Jaiz Bank to Offer Collateral-Free Loans for SMEs

Jaiz Bank Plc has said it is awaiting the approval of the Central Bank of Nigeria to roll out new financing products that will enable small and medium-scale enterprises to access loans without traditional collateral requirements.

The Managing Director and Chief Executive Officer of the bank, Dr Haruna Musa, disclosed this while speaking with journalists in Abuja on Wednesday after the bank’s 14th Annual General Meeting.

Musa said the proposed products, targeted at SMEs and retail customers, would allow the bank to assess borrowers based on their cash flows rather than physical collateral, a move aimed at expanding access to finance and deepening financial inclusion.

According to him, the bank has already developed the products and is waiting for regulatory approval before launching them.

“We have developed an SME-friendly product just awaiting the approval of our regulator, the Central Bank of Nigeria.

Once that is achieved, we will be doing cash-flow lending. We’ll assess you based on your actual cash flow, either with Jaiz Bank or with any other bank, and then we can lend to you depending on the capacity that you have,” he said.

He added that the financing model would reduce the burden of collateral requirements on small businesses. “Instead of that collateral structure, we might end up getting loan guarantees and signed GSI mandates. With that, we intend to see a lot of improvement in support for SMEs,” Musa said.

The Jaiz Bank boss noted that the lender plans to leverage technology to make access to financing easier, enabling customers to apply for and obtain financing remotely.

“We intend to make it a straight-through process whereby, from the comfort of your office or your home, you can use your mobile device to access our financing seamlessly without having to come to the bank,” he stated.

Musa said the initiative forms part of the bank’s broader strategy to support agriculture, SMEs and underserved communities through digital channels and agency banking.

“Jaiz Bank has always been at the forefront of supporting agriculture and micro, small and medium enterprises,” he said, adding that the bank’s agency banking network would help extend financial services to rural communities across the country.

The chief executive also announced that shareholders had approved plans to raise an additional N150bn in capital as the bank seeks to expand its operations and strengthen its balance sheet.

He said the capital raise would likely be executed in two or three tranches after obtaining the necessary regulatory approvals.

“With this resolution today, we will move to the next step of appointing the transaction parties and obtaining regulatory approvals. We are looking at commencing the process immediately and achieving everything within this quarter, from July to September,” Musa said.

According to him, the fresh capital will enable the bank to finance larger transactions, particularly in agriculture, export trade, manufacturing and renewable energy.

Musa added that the bank would also channel part of the new capital towards food security initiatives, agricultural value chains, and alternative energy financing through its newly introduced alternative energy product.

The bank’s chief executive expressed confidence in the lender’s outlook despite global economic uncertainties, including geopolitical tensions in the Middle East and rising operating costs.

He said Jaiz Bank had adopted cost-saving measures such as migrating some branches off-grid, deploying inverter-powered facilities, and preparing to introduce electric vehicles into its operations.

“We are still very optimistic that, in spite of the elevated costs, we will see improvement in our cost-to-income ratio this year,” Musa said.

He disclosed that Jaiz Bank’s total assets rose by about 19 per cent to nearly N1.3tn in 2025, while customer deposits increased by more than 24 per cent to over N1.12tn. Profit before tax also grew by 28 per cent to N31.24bn during the period.

Musa further revealed that the bank currently operates 55 branches nationwide and plans to open 10 additional branches before the end of the year, bringing its network to 65 locations. The lender is present in 26 states and aims to establish a presence in all state capitals within the next two years.

He added that the bank also harbours ambitions of expanding beyond Nigeria within the next five years as it seeks to strengthen its position in the non-interest banking industry.

The PUNCH earlier reported that Jaiz Bank Plc recorded almost double the average gains in the stock market and the banking sector in the first four months of this year in a bullish run that highlighted investors’ confidence in the bank’s outlook.

Its year-to-date analysis at the Nigerian Exchange showed that investors in Jaiz Bank Plc saw the total value of their portfolios rising 106.6 per cent within the first four months of this year, compared with an average gain of 55.69 per cent recorded by the overall market benchmark and a 50.50 per cent average gain recorded in the banking sector.

The share price, which opened this year at N4.55 per share, closed the weekend at N9.40 per share, representing a net capital gain of 106.6 per cent.