During the launch of a book on banking reforms earlier this week, the speaker of house of representative, Hon. Yakubu Dogara raised some serious concerns on how the banking institution in Nigeria stifle small businesses, he decried the look warm stance of the “lenders” on funding small and medium enterprises (SMEs).

One of the bedrock of any economy is the small business sector, not only do they create innovative products; they also create employment opportunities for the teaming population. So any economy that ignores this all important sector is heading for high rate of unemployment which leads to high crime rate, kidnapping, fraud and illegal acquisition of wealth. The banks which are supposed to play their role as the lenders have unfortunately misplaced the priority.

Enter access bank credit card for students

Earlier today access bank’s executive director on Personal Banking Division, Mr. Victor Etuokwu unveiled a credit card for students of tertiary institution in the country which he described as teaching young people how to be responsible borrowers.

To understand what a credit card means let me first give a simple explanation; ‘A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder’s promise to the card issuer to pay them for the amounts so paid plus the other agreed charges’. This means that the card holder can spend above what he/she has and pay back later with interest.

Who needs a credit card more?

In a working society there is obviously nothing wrong with issuing a credit card to students, afterall developed countries do it but this is Nigeria where we struggle to do the right thing. As I wrote earlier on in this piece, small business holders hardly ever get a business loan from money deposit banks; this is because of the impossible requirements like collateral securities, expected business turnover you can have before accessing the loan as well as getting references and guarantors.

Although access bank did not explicitly state how they will recover the credit from students, but why give loan to students who are not yet working while ignoring entrepreneurs who could use the credit facility to create jobs for these students when they graduate? This scenario is a classic case of misplaced priority in my own opinion.

The heart of the matter

For a bank where it is almost impossible to access loan as an entrepreneur to create a credit card for students, I really want to follow up on this product to see how it goes. When you critically look at this product, it has a better chance of working out with entrepreneurs than students who most of the time has no means of paying back.

I think the bank should go back to the drawing board and create products that will help small businesses succeed in the country, not only access bank but all the commercial banks in Nigeria. It is easier for politicians to secure loan in banks for nomination form than for SMEs to get funds from banks, as serious as this practice is to the economy of this country, there is little or nothing done to find a midway.

Final verdict

The access bank credit card for students is dead on arrival, if the bank truly want to create “responsible borrowers”, let them start from the small business sector that needs it. It is also in order to stop describing our banks as “lenders” and use more of “money deposit banks” as that is the area they are very good.

https://www.financialwatchngr.com/2018/03/15/access-banks-students-credit-card-hit-or-miss/

I think there should be some criteria that guide the issuance of the said card.
For instance, students must present documents like:
1, Previous academic records. (Student with terrible records may not be eligible)

2.State of origin/LGA

3. Guarantor or so.

If any student fail to meet up with their end of the agreement, writing to their school should be the way out.

What are you saying now you sound bitter what is your problem with students ? You sound as if the bank denied you opportunity of access money . they have reason why they introduce their program , even some student have money more than so call entrepreneur.

S

Nothing is valued in Nigeria, the same students will turn it to wire wire, names like "lalawire' nwaamaikpewire and so on and so forth will be on the increase

I swear i don't know what this thread is all about, and i wont like to know.

Thunder should rape Buhari for making things hard for Nigeria

It’s gonna be a fail. The stupid students would “borrow” money to flex their dirty girlfriends and throw parties. Nothing good will come out of that scheme except massive bad debts. Access bank don enter one chance. In the quest for innovation, common sense should not be neglected.

Y

If you want to know how this will work, ask MTN how market for credit borrowing

johnmartus:
What are you saying now you sound bitter what is your problem with students ? You sound as if the bank denied you opportunity of access money . they have reason why they introduce their program , even some student have money more than so call entrepreneur.

am very sure u are below 18yrs old


u lack logical reasoning, the OP doesn't

If u like use d credit card buy sharwama for your crush make I know weda Herbert Wigwe no go call ur VC direct. Be lai say u no wan graduate because of N2,700 gbese

It will work. Students credit will be tied to their school records so imagine being unable to graduate due to unpaid loans. Just the same way you can't graduate without paying your school fees. To me it's a great idea. Imagine needing urgent cash to pay your school fees or for that lecturer's handout or that textbook and you can fall back on your credit card and pay later. No be good thing?

