It is almost impossible to get a loan without BVN in Nigeria. This is mostly because financial institutions consider individuals without BVNs a flight risk.
In February 2014, the Central Bank of Nigeria (CBN), in collaboration with the Bankers' Committee, launched the BVN project.
The aim of the project was to capture the biometrics of all bank customers and give them a unique identity that can be verified across the Nigerian banking industry.
This unique verification was to help the banks with their ‘Know Your Customer’ (KYC) purposes.
In addition, the BVN project was also designed to guard against identity theft and fraudulent bank transactions.
Benefits of enrolling for the BVN
As part of the requirements of CBN, all Nigerian Bank customers are to enrol for the BVN project.
Multiple account holders with different banks are required to enrol only once.
Some of the benefits of having a BVN include.
● Unique identity
The BVN gives a unique identity that can be verified across the Nigerian Banking Industry. This means your BVN is not peculiar to one Bank.
● Account protect
The BVN protects customers’ bank accounts from unauthorised access. With the BVN, issues like identity theft, and exposure to fraud were greatly reduced.
The BVN will enhance the banking industry’s chances of being able to fish out blacklisted customers.
● Means of identification
As the country is yet to make a headway in issuing the National Identity Card, the customers’ unique BVN is now being accepted as a means of identification across all Nigerian Banks and other government agencies.
To enrol for a BVN customers must present the following.
1. A BVN Enrolment form
2. A valid ID – International Passport, National ID card, Driver’s license or any other valid means of identification
3. One recent passport photograph
Why do lenders need your BVN?
Lenders in Nigeria need your BVN to confirm your identity. This provides them a form of safety net since they can use the BVN to check if you are who you really say you are.
This became necessary given the rise of loan defaulters at the time, with mostly untraceable addresses.
Although BVN can be used to locate loan defaulters and probably flush them out, BVN however cannot be used to access any bank account or be used to pay money into or collect money from any account by itself.
It can only be used to access information about the owner of a bank account to confirm personal details.
Things to note about your BVN
As a bank account holder, you need to be extra careful with your BVN. Having it fall into the wrong hands may grant access to your bank account and all your money withdrawn.
Other things you need to note about your BVN include.
1. Loan access
In Nigeria, it is almost impossible to receive a loan without BVN. Loan organisations that do not need a BVN will require a borrower to submit guarantees or collateral in exchange for a loan.
When approving an unsecured loan, the borrower's profile, income, and solvency are still considered. Indeed, the lender must verify your capacity to borrow and repay.
Unfortunately, all loan organisations that disburse loans without BVN are offline, and the majority of them use harassing tactics to get payback.
2. Loan apps can’t block your BVN
No loan app in Nigeria can block your BVN. Restrictions can only be placed on your BVN in Nigeria by the CBN.
For instance, in a situation where you fall short of loan repayment, your identity will be reported to the National Credit Bureau.
This financial body will label you a high-risk borrower, making it more difficult for you to get a loan from any loan platform in the future.
Having a negative rating with the Bureau may seem trivial at the moment, but if you plunge into a financial crisis and require credit, no loan app in Nigeria would provide you with one because of your poor credit history.
For this reason, you should never cease paying your loans, and if you have not done so, you may contact the loan app for assistance in negotiating a reduction on your debt.
● Your BVN is safe with loan apps
Your BVN is safe when submitted to loan platforms that have the National Information Technology Development Agency – NITDA authorisation.
Since the BVN is connects to all of your financial records, if it enters into the hands of a criminal loan organisation, they might possibly access all of the individual's administrative documents.
● Don’t share your BVN with anybody
No matter how close you think you are to them, it is not advisable to share your BVN with other individuals.
Even if they have the best intentions, they may be careless and have it fall into the wrong hands.
Your BVN should only be shared when it is required by trusted and government regulated financial institutions.
Although fraudsters cannot use the BVN alone to steal money from any of your accounts, since it can be used to check your identity details, they might try to use the knowledge of your identity to ask for your bank account details, ATM details and ATM pin.
Once they have this, they can easily proceed to take money from your bank accounts.
Can I get a loan without BVN in Nigeria?
Can I get a loan without BVN in Nigeria?
There are very few reputable loan apps in Nigeria that will disburse loans without requesting for your BVN.
Unfortunately, the rise of digital banking has also brought about an increase in the activities of fraudulent loan companies which is why Nigerian loan apps need identity verification.
Most genuine loan apps in Nigeria require you to submit your BVN before your loan request is considered.
Any loan platform that does not demand for your BVN should be thoroughly scrutinised.
How to spot fake loan apps in Nigeria
Fake loan apps have become a major issue in Nigeria owing to their aggressive collection tactics. Their modus operandi is to provide a loan in exchange for access to personal information and data on the phone, such as the contact list as well as credit and financial standing of individuals.
1. Unavailability on Google Play Store
2. Abusive collection practices
3. Sanctioned by financial authorities
4. Unsecured website
5. Negative customer feedback
6. Advance payment demands
7. Requests for passwords and sensitive information
8. Hidden loan conditions
9. Mouth-watering interest rates
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