By Femi Adeoya
For most people to make it big as entrepreneurs and for most small and medium scale businesses (SMEs), starting a business and ultimately expanding the business either in Nigeria or elsewhere, there is usually a need to get funding loans from banks.
Banks often evaluate risk, collateral, and reputation of the borrower, past payment history, availability of capital, and the amount of time required to complete and manage the transaction. Modern lenders simply sum these up as the 3 Cs of credit: Credit, Collateral, and Character.
In the past, commercial banks in Nigeria were quite supportive of business funding. With your basic business plan, collateral security and bank statements to support your turnover requirement for the loan, cash flow statement to determine liquidity and feasibility studies to determine viability of the business, it was almost certain you would get your loan request approved.
However, obtaining loans in the last four years from any Nigerian bank – especially by (SMEs) – has become very difficult, if not impossible. Many people with viable ideas to start a business have been unable to do so due to lack of capital. And many businesses have been unable to expand for lack of support from banks.
Fortunately, many microfinance banks have come to the rescue of SMEs and have been able to provide short term loans (12 months and below) to small business owners and salary advance to salary earners. Most of the time, with a relatively good credit rating with or without collateral security, businesses and individuals are able to access these loans within a short period. Even though the interest rates are much higher, the timing and processes are more simplified.
One of such fast-growing microfinance banks in Nigeria is RenMoney.
Established in 2012 as RenCredit MFB Limited, its expertise lies in the provision of simple money solutions. In December 2013, RenCredit MFB Limited was re-branded to RenMoney MFB Limited – the name by which it is now known.
The company operates under a microfinance banking license in Lagos, Nigeria, providing loans to individuals and small businesses. Applications are usually done directly either through their website, contact centre, agent network and branches all over Lagos.
RenMoney is Regulated by the CBN and insured by the NDIC, and also offers market leading rates on Fixed Deposits and Savings accounts.
The microfinance bank says it has given out over 200,000 loans (to the tune of N50bn) to individuals and small businesses in Nigeria ranging from N50,000 to N4,000,000. It says if all documentation is ready and submitted, it can execute loan processing in less than 24 hours.
The loan works through a 3-pronged process:
– Completion of online form
– Uploading of Government approved ID + other documents
– Receipt of money within 24hours; if approved.
RenMoney repayments are flexible and usually spread over 12 months. The loan processes purportedly require no collateral or guarantor.
However, feedback and comments from customers and end users who have applied for their loan suggest that some of these attractive features of the loan may not be altogether as said. It also seems that the organization has not been able to match the flurry of loan requests received – as a result of their massive publicity – with output, and many customers have complaints about the slow processes of their loans. In some cases, customers believe the bank is not genuine.
Chigozie Aguolu a young Nigerian based in Lagos says RenMoney delays credit and their advertisement does not reflect their true position, as their 24-hour claim of ‘closing your loan request’ is sadly untrue.
Hear him: “They claim you get your credit alert on or before 24hours, it’s just not true, the customer service is just inconsiderate, and in some cases ill-mannered. They have no respect for client time, and they just switch off once the loan has been applied for and the payment mandate is placed on your account. Credit doesn’t come within 24hours as they advertise and their interest rates are high. I still have an uncredited loan as we speak, with a payment mandate on my account.”
Ezenwoke, however, believes RenMoney still gives quick and easy loans when you need it. He says he is recommending the organization to every Nigerian needing a quick loan.
Ojulari Moshood says loan request processing from RenMoney is real and true and quite helpful but their processes are too slow, taking hours and even days!
In his words: “Even though getting a loan from you guys saves lives and all, your loan processing is way too slow. I mean, what is the purpose of getting a loan when it will be ready after the purpose of the loan is gone.”
RenMoney head office is located at 89 Awolowo Road, Ikoyi, Lagos. They also have offices in Surulere, Opebi, and Okota.