The difficult economic situation, which continued after the commencement of the new foreign exchange (forex) policy has pushed many people to look for personal loans from financial institutions.
The loan requests, which rose by 29 per cent to hit a 30,000 mark in the first two weeks under the new flexible exchange rate policy, include rent payment, business support and medical bills, among others.
Unfortunately, majority of the requests are turned down daily, as proof of steady income, which is the condition for approval of the loans cannot scale through.
According to a price comparison site for insurance, Internet and loans operated by TopCheck.com.ng, weaker Naira has hit the Nigerian population hard, as people now experience increase in costs, while salaries stay the same and unemployment rates increase.
The new forex regime, which put exchange rate of the local currency at the hands of market forces, saw the Naira settle at between N282 and N285 since its commencement.
Consequently, imported goods and services have become more expensive, with price of items imported prior to the new policy adjusted automatically upwards.
Earlier, the adjustment of petroleum pricing template and sustained rising inflation, presently at 15.6 per cent before the new policy had already set in motion a regime of high prices for goods and services.
“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. 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,” the co-Founder of TopCheck.com.ng, Christian Wiesner, said.
He pointed out that people are currently looking for money in order to finance their daily activities, adding: “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.”