United Bank of Africa Plc has launched a bold but “cautious” automatic lending program, which promises to intensify competition in the technology-driven lending space.
With its new model, the bank plans to increase the share of the consumer segment in the total loan portfolio beyond the current 25% and extend its grip on mortgages, automobiles, SMEs and insurance premiums.
Its new credit program is implemented as part of a mandate to reset the bank’s lending philosophy and leverage smart lending to drive Nigeria’s economic growth and impact people’s lives, Consumer loans group leader Anant Rao told reporters yesterday in a virtual meeting.
Rao said artificial intelligence (AI) and big data will play a major role in implementing the emerging lending model, processing, risk profiling, collection to collection.
He pointed out that credit to a low-risk person would be cheaper than others with high risk when the program takes full effect and the application of technology results in a lower interest rate in the long run.
A massive rollout of credit cards and secure cards, he said, would be at the heart of the new lending philosophy, adding that the bank “will use credit cards to track transaction patterns and consumer behavior. / expenses “of its customers.
“Customers can also borrow at the point of sale (PoS). We’re turning debit cards into credit cards… Customers could process and access credit in minutes; anyone with a mobile phone can borrow from UBA. We are ambitious but very careful and not reckless, ”he said, adding that data integrity, transparency and confidentiality would be essential to the bank’s smart credit.
At the heart of the bank’s credit culture is the 3-1-0 credit system. With that, Rao explained, UBA would only need four minutes to process loans and grant approvals.
He noted that the bank would build adequate infrastructure, including “by creating a credit bureau or working with an existing bureau”, to achieve its ambition to support the country’s economic growth by increasing access to credit.
According to him, increasing consumer credit implies a coherent engagement with customers to identify their challenges and innovate in support areas.
Rao said the bank will focus on “customer first principle, speed, technology and risk reduction” in its renewed drive to increase the country’s credit market, which he says is growing. very quickly.
“It is clear that credit is an economic stimulus and a major engine of growth. Credit has been largely inaccessible to the informal sector, which dominates African economies and is also home to SMEs which are the main engine of growth.
“Even for the formal sector that accesses credit, affordability remains a major issue. Convenience is the important element that brings credit to every individual’s doorstep through a robust infrastructure that makes credit information readily available and accessible to a credit provider, ”he said.
Regarding verification and evaluation, Rao, who worked for over a decade at Citibank Group before joining UBA, said Nigeria was going through a phase, noting that there had been an era where Indian banks performed a home appraisal.