month.
The retail end which includes divisions such as personal loans, payday loans is highly competitive with Fintechs, and other banks all jostling for the same market.
This latest decision by the bank makes it rate one of the lowest in Nigeria’s lending space, especially when compared to other players in the industry.
According to Standard Chartered, Personal Overdraft facility provided by Standard Chartered Plc is a revolving facility targeted at salaried customers with 12 months tenor and usually based on 50 per cent of the net monthly salary of customers.
A minimum salary qualification of N50, 000 is specified.
Despite efforts by some of the banks to restructure their loan books due to the adverse effect of the pandemic, banking sector credit to the private sector improved to N19 trillion in the third quarter of 2020 representing a 15.6 per cent increase from 2019.
According to a CBN survey on credit conditions, the supply of secured and unsecured credits to households is expected to increase in the first quarter of 2021, having recorded an increase in the previous quarter (Q4 2020).
Meanwhile, a cursory review of lending data on the websites of some sampled financial institutions revealed that some financial institutions retained or downwardly reviewed their monthly interest rate on payday loans.
For example, GT Bank Quick credit crashed its rate from 1.75 per cent to 1.33 per cent.
Furthermore, UBA Click credit maintained its 1.58 per cent charge, Zenith Bank term loan remained at 2.16 per cent, Renmoney retained its 2.98 per cent interest rate, and a host of others.
