Is the Credit crunch biting hard into Nigeria's card market?

Credit Card Nigeria

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Posted by on Wednesday November 30, 2011 18:57:2:

A couple of years ago, many banks lauched the Nigerian credit card and they did this in collaboration with already established players in the card business like mastercard and Visa. Ecobank was the first to launch theirs. The issue with these credit card issued by Nigerian banks was that it was to be funded in US dollars and so customers were to source for dollars themselves prior to acquiring the master or visa card.
Recently, there is a global recession and the US, the world's biggest economy is officially in recession. The news was not too good for Nigeria since it came after oil prices slipped by more than 60%, a bleak US economy would then mean less spendings and hence less purchases of Nigerian crude oil. The effect was a global credit crunch as everyone had to reduce spendings due to increasing costs. Nigeria's forein reserver has already been drastically reduced to support the national budget and this has made the dollar really scarce since not much was coming in either. The price of the US dollars has risen sharply against the naira and the stock market has had losses for investors by a wide margin, this has caused many Nigerians to seek other means to access funds outside their stocks. Getting a credit card in Nigeria which is funded in US dollars is no longer as much in vogue now as it was before because the dollar has becomme extremely scarce ans expensive reaching to about N169 in the black market for about N135 from december 2008. One begins to wonder, can one really find a way to profit in the face of increasing costs of living in Nigeria


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