Student loans have been around for a long time abroad and have been quite helpful so it's a very welcome development here.

Capisce?

It would be a massive hit.

First, students would be eligible when they show a steady stream of allowance into the account.

A lot of students get steady allowances like 20k especially in private University. This means more accounts and funds would be domiciled at Access bank.

You would only be able to access a meagre percentage of your allowance.

If your allowance is 20k, your credit limit may not be more than 10k.

To be sincere ,nija go hard to rebuild, our past govt don already misplaced our priorities ,its gonna be hard to fix this country if you like blame buhari the next person might be worse,its never getting better,fuel ,dollars ,accommodations ,feeding has always been on the increase right from day one,I weeps for my country,the past govts ain't helping d next ,gej suffered ,buhari is suffering ,I wonder where d next person for ho start from,I can't imagine America budgeting so much on power,roads ,education and so on cos d past govts already fixed that....we need a miracle my brethren

I won't support this in Nigeria, because the average Nigerian student is not mentally sound to own as credit card. I still remember how most of my neighbours back then in school collected 10k loan from paylater.ng and refused to pay back. Infact it became a business opportunity for them; they'll help you register and once you get the cash, you'll pay them 1k.

maximunimpact:
During the launch of a book on banking reforms earlier this week, the speaker of house of representative, Hon. Yakubu Dogara raised some serious concerns on how the banking institution in Nigeria stifle small businesses, he decried the look warm stance of the “lenders” on funding small and medium enterprises (SMEs).

One of the bedrock of any economy is the small business sector, not only do they create innovative products; they also create employment opportunities for the teaming population. So any economy that ignores this all important sector is heading for high rate of unemployment which leads to high crime rate, kidnapping, fraud and illegal acquisition of wealth. The banks which are supposed to play their role as the lenders have unfortunately misplaced the priority.

Enter access bank credit card for students

Earlier today access bank’s executive director on Personal Banking Division, Mr. Victor Etuokwu unveiled a credit card for students of tertiary institution in the country which he described as teaching young people how to be responsible borrowers.

To understand what a credit card means let me first give a simple explanation; ‘A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder’s promise to the card issuer to pay them for the amounts so paid plus the other agreed charges’. This means that the card holder can spend above what he/she has and pay back later with interest.

Who needs a credit card more?

In a working society there is obviously nothing wrong with issuing a credit card to students, afterall developed countries do it but this is Nigeria where we struggle to do the right thing. As I wrote earlier on in this piece, small business holders hardly ever get a business loan from money deposit banks; this is because of the impossible requirements like collateral securities, expected business turnover you can have before accessing the loan as well as getting references and guarantors.

Although access bank did not explicitly state how they will recover the credit from students, but why give loan to students who are not yet working while ignoring entrepreneurs who could use the credit facility to create jobs for these students when they graduate? This scenario is a classic case of misplaced priority in my own opinion.

The heart of the matter

For a bank where it is almost impossible to access loan as an entrepreneur to create a credit card for students, I really want to follow up on this product to see how it goes. When you critically look at this product, it has a better chance of working out with entrepreneurs than students who most of the time has no means of paying back.

I think the bank should go back to the drawing board and create products that will help small businesses succeed in the country, not only access bank but all the commercial banks in Nigeria. It is easier for politicians to secure loan in banks for nomination form than for SMEs to get funds from banks, as serious as this practice is to the economy of this country, there is little or nothing done to find a midway.

