Paylater: Issues with soft loans made easy

One of the big challenges facing many Nigerians, presently, is how to access quick short-term soft loan to help cover urgent cash needs. There are times, when individuals are short of cash and need assistance to meet such. Similarly, there are times people may need short loan to bridge a gap or boost a business venture. Many Nigerians fall into the category of those who need short-term soft loans, especially with the prevailing economic situation.

In the midst of financial challenges, banks are unable to give loans to people and partner with them to float different ventures. The terms and conditions for granting loans by many banks are stringent and the process tedious. Many banks require that loan applicants operate accounts with them.

As prerequisite for loan, collateral and guarantors are often demanded. Many microfinance banks, however, waive some conditions, yet, many investors are unable to meet the conditions, and are going for alternatives.

While some are forming cooperative groups and rotating money among members, others are approaching moneylenders for loans and paying exorbitant interests.

One such alternative is a new facility in the financial market, known as Paylater. It is a service provided by One Finance Investment Limited, a licensed and regulated finance company, according to the company’s website.

Among its many claims is its ability to offer short-term loans to help cover unexpected expenses, as well as, urgent cash needs. It also claims that loan application; review, approval and receipt of fund directly into preferred bank account can be done within 24 hours.

The company, however, made one distinction that is noteworthy. It said Paylater is not a bank and, therefore, neither receive deposits from the public nor operate savings or current account. So, one wonders how it manages to operate without customer capital.

Investigation by The Guardian revealed that services rendered by the company are done 100 per cent online. For instance, prospective customers are required to download Paylater app on their android phones to complete their application.

Under the terms and conditions, the company requires prospective customers to provide basic information about themselves, connect their Facebook accounts to the app and supply functional BVN-linked bank account to receive funds. Once the loan is approved, a customer receives client ID for identification.

According to available information, maximum loan for a first-time applicant is N10, 000 and the loan duration is between 15 to 30 days. The loan attracts a one percent daily interest charge.

Paylater equally assures its customers of upward review of loan facilities, once they make timely repayments. The company says it can grant access to higher credit limits for subsequent loans.

What do Nigerians; especially those who have patronised Paylater feel about its services?

Fred Edeminam, a civil servant, said Paylater has helped him to run his small business successfully.

He said: “It has helped so many Nigerians survive in this economic meltdown. I never believed something like this could happen in our country that has been branded as ‘fantastically corrupt’. I have been borrowing from them for four months now.”

Speaking in the same vein, Friday Akanni, an Air force personnel, who commended the company, explained that Paylater is simply excellent and a true friend in time of need. He, however, appealed to the organisation to consider helping Nigerians with higher amounts with repayment plan spread across a few months.

Some others, however, have divergent views on the matter. Many say Paylater delays in sending approved funds and updating latest repayments. Some say this is as a result of the company’s use of poor IT service and technicians.

For Nana Iwediuno Stanley, the story is different. According to him, he applied for a loan last month, and received an SMS informing him of the loan approval. Sadly, his account was never credited with the money. Surprisingly, he was later inundated with SMS and email from Paylater asking him to repay the loan. When he contacted the company, he was requested to send an email showing proof of non-receipt of funds.

In Kunle Adeyinka’s case, the repayment experience was a nightmare.

“I repaid the N10, 000 for a 15-day loan promptly, and before the due date in April. But Paylater didn’t stop sending me mails and text messages to repay the same loan for a long time. I sent several emails with evidence of transfer made for repayment.” He wondered if it is a take a loan and repay forever system the company operates.

Some of their customers are also concerned that Paylater refuses to grant more loan requests after two successful loan repayments.

The duo of Aminu Dyeris and Daniel Adamu shared this concern. An online marketer, Adekunle Adex Adebayo corroborated this allegation, saying after his fourth successful loan repayments, all efforts to apply again failed.

An e-payment solution worker, Odutola Agbaniselu Ola, however, feels the interest rate is too high. According to him, one percent daily makes 30 percent monthly, which accrues to 360 percent per annum.

“Even banks take less than 2.7 percent a month, which is about 27 percent yearly. Some take four percent a month and about 48 percent per annum.”

According to Paylater terms and conditions, repayment date is fixed from the date of approval, and not when funds are received. This has led to many unhappy customers, especially with the faulty online service. Many received their loans days after approval.

Such is the case with Jeremiah Offor. He narrated how 48 hours after his loan approval; the fund was not credited into his account. He was bothered by the fact that loan repayment countdown starts from the day of loan approval.

“Because their service is not prompt, they should start counting down after the loan must have been received,” he counseled. “They can do better than what they are doing presently.”

Efforts to speak with officials of the company were abortive. Repeated messages sent to their web address were not responded to.

While Paylater has risen to the challenge of providing short-term loans at this critical time, the company still has several hurdles to scale to deliver quality and efficient services to interested clients.