Here are banks that offer loans without collateral

Some Nigerian Deposit Money Banks (DMBs) are pushing for unsecured lending, a loan that does not require collateral.

Some Nigerian Deposit Money Banks (DMBs) are pushing for unsecured lending, a loan that does not require collateral, as demand rises among small and medium enterprises (SMEs) and households.

As seen in the latest data from the Central Bank of Nigeria (CBN), demand for unsecured lending has been on the rise but lower than the demand in the pre-COVID-19 years.

The CBN’s latest consumer credit report shows that demand for unsecured credit cards lending rose to 9.4 index points in the fourth quarter (Q4) of 2020 from 4.9 points in the first quarter of the same year.

BusinessDay’s visit to some agency banking operators reveals that one of their challenges is on how to get loans without interest to expand their businesses.

“If we can get cash in terms of non-interest loans from the bank, it will help me to meet the rising demand for cash by my customers,” a woman (Mrs Lawal) who sells drinks in addition to PoS operations, told BusinessDay on Tuesday.

However, here are some of the banks that offer loans without collateral as seen in their websites. They include Access Bank, which offers up to N10 million without collateral to SMEs; Fidelity Bank (N10m), First Bank (N10m), GTBank (N30m), Polaris Bank (N10m), Standard Chartered Bank (N20m), Union Bank (N50m), and Zenith Bank (N10m), among others.

“Whether you are a school owner, a health practitioner or you are into IT, or any other business you can access up to N10 million without collateral,” according to the banks.

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Standard Chartered Bank recently launched a product known as Smart Business Loan (SBL), a non-secured lending product, targeted at supporting the growth of SMEs, David Idoru, head, consumer, private and business banking, noted.

“At Union Bank, we support your whole value chain of suppliers and buyers with short-term loans for SMEs that are key and sub-distributors,” the bank stated.

Union Bank offers Cash Flow Lending, which is a working capital to help meet short-term business needs of customers. Its features include no collateral required, affordable interest rate, maximum tenor of 12 months, maximum loan amount of N10 million.

The bank also offers invoice discounting Finance Quick cash flow for businesses, featuring no collateral, affordable interest rate, and maximum amount of N50 million.

Z-Woman is Zenith Bank’s (N10m) single-digit loan product for female-owned businesses for all sectors primarily geared toward growing the SME sub-sector and diversifying its customer base.

The loan is for female-owned businesses with shareholding of 50 percent or any majority shareholding provided it is owned by a woman.

According to the CBN’s latest data, availability of unsecured credit provided to households increased in Q4 ‘2020 and is expected to increase in Q1 ‘2021. Improving economic outlook and increased market share objective were contributory factors for the increase.

As lenders resolve to tighten the credit scoring criterion for total unsecured loan applications in Q4 ‘2020, the proportion of approved total loan applications for households increased. Lenders expect to also tighten the credit scoring criteria in Q1 2021 and anticipate that the proportion of approved loan applications will also increase.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.