Is Fintech Fueling or Fixing the Credit Crisis?

Whether fintech is fueling or fixing the credit crisis: Here’s a story of two lives, two path, one system.

A story of two individuals navigating the same system, but with very different outcomes. 

What happens when the same system meant to support everyone ends up favoring one and failing another? One gaining privilege, the other enduring pain.

I still remember the sound of Justina’s tears falling into the silence of the compound the evening some guys seized her sewing machine.

It was her only means of survival to earn, feed and cater for herself, since her father died leaving her, two younger ones and her mother who hasn’t recover from the shock of her husband’s death. She took a loan that was supposed to help her buy more fabric, sew more clothes, and earn better. But things did not go as planned. The interest rates quietly crept up. They kept calling. And when she missed one payment, it was the beginning of the end. It was not a loan from a traditional bank. It was one of those quick, easy fintech apps. Where no collateral is required just her BVN and a desperate heart.

She lost everything. Not just the machine, she lost hope. Hope towards a better life and that of her younger ones.

It’s wasn’t up to three month of me witnessing this pathetic scene of Justina my neighbour, when I came across my childhood friends Justin in town when I went to visit my aunty.

Justin my childhood friend, just launched his business of a big tailoring shop in town. Of cause I attend the launching and celebrated with him since I was in town.  I later called to congratulate him again after a week and asked, how did he raise the money?

Fintech, he said with a wide smile I guess. He said no collateral, just his data and good history. They approved some money for him in hours, which he strategically plan out and opened his shop.

That day I sat by my window thinking and I asked myself are we really being helped or are we being hunted?

How is it that the same problem, access to credit loan broke one family and built another?

I began to ask questions.

Has Fintech come to fix the cracks in our credit system, or is it just painting over them with shiny apps.

At first it came as a HERO.  Promised speed, access, and a lifeline for those the banks ignored. But like every coin there’s the other side. Hidden interest rates, unending rollovers, threats, harassment and digital shame.

The Truth is Fintech has done both.

It’s fueling the crisis when:

• It’s came promising ease, no collateral, fast approval. Just your BVN.
• It offers loans too fast without educating people.
• The hidden charges are buried in simple terms and conditions.
• The credit scores punish the poor for being poor.
• The regulation is weak, digital literacy is low, interest rates climb like wild fire.

But in the other hand it’s fixing the crisis when:

• It gives a chance to someone like Justin who traditionally ignores the banks.
• It builds financial inclusion, letting the unbanked dream again.
• It uses technology to track spending, monitor all expenses each loaners make and offer advice.
• It’s promote responsible borrowing and offering possible ways and percentage to payback.
• People now have access to credit faster than ever, business owners are scaling, emergency needs are being met without begging.

Now the big question is, is Fintech fueling or fixing the credit crisis?

I will say the response to that will only depends on whose story you are listening to.

For Justina it came too late which for Justin it came just in time.

And maybe, just maybe, if we use it right I believe fintech can fix the credit crisis

1. If we make humanity the center of technology and choose compassion over exploitation.
2. If we build tools with empathy, transparency, and education Fintech might be the bridge between broken dreams and brand new beginnings.
3. If some fintech platforms choose the simple and nobler path.
4. If they build tools that educate, not just lend.
5. If they prioritize financial wellness over profit.
6. If they are concern about the right questions people should ask like: Can this person repay? Do they understand what they are signing up for?.

Because if we are going to fix this crisis, we need fintech with a heart.

Not just speed. Not just sleek apps. But platforms that understand humanity behind the numbers.

Are you moved by this story, share it.

Let’s keep the conversation going.

Let’s push for fintech that truly empowers not just digitize debt.