Banks demand proof of steady income as firm observes 29% increase in loan requests

After the decision by the Central Bank Nigeria to allow Naira exchange rate to be market-driven, perceived by many as indirect depreciation, People are currently looking for money in order to finance their daily activities. This has led to a significant increase in Personal Loan requests since June 22nd 2016.

Nigeria’s leading comparison site for Loans TopCheck.com.ng, said it has noticed that demand for Cash Loans has increased by 29 per cent to a staggering 30,000 search requests in the two weeks after the devaluation of the Naira, showing that the weaker Naira has hit the Nigerian population hard.

People experience an increase in costs while salaries stay the same and unemployment rate increases, the company stated over the weekend.

“During the two months before the devaluation, when black market rates spiked, we already experienced an increase in Loan search volumes by roughly 10per cent, but since the devaluation the situation changed dramatically. We now see an increase in demand for Loans by an astonishing 29per cent daily,” says Christian Wiesner, co-Founder of TopCheck.com.ng.

“Our clients tell us that they cannot afford the way of living they used to have as prices of imported goods have exploded, even more than the change in exchange rate,” he revealed.

Floating exchange rate regime was adopted by the Central Bank of Nigeria (CBN) on June 22nd 2016 after the exchange rate had been fixed to the US Dollar for many years.

“People are currently looking for money in order to finance their daily activities. On TopCheck.com.ng we see a lot of demand for Loans for paying rent, starting own businesses or paying medical bills. Unfortunately, our partners, which are banks as well as microfinance institutions, demand proof of a steady income in order to get a loan, so many Loan requests cannot be fulfilled.

“We expect a further increase in Loan search requests on TopCheck over the next couple of months, because foreign investment in the country is just starting now. The devaluation was the first necessary step to create trust for foreign direct investment that creates new jobs and opportunities,” he said.

Due to the crash in global oil prices, the demand for Naira dropped significantly putting the currency under a lot of pressure.

As a consequence, the black market rate started to diverge from the official rate significantly, proving great business for black market traders. In February 2016, the black market rate peaked at N380, being nearly twice as high as the official rate at N197 – N199, while spot rate at the interbank market settled at an average of N280 to the Dollar.

Subsequently, imported goods and services became more expensive. Retailers increased prices, fuel prices went up due to deregulation and inflation is on its rise, hitting 15.6 per cent, the highest value in 6 years, as mentioned by the National Bureau of Statistics.

TopCheck.com.ng is Nigeria’s premier price comparison site for Insurance, Broadband Internet and Loans. People can compare prices and benefits of products for free and apply directly online. TopCheck.com.ng then forwards the application directly to the bank or insurance company.