Business
THE Chief Executive Officer, Arvofinance, Ayotunde Bally, has urged online lenders to anticipate the future and adapt to changing dynamics of the industry, to remain sustainable and competitive.
Bally, who gave the advice in an interview with the News Agency of Nigeria (NAN) on Wednesday in Lagos, spoke on the backdrop of the removal of fuel subsidy by President Bola Tinubu.
Arvofinance is a fintech company that provides online loans to consumers without collateral and guarantors.
Bally described the removal of fuel subsidy by Tinubu as a” commendable policy move” but added that the resultant increase in the cost of living had negative implications on businesses, including online lenders.
“For example, we are currently experiencing a rise in loan applications with lower repayment rates.
“This trend can potentially escalate the Non-Performing Loan (NPL) ratios for us, and we may be forced to review our interest rate policies to cushion the impact of higher operational costs,” he said.
He advised online lenders to explore innovative strategies to maintain operational efficiencies, manage their default rates, and limit the consequences of rising costs on their businesses.
For instance, he said deploying proactive risk modeling tools to identify bad loans and allowing work-at-home arrangements to reduce the burden of high cost-of-living, might enhance sustainability.
Bally urged online lenders to develop strategic and innovative approaches to remain competitive in the face of these challenges, whilst the market gradually stabilized.
He urged the Federal Government to manage the impact of the removal of fuel subsidy prudently.
“This will ensure that the short-term pain experienced by businesses and citizens is eventually outweighed by long-term gains for the economy.”
TS
Tags: Arvofinance Ayotunde Bally President Bola Tinubu.
