With the abuse and breach in privacy by many loan apps which have led to heavy sanction from the Federal Government, Risk Officer for Blueridge Mircofinance Bank, Magnus Uloh, speaks with Vanguard on how its institution has improved customers’ satisfaction through feedbacks, and adherence to polices by regulatory agencies.
Let’s talk about the latest development?
What came to my mind was that there is a disconnection between the public and the emerging Fintech sector. There is a need for sensitization and further education of the public about how the Fintech sector works.
How much would you say you have done in publicity and sensitization?
We have done quite a lot in this regard. However, it is quite obvious that more needs to be done. We will continue to engage with the public and create even more awareness about the terms and conditions with respect to our loan products.
Who are your audience?
Our target audience are the economically active ones. These are people who have the mind of doing business but don’t have the financial means or resources to fulfil their business goals. What they need is to be able to access funds and derive sustainability in what they do.
That is why we target the low-income earners who form the larger population. Just like the economically active ones, they don’t really have access to the conventional banking system. Our platform gives us the opportunity to bring banking to their doorstep.
What is the interest and flexibility rate?
Our interest rate is relatively fair and quite competitive. We take into cognizance our target market, knowing that they are not the elites. They are people who are trying to survive in their business. We considered this and that is why we made our interest rate flexible and low.
How do you go about the communication gap, how do you try to make people understand what they are walking into?
It is a matter of feedback. As a bank, we have improved on our services based on the feedback received from customers to ensure that we are able to address their needs and also ensure they know the existing terms and conditions. For example; When the life span of a loan has been exceeded, there is always a penalty charge or default charge. All these are clearly stated in the terms and conditions.
What do I need to get a loan?
To get access to a loan, you need to fulfil the basic KYC details; Your full name, work and home address, business type and the purpose for the loan. Those are the basic requirements.
In the sector where we operate, it is not advisable for us to collateralize loans and this is what differentiates us from the commercial banks. In a microfinance bank and in the Fintech industry, the most important requirement to access any loan is the character and financial history of the borrower such as; good credit history. This is why we try to carry out a credit search on customers via CRC and other Credit Bureau platforms.
Do people run away with your money?
Yes, people feel the bank has its own money and will survive. However, the bank is just a link between the surplus economy and the deficit economy.
The bank takes from who has and gives to those in need of funds. When people borrow money and refuse to pay, it is a loss to the bank and the economy at large. This is why people need to be sensitized so that they will take responsibility in paying back their loan as at when due.
There have been embarrassing WhatsApp and text messages from FINTECH companies trying to clamp down on borrowers through their contact list. What do you have to say to that?
We don’t indulge in such practices, we have professional customer-facing teams. We continuously train our staff on proper loan recovery methods in order to ensure issues like these don’t come up. We have a quality inspection team that regularly monitors the activities of customer-facing employees.
What are the ways you adopt to reach out to your customers differently and how do you get your money back?
In the process of disbursing the loans, we don’t need to have any interface with the customers, we have our own requirements. For example, the customer selects a method of collection, it can be via direct debits or other preferred channels. For customers who default on repayment, we send a reminder to them of their due dates.
Are you licensed to operate?
Yes, we are licensed by the Central Bank of Nigeria and regulated by the NDIC, FRC, and other regulatory agencies.
Your take on FG’s order that Apps should be taken down on Google?
It is quite unfortunate because the issue we have come up against is a total misrepresentation of Blueridge and its esteemed customers. As I said, Blueridge’s products are completely different from other lending apps. I don’t think the statement from the FG involved us. We are however seeking redress. Most people don’t know that microfinance banks are also fintechs. I am certain we will find a lasting solution to this soon.
What is your Customer base?
We have between 3,000 to 5,000 customers and we have been operating since 2018.
We would like to inform our esteemed customers and the general public of our ongoing partnership and collaboration with the regulators and stakeholders to address issues in the digital lending sector. As a bank, we strictly adhere to regulatory guidelines and have regulators visit us regularly to ensure we are doing the right thing.
We would like to assure our customers to be calm as there is no cause for alarm.