There’s a new slogan buzzing around the consumer landscape in Nigeria, and it’s refreshing to hear. It’s “Buy now, pay later”. As it implies, it’s a credit scheme that allows consumers to make purchases up to a predetermined limit at selected retail outlets, and pay later. Over time, shoppers create a credit history for themselves, which allows them to increase their borrowing limits, and potentially reduce their rates.
This concept is not at all new. A defining ingredient for organized retail and one of the largest stimulants of consumerism in most of the developed world is credit. It’s only imperative that for Nigeria and Africa to really grow retail spending, merchants and consumers need to get more and more comfortable with credit. Already, in Nigeria, companies like Airtel allow customers to buy call credits now and pay later. There are also pockets of initiatives for employees of large corporate organizations that allow them make purchases at selected outlets and pay later or in installments from salary accounts.
Nonetheless, retailers in Nigeria have been weary about offering in-house store credit to the general public for several good reasons: There is lack of data to effectively profile prospective borrowers, and the process of collections promises to be a nightmare of a non-core business exercise. On the consumers’ side, credit is perceived negatively primarily because of the difficulty in accessing loans, and the general unavailability of quick, non-cash, and small loans for simple consumer goods.
One Credit is a financial institution that hopes to intermediate and put these challenges to rest in Nigeria once and for all. Via their Paylater platform, they partner with top e-commerce businesses in Nigeria like Suregifts, DealDey and Heels, allowing shoppers to make fast, impulsive purchases on these websites and pay from their Paylater wallets. So, cash-strapped and forgot to get a gift for that wedding tomorrow? Just buy a Suregifts gift card and pay later. Is the time counting down on that unbeatable deal on DealDey, or is the stock-count down to one on that shoe on Heels? Well, grab it now and pay later. The signup process has been stripped of the typical credit application ‘trial’ that has frustrated borrowers over the years, and merchants can focus on their business of selling, not debt administration.
Still, Nigeria is tough. One Credit has a whole lot to learn about the terrain, and there’s so much valuable data to gather. One thing is certain though; the innovation is very positive for the industry, and it’s in the interest of all to stoke the consumer credit flame in Africa.