Final verdict

The access bank credit card for students is dead on arrival, if the bank truly want to create “responsible borrowers”, let them start from the small business sector that needs it. It is also in order to stop describing our banks as “lenders” and use more of “money deposit banks” as that is the area they are very good.

https://www.financialwatchngr.com/2018/03/15/access-banks-students-credit-card-hit-or-miss/

so a whole financial watch can't differentiate lukewarm from lookwarm(which is wrong btw)

I understand the OP's questioning, but Nigeria is a free market economy, so it's up to banks to decide what they want to issue, and to whom. Access Bank has made the (presumably informed) decision that a student credit card would generate more profits than SME loans. Plus once hooked into accounts and credit cards with Access Bank, they are more likely to also get their car, mortgage, and even business loans from Access when they start working.

Banks are not investors. It's not their role to lend or give money to business ventures on the promise that the business may succeed or grow. That's the role of venture capitalists, angel investors, the rich uncle, personal saving, or family donation. On the other hand, banks do lend a lot of money to companies large and small, that have demonstrated positive cash flow over some years and the ability to pay back.

Government's role is to make sure people don't get unduly hurt (e.g. set limits for punitive terms of credit, and ensure that lending contracts are fully disclosed and transparent).

Now if Government was really serious about SMEs, there would be a large fund of grants and low-interest government-backed loans that would ease the bankers' concerns about getting their money back. Rather than the Speaker of the House raising a microphone to bleat about how banks should run their own business, he and his colleagues should really study what sensible countries have done to stimulate their SME sector.

...

I can't borrow more than 1k. I can't afford to be someone's slave. if I need start up, I'll work for it.

chicoMX:
I think there should be some criteria that guide the issuance of the said card.
For instance, students must present documents like:
1, Previous academic records. (Student with terrible records may not be eligible)

2.State of origin/LGA

3. Guarantor or so.

If any student fail to meet up with their end of the agreement, writing to their school should be the way out.

the truth is, student with low record tends to go into entrepreneurship compared to those with high record(who mostly have the mindset of working for ppl after graduation)
what did you think?

That American/european credit card system will not end well in Nig.......
Too many students with misplaced piorities.
Its even a form of enslavement,
A lot of Americans are still paying thier Student Loan debt years after graduation

chicoMX:
I think there should be some criteria that guide the issuance of the said card.
For instance, students must present documents like:
1, Previous academic records. (Student with terrible records may not be eligible)

2.State of origin/LGA

3. Guarantor or so.

If any student fail to meet up with their end of the agreement, writing to their school should be the way out.

Don't agree with the first one. Some students might be doing poorly in their studies because they're not passionate about what they're studying, or have already started investing more time and money into one business or the other.

Personally, I don't think credit cards are a good idea in Nigeria. Most Americans I know only use credit cards because there's a significant bonus if they pay their debts back on time. They actually earn from borrowing. As long as they don't spend above their means, they're good, and even make some extra cash.

On the other hand, in Nigeria, where there's widespread poverty, credit cards are just a way to milk more people dry. When they can't pay their debts, the bank gets to swallow one asset or the other and make them even more poor.

chicoMX:
I think there should be some criteria that guide the issuance of the said card.
For instance, students must present documents like:
1, Previous academic records. (Student with terrible records may not be eligible)

2.State of origin/LGA

3. Guarantor or so.

If any student fail to meet up with their end of the agreement, writing to their school should be the way out.

None of the criteria above can predict likelihood of paying back the debts.

Student loans, credit cards, interest charges and all sort of rubbish done by financial institutions are form of enslavement. I was in Unilag when Access Bank lunched this product, I just shook my head.

Not for spenders like Us

divineappo:

am very sure u are below 18yrs old


u lack logical reasoning, the OP doesn't

Inflexibility is the hallmark of the Tiny Mind.in your case.

Nigerians are just bitter people.

Accessbank got it right in my own opinion..

Just that they need to really do more background checks and keep proper records.

Access bank owes the "small businesses" nothing.

Besides, most "small businesses" are JOKERS.

No financial track records, shoddy business plans, atrocious work ethic and customer relations and the list is endless

And they expect the financial institutions to take them serious.

The serious ones oftentimes get the loans.