What do borrowers expect from the lender’s analysis?


Lendsqr, a lending as a service company, providing over 1,000 lenders with the data and technology needed to successfully run a lending business, wanted to know what borrowers really want from lenders. To this end, Lendsqr conducted a survey of borrowers; the results of which are contained and explained in this article. The goal is to help lenders understand how best to meet the needs of the borrowers they serve.


This survey was conducted online in Nigeria between August 7-8, 2022 by the Lendsqr Growth team. The survey had a total of 3,685 Nigerian respondents; adults 18 and over. This sample was mainly made up of regular borrowers from lenders on the Lendsqr platform who had applied for loans in the past few months.

The composition of the sample population used for the survey has been structured to reflect demographic characteristics that match those of the general Nigerian population. 61.5% of our respondents are single, and 36.8% married. 90% of respondents are involved in some form of employment, with more than 90% win below N300,000 per month.

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The results of our survey

At the end of the survey, we dove in to analyze the results and found some interesting results:

Short term financial goals

The majority revolves around creating and expanding businesses; 44% of respondents want to develop their current activity, while another 40% want to own a business. 37% want to generate multiple sources of income, while 25% want to take investment portfolios. Surprisingly, only ten% said they left Nigeria as part of their short-term plan.

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Among the respondent categories, respondents outside of Lagos and Abuja highlighted grow and grow their own business as the main short-term objective; while Millennials and Gen Z are given prominence have and develop their own business as the main short-term objective.

Knowledge and use of financial institutions

In our assessment of the type of financial institution Nigerians prefer to turn to for their lending needs, digital lenders accounted for the highest proportion in our survey. 35% responded that they took their last loan from digital lenders, while 23% and 18.6% took out loans from microfinance banks and commercial banks respectively. In addition, 10.8% of respondents borrow from informal lenders (Ajo and Cooperatives).

Full-employment respondents indicated that commercial banks were the primary financial institution they took loans from, as opposed to digital lenders which were more dominant with self-employed and student borrowers. These results are consistent with the reality that commercial banks are more likely to benefit from established relationships with borrowers through their employers.

However, through active prospecting and engagement, digital lenders can foster greater penetration among employees. 25 – 34 users.

Reasons for taking out loans

The majority of borrowers said they took out loans to meet their short-term cash flow needs and grow their business (47.6% and 34.8% respectively). This was followed by 22.5% who have registered starting a new business and medical reasons for taking out loans. 17.8% said they took out loans to deal with medical emergencies.

With 11.8% of the respondents highlighting the payment of tuition fees, we found that there is an opportunity for lenders, especially small lenders, to enter and serve the important education finance market in Nigeria, which is currently underserved.

Only 2.1% and 1.4% of respondents said they had taken out loans to buy a house and a car respectively.

Respondents who indicated having financial dependents also indicated make up for the immediate cash shortfall and expand their business as the main reason for taking out loans; including their additional responsibilities.

Lending Challenges

The results showed that 59% of respondents highlighted high interest rates as their biggest challenge in getting loans. This was followed by 42.6% people put off by loan application requirements, while 27.6% of respondents find the risk of taking on debt more difficult.

This introduces a possible hypothesis that Nigerians will take more loans if loan interest rates are more affordable.

36.6% of respondents highlighted fear of being embarrassed and harassed by lenders as a barrier to taking out a loan. This can be partly attributed to recent unethical loan collection actions taken by lenders to force repayment from defaulting borrowers; especially sending defamatory messages to friends and family of those who have defaulted on their loans.

Personal details for rating / underwriting

Only 49% of respondents said they were willing to share their bank statement, while an even smaller percentage 33.5% showed their willingness to share their salary details. These results pale in comparison to approximately 69% respondents who would gladly share their home address with lenders. Are borrowers really concerned about the security of their personal data or are they just reluctant to share their true financial situation to allow lenders to make more informed risk underwriting decisions? Perhaps these two truths can coexist.

Contrary to the general attitude towards financial disclosure, respondents under 34 were more willing to share their job and salary details, with 68.9% indicating a desire in this age group. This highlights the age group’s greater affinity for actively participating in a credit system that assesses their creditworthiness on a revolving basis.

Main qualities expected of lenders

Respondents identified interest rates, speed and security as the top three qualities they look for in a lender, 65%, 53%and 45% respondents respectively. Agent-led onboarding ranks lower than a digital-led experience (4% at 17%) as a preference for borrowers, highlighting a greater affinity for digital interactions.

Borrowers want to pay reasonable fees and a convenient borrowing experience, as indicated by 36% and 34% of respondents who highlighted fees and customer experience, respectively, as the top qualities they consider when making a decision about their potential lender.

Lender brand and longevity rank surprisingly low on the list of qualities borrowers prioritize when selecting a lender to 13% each. Without neglecting the importance of their brand, new lenders can focus on more financial qualities (interest rates, fees and charges) while looking to create traction in the market.

18% of respondents highlighted the presence of financial coaching as a decisive factor for them in choosing a lender. There is room for improving financial literacy in Nigeria and lenders can invest in building learning resources for borrowers to gain their confidence.

Favorite channels

About 76% of respondents indicated their preference for taking out loans via mobile applications. The next preferred channel was the web app (13%); followed by 8% and 3% respondents who prefer to obtain loans from a branch (physical office) and agents respectively. The overwhelming preference for digital channels positions them as a priority for lenders in engaging their customers. Lenders can penetrate deeper into the borrower market by expanding their loan distribution channels.

Lending is more nuanced than just giving loans to anyone who wants a loan. Lendsqr is on a mission to provide lenders with what they need to succeed. This includes knowledge and expertise. You can contact [email protected] for more information on the results of this survey and Lendsqr’s solutions.


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