- Zeeh Africa, a Nigerian-based open banking company, has launched its loan recovery solution built on Global Standing Instruction (GSI) technology.
- According to the fintech, the system allows lenders to automatically and directly recover funds. Recurring payment collection is another application for Zeeh’s feature powered by GSI technology.
- “The GSI technology will address the challenge of loan repayment for lenders in Nigeria and beyond and will serve as a robust last-resort system, enabling connected lenders to directly debit accounts of loan defaulters in other banks,” Zeeh said.
Frank Uwajeh and David Adeleke (CEO) founded the company in 2022 to empower individuals, businesses, and financial institutions to gain access to financial data and insights. Now, it is adding loan recovery solutions to its offerings.
Following the launch of the new tool, Adeleke stated that the system it has built will help reduce non-performing loan rates.
Borrowers can use the “Direct Debit” feature to authorise debits from their primary bank account. If there are any issues with payment processing, such as no debit or partial debit, the system uses the GSI feature to ensure that the payment is still completed.
Zeeh explained that with the GSI solution, businesses will have access to control features that allow them to initiate, pause, or stop ongoing debits. It also promotes transparency, flexibility, automation, and user engagement.
But first, borrowers must use their Bank Verification Number (BVN) to authorise the process. This BVN serves as their unique bank account identification number. They also connect their other accounts so that the system can see their financial information, allowing any issues and payment recovery to be handled more efficiently.
In July 2020, the Central Bank of Nigeria issued the Guidelines on Global Standing Instruction (GSI)- Individuals to promote the country's financial systems and improve loan recovery rates. The GSI is used to recover overdue payments from the borrower's bank accounts, minus penalties, to cover the outstanding principal and interest.
Citing Global Standing Instruction (GSI) and other factors, the CBN reported in 2022 that the average non-performing loan ratio fell from 4.9 to 4.2.
