Nigerian banks do not work for you. You work for them. You give them low-cost deposits, which they invest in secure government bonds and treasury bills. They give you a small cut of the returns and pocket the rest. That’s their business model, and it’s highly profitable.

There’s a reason Nigerian banks don’t give unsecured loans: our law enforcement system is so tedious that if you default, they rarely get justice. So, they prefer to lend to companies with reclaimable assets.

If you’re one of the little guys, you won’t get a loan from a Nigerian bank. 

Loan sharks have emerged to service this addressable market. There are now loans for everything — payday, food and restaurant supplies, and the new favourite — japa and study abroad loans.

Smart Lending is Possible

If you’re a bank, use AI tools to open up a percentage of the loan book to individuals who are statistically likely to repay, even without collateral. Run a pilot, then scale.

Also, explore alternative loan structures like venture debt with built-in profit-sharing mechanisms.

Subsidise business plan development and financial statement preparation for SME clients. Let them access professional services at a deep discount through vetted firms – those that won’t fudge the figures. This lowers your loan risk and reduces the obsessive need for collateral.

Fix Dispute Resolution

Banks need to fix their adjudication process for disputes and bad loans. The Securities & Exchange Commission already runs a parallel tribunal with defined timelines for dispute resolution. There’s no reason the adjudication process for banks should still be such a headache.

Retail Banking Has Changed

Neo-banks, USSD apps, and POS merchants have proven that even the unbanked and illiterate can use tech-driven services — outside traditional banking halls.

As a bank, drive retail banking by building agent networks. Go where customers already are.

Make your tech simple enough for a child to use, and stop the poor practice of tech upgrades without proper communication.

Empower your account officers. Make them actual financial advisers — not glorified customer service reps. Let them earn their pay by delivering value.

Rethink Customer Engagement

I love the food and fashion fairs that banks sponsor. But the main stages are usually reserved for established brands.

If you’re a bank, hold local enterprise fairs in every state where you operate. Open the vendor stalls only to your customers. Bankroll the entire event to give them a real opportunity to “sell their market.” If you’re collecting cheap deposits from people, give them something of value in return.

Create dedicated spaces for weekly Farmers Markets, especially for agri-businesses.

And of course — only your POS machines should be used in these spaces, ensuring transactions flow through your system. It’s a win–win.

These are just a few ideas to help Nigerian banks give more value.

Hopefully, someone’s listening.

Nigerian banks do not work for you. You give them low-cost deposits which they invest in secure bonds and bills. They give you a small cut of the returns and pocket the rest. That’s their business model, and it’s highly profitable. But things can change.

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For more, read How Do You Treat New Customers?