TopCheck.com.ng, Nigeria’s leading comparison site for loans, has experienced a significant increase in Personal Loan requests since the devaluation of the Naira on June 22nd 2016.
“During the two months before the devaluation, when black market rates spiked, we already experienced an increase in Loan search volumes by roughly 10%, but since the devaluation the situation changed dramatically. We now see an increase in demand for Loans by an astonishing 29% daily.” says Christian Wiesner, co-Founder of TopCheck.com.ng. “Our clients tell us that they cannot afford the way of living they used to have as prices of imported goods have exploded, even more than the change in exchange rate.”
Nigeria’s currency was devalued by the CBN (Central Bank of Nigeria) on June 22nd 2016 after the exchange rate has been fixed to the USD for many years. Due to the crash in global oil prices, the demand for Naira dropped significantly putting the currency under a lot of pressure. As a consequence, the black market rate started to diverge from the official rate significantly, proving great business for black market traders. In February 2016, the black market rate peaked at ₦380, being nearly twice as high as the official rate at ₦197 – ₦199. After months of uncertainty, the CBN decided to devalue the Naira to approximately ₦280, which equals a drop of nearly 30%.
Subsequently, imported goods and services became more expensive. Retailers increased prices, the fuel price got adjusted and inflation is on its rise, hitting 15.6%, the highest value in 6 years, as mentioned by the National Bureau of Statistics. “People are currently looking for money in order to finance their daily activities. On TopCheck.com.ng we see a lot of demand for Loans for paying rent, starting their own business or paying medical bills. Unfortunately, our partners, which are banks as well as microfinance institutions, demand proof of a steady income in order to get a Loan, so many Loan requests cannot be fulfilled.” Says Wiesner. “We expect a further increase in Loan search requests on TopCheck over the next couple of months, because foreign investment in the country is just starting now. The devaluation was the first necessary step to create trust for foreign direct investment that creates new jobs and opportunities.”