Debit to Credit: How to buy now and pay later.
Good day,
Today we will be talking about Credit! One of the biggest challenges people like you and me face daily is having enough money to get through the day.
The Nigerian National Bureau of Statistics stated that in 2020 83 million Nigerians lived in poverty. Although Nigeria's poverty profile for 2021 has not yet been released, it is estimated that the number of poor people will increase to 90 million, or 45% of the population, in 2022. Nigeria's poverty profile is horrific.
With such a large number of poor people and higher potential for increased poverty, it is difficult to understand why the government has not invested in building a credit infrastructure.
Think of credit infrastructure as the engine of the financial system that allows individuals to borrow money easily while enabling the lender to be assured that the person has the capacity to pay back.
Due to the lack of credit infrastructure, most lenders do not have enough information to determine an individual’s capacity to pay back. These lenders mostly make bets on borrowers-- in most cases they ask for collateral and hope they pay back. This is why most banks peg interest rates very high, this is to discourage individuals who do not have the capacity to pay back from borrowing money at all.
Luckily with the FinTech boom, everything is changing, digital lenders have discovered that with just the right amount of information, you can lend money to an individual in line with their capacity to pay back. But not all digital lenders are taking the right approach to lending, a prime example is Sokoloan, the company was fined by the National Information Technology Development Agency (NITDA) for invading the privacy of an individual that the company lent money to, according to the complaints.
“When he failed to meet up with his repayment obligations due to insufficient credit in his account on the date the direct debit was to take effect, the company unilaterally sent privacy-invading messages to the complainant’s contacts,”
This is clearly an abuse of the Nigerian Data Protection Guidelines, so if this has happened to you, you should probably call a lawyer.
If you wake up and decide to start lending money tomorrow, instead of doing what Sokoloan did, you can leverage on existing technology, since the government has not invested in building credit infrastructure, entrepreneurs built a number of solutions for themselves, today we will be talking about one of them and it’s called Mono.
Mono is a company that provides APIs and tools that enable lenders to collect a borrowers financial information and use that information as the basis for deciding whether to lend or not. Lenders can now make informed lending decisions.
In our usual fashion, this is the point where we recommend the best credit products on the Nigerian Market, brace yourself.
CDcare
CDcare is basically a marketplace that allows an individual to pay an equal amount weekly or monthly towards buying an item over a given period of time. When up to half of the item's cost has been paid at the middle of the instalment period, the item is shipped to you. The instalments payments continue until full payment is made.
So you can start paying for that MacBook you want in bits, till you pay halfway. The barrier of not having enough money is eliminated by their flexible plans.
Kuda Overdraft.
If you use Kuda Bank, then this is probably not the first time you have heard about Kuda Overdraft. An overdraft is basically a short-term cover to help you keep your life running smoothly.
If your Spend account balance is ever too low for comfort, you can always take some money from your Borrow account to cover your expenses and pay back whenever you get paid.
How can you get an overdraft? If you use Kuda actively as your main bank account, you're automatically qualified to get an overdraft.
Personally, Kuda’s overdraft has saved my life many times. If you have been looking for a sign to switch to Kuda Bank, this is it.
Credpal
With Credpal you, no longer have to wait for payday to get the things that matter. CredPal Credit Cards make it easier to pay for your needs anytime. Stop putting your needs on hold.
Carbon
Carbon grants it’s users instant loans at zero interest, and reinforces prompt repayment by allowing the user unlock higher amounts.
“We reward you for keeping up your end of the deal. You get up to 100% cashback on the interest paid on all your 7 - 30-day loans, once you repay on time.”
“I found out about Carbon in 2018, on Twitter or somewhere on social media. It was this app where you could sign up and get instant loans. I tried it and it worked. Subsequently, when I needed a quick loan I knew I could always go to Carbon”
- Leonard U
We hope our recommendations impact your daily life in a positive way. Not having enough money to satisfy immediate needs is a terrible thing, and you deserve the opportunity to have a life jacket.
We know there has been a bit of radio silence from us, this was due to all the cool stuff we have been planning for you.
In the next newsletter we will be introducing an interview series called
Tech to Wealth
We will be interviewing founders who are building products that can help improve your personal finance, in our first segment we will be interviewing a founder that is literally helping people “buy the dip” with a product called Accrue.
If you have any further questions, please feel free to reply to this mail or comment on Substack.
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This week I am reading.
A beginner’s guide to DAOs by Linda Xie https://linda.mirror.xyz/Vh8K4leCGEO06_qSGx-vS5lvgUqhqkCz9ut81WwCP2o
The Story Behind Nerve, Kuda’s Custom Core Banking App - https://kudabank.medium.com/the-story-behind-nerve-kudas-custom-core-banking-app-10d2301f2f4f
A beginners guide to trading crypto safely