Nigerians are turning to loan apps to cope with the challenge of rising food inflation.
Business Day reports that a study by SBM Intelligence found that 27 per cent of Nigerians across different income categories now resort to loan apps to keep up with their living expenses in the wake of record inflation.
Amina Abubakar, a mother of three residing in Lagos, shared her experience: “With the prices of food items rising so rapidly, my family has been struggling to keep up. I had no choice but to resort to these loan apps to put food on the table. It’s not ideal, but it’s the only option that we have right now.
“Early last year I could conveniently buy a loaf of bread and a derica of rice for a little over N1,000, but presently, just a derica of rice costs N1,000. Now we eat more beans because it is cheaper, but cook it on a charcoal stove to save gas.”
The surge in demand for these loan apps indicates the severe impact of the unyielding inflationary pressures on the daily lives of Nigerians, especially those already grappling with limited financial resources.
According to Adedeji Olowe, CEO of Lendsqr, a startup that helps credit companies recoup their loans and avoid default, minimal lending activities are happening on the side of the fintech.
“The lenders are aware that nearly all the requests for loans are going to be deployed into consumption; hence, the high risk of massive default is scaring them away from giving out loans to users,” he said.
According to recent data from the National Bureau of Statistics, the food inflation rate rose to 30.64 per cent in September, the highest in 18 years, from 29.34 per cent in August, leaving many households nationwide groaning under the burden of exorbitant food prices.
Salami Ogunyinka, who operates a lending company in Ibadan, Oyo state, said: “Truth is there has always been a rise in loan demands as our loan officers have constantly in the last two months been telling us about the demands.
“They, however, cautioned that we should not go with the flow as it might be quite difficult to retrieve.”
He described the floating of the naira as a significant contributor to the demand for loans. According to him, every time there is a remarkable increase in the dollar rate, there is an increase in demand because.
