In an effort to further financial inclusion in the nation, Baobab Microfinance Bank Limited and its sibling company, Baobab Plus, have extended their credit buy program to smartphones.
According to the company, the success of its solar energy credit program led to the expansion of the service to mobile devices.
Following its launch at four bank branches simultaneously last week, the mobile phone promotion is set to roll out to additional locations around the country in the upcoming months.
According to Kolawole Osinowo, chief executive of Baobab Plus, the program is an innovation of the company, while the microfinance organization offers funding and sale outlets.
According to Osinowo, the scheme’s ultimate purpose is to bring Nigerians who are not currently involved in the financial system into the banking sector and provide them the chance to have their creditworthiness evaluated.
“This rides on the success of our solar power scheme, which provides power to the last mile. Apart from the opportunity to get mobile devices and spread the payment, across three or six months, this will help to build a credit history for the customers.
“If you take up a device, and you are able to in 13 or 26 weeks without missing any instalment, you have been able to show that you are creditworthy. That provides the microfinance bank with an opportunity to assess your creditworthiness,” Osinowo said.
Subscribers are expected to pay 20% of the device’s total cost up front, with the remaining 80% spread out over three or six months.
The organization uses three strategies to decrease default: a phone lock mechanism, a digital advisory, and a credit rating system.
Rotimi Wusu, the head of corporate communication and marketing, characterized the plan as advantageous for both the bank and its clients. He continued by saying that it will hasten the expansion of the bank’s customer base.