Here’s why loan apps request for your BVN. Your BVN is your Bank Verification Number. Every individual above 18 who owns a Bank account is expected to have a Bank Verification Number that is linked to all their bank accounts.
You must have noticed that a lot of platforms request for your BVN when you request for a loan from them. Is it possible to get loans without divulging something as sensitive as your BVN? Why exactly do they request for your BVN?
The Bank Verification Number commonly called BVN is a biometric identification system implemented by the Central Bank of Nigeria to curb or reduce illegal banking transactions in Nigeria.
It is a modern security measure in line with the Central Bank of Nigeria Act 1958 to reduce fraud in the banking system.
This works by recording the Biometric data (that is the fingerprints and the Facial photograph) of the individual and linking this to their banking information.
This BVN helps to give every Bank customer a unique identity across the Nigerian Banking industry that can be used for easy identification and verification at every Point in Banking operations.
What are Online Loan Apps?
Now, Loan Apps are organizations or platforms that have been set up to provide credit, that is to borrow money to other individuals or organizations in expectation of a repayment usually with a percentage of interest and a repayment plan.
This means they provide you with an amount of Money that you are to repay with some interest (if any), over a given period of time.
In time past, to get loans was a real hassle, involved a lot of paperwork and often led to the loss of property for a lot of individuals.
These Loan Apps have worked to bring this credit closer to individuals and eliminate a lot of the hassle and paperwork and allow more regular people get to these Loans.
There are a lot of Loan Apps available today and they all require your BVN to approve your Loan.
Why do Online Loan Apps Request for your BVN?
The Loan Apps require your BVN in order to ensure that they can get their payment. For platforms that are invested in supplying Credit to the general public, it is important to have security for the funds that they remit to individuals. It is for this reason that these apps will not give out funds without your BVN.
Since the BVN is linked to all your Bank details, these Loan Apps retain the right to report and submit your BVN and corresponding details to the Central Bank of Nigeria who will in turn blacklist your BVN and prohibit you from further access to loan services.
Your BVN helps the Online Loan Apps to verify that you aren’t blacklisted and so Loans will not be issued without it. This Verification Number request is therefore a security measure more than anything else.
A few platforms actually give out Loans without BVN but they remain very few and hard to come by.