Is there interest free loan in Nigeria? no there is not, it is impossible, that is the answer of many people when ask about interest free loan including me but it was a surprise to see that there are more than four banks in Nigeria that offer interest free loan, yes you heard me right, you don’t need to pay back
any interest on whatever loan what you pay is the principal but as you are suggesting right now it is hard to get loan from these banks and they are mostly muslim bank.
How do they make their profit?
It is a good question, they are bank just like First bank and other banks in Nigeria, they made their profit form banking activities like charges on transaction and the likes, but since most of them are Islam banks they follow sharia and they do not collect interest on whatever loan they give out but you must have a good credit score before applying foe loan with these banks which means you must not have defaulted on any loan before, because they will screen you.
Banks offering interest free loan in Nigeria
Jaiz bank
The first on our list of bank that offer interest free loan in Nigeria is Jaiz bank. Jaiz bank was founded in 2003 by Alhaji Umar Mutallab a banker who once served as chairman of First bank. He has also served as minister under General Muritala Muhammed and Olusegunn Obasanjo.
He founded Jaiz bank shortly after leaving first bank as a chairman. The sole aim of the bank is to provide baking platform that follow sharia law and one of this law is that no Muslim should give out loan with interest it is liken to gambling.
Since the 2003 the bank has spread throughout Nigeria capital with it headquarter in Abuja, it vison is to become the no 1 ethical bank in Africa and it is heading towards that.
Jaiz bank offer three kinds of loan and they are
- House gold appliance loan
- Project financing
- Working capital
Housed appliance loan
This loan is targeted at individual who want to purchase house appliance like television, radio, kitchen utensil and others. The loan payback period is 24 months and to remind you it is interest free.
Project financing
This is for those that want to build house or any other project, on applying for this kind of loan Jaiz bank will help you completes whatever ongoing project you have, you will then pay the money back every month.
Working capital
This is targeted at business owner who want to start a business or want to expand an already business , the loan is interest free but you must have a good credit score.
Sterling Alternative Finance
The second on our list is SAF, a subsidiary of startling bank, they also offer interest free loan to individual and business in Nigeria but the little problem is that you need to make commitment of 20% of whatever loan you are requesting, for instance let say you are looking for loan of up to #1,000,000 you need to make commitment of #200,000 before you can access the loan.
The payback period depends on the amount of loan, it is usually per month per quarter month and per year.
SAF is a CBN licensed bank, established in 2014, and have it headquarter in Marina Rd Lagos Island, Nigeria.
TAJ bank
Taj back is another Islamic bank that offer interest free loam in Nigeria, it operate just like jaiz bank and have their headquarter in Abuja and branches in capital of state in Nigeria.
They offer deferent kind of loan and some of them are
Working capital
In this type of loan the requester will look for material he or she want to purchase, note the price and then apply for working capital loan with TAJ bank. Taj bank will buy the material and give it to the person with no interest.
SME finance
Another type of TAJ bank loan is SME finance, if you are a business owner you can apply for this loan, it sole purpose is to help business owner boost and expand their business.
But it is given in cluster which means that you will be group into cooperative before you will access the loan.
Lotus bank
Lotus bank is new kid on the horizon, it was established in 2021 and they promise to give interest free loan to their customer, they are currently under our watch and once they start fulfilling their promises we will update this page.
Conclusion
Above are banks that offer interest free loan in Nigeria, as you can see most of them are Islamic bank, so if you are Muslim it is an added advantage, we will keep updating this page as we see more of interest free bank in Nigeria.
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