2019 Payday Loans Industry Report

Overview of the Report

Agusto & Co.’s Payday Loans Industry Report is the most comprehensive and up to date report on payday lending activities in Nigeria, providing an in-depth review of the Industry’s operations, key trends, risk areas and how the macroeconomic climate impacts the growth and development of payroll lending activities. Our report also examines the Industry’s competitive landscape, regulatory environment, life-cycle and market potential going forward. “Payday Loans” (also referred to as salary advances, payroll loans and payday advances) are typically small, short-term unsecured loans that are tied to a borrower’s payday. These loans are designed to meet the short-term needs of an individual until the next payday, when the loan is usually repaid in full. Following the successful entry of pioneer operators, numerous players have emerged and provide a variety of financial services to individuals and SMEs, through finance company and microfinance licences (issued by the apex bank) and state moneylenders licences (issued by state governments). Given the rising demand for short-term loan facilities in Nigeria, commercial banks are increasingly offering salary advances and quick credit facilities to individuals that may not typically meet the bank’s risk assessment criteria for traditional products. With many banks adjusting their respective business strategies to capture the retail segment, competition is expected to increase considerably in the near term. Furthermore, nano-lenders are considered burgeoning threat to payday lenders. These lenders focus mainly on the lowest end of the income pyramid and granting loans as low as ₦1,000. We expect demand for payday loans to remain high, with a continued influx of new entrants seeking to provide services to Nigeria’s underserved market.

Our Payday Loans Industry Report answers questions on:

  • The strategic importance of payday loans in Nigeria
  • The impact of the weak economic climate on the payday loans industry
  • Structure of the Industry and various licences obtained by operators
  • Regulatory policies, recent changes/additions and challenges
  • Strengths, weaknesses, opportunities and threats within the Industry
  • Outlook for the payday industry in the near term
  • In-depth review of the historical background of payday lending activities in Nigeria
  • Examines the Industry’s structure, focusing on the various segments and trends.
  • Analyses the competitive profile of key operators within the Industry.
  • Examines prevalent challenges within the Industry
  • Tracks key regulations, industry trends and opportunities