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# Why Do African Banks Lend So Little?
March 18 2022
Written by David Leonard.
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MONEY MATTERS - Covid-19 has caused a banking crisis to occur throughout the world.
The countries that are considered to be well off were hit first, then the backlash slowly trickled into the remaining countries. Africa was hit just as hard as the rest of the world, but now the continent sits in the [middle of a clinandrium](https://www.gov.uk/research-for-development-outputs/why-do-african-banks-lend-so-little) that will not be easy to climb out of.
The people trying to get loans claim that the banks are refusing to approve applications, which causes the community to reverse back into a recessive state. On the other hand, you have the banks claiming that there are no good applicants that have good credit.
Credit is hard to build when you are struggling to survive. Small businesses are barely able to keep their doors open, let alone expand and make changes to work around the pandemic and all the regulations that have become commonplace.
The good news is that bankers in every area are starting to pull themselves up out of the recession and are finding ways to work around the covid-19. Like most industries more online platforms have been formed to help people use online services, effectively preventing the need for customers to leave the security of their own homes.
Restrictions are still in place when it comes to getting bank loans. They are even more strict than they once were due to all the defaults on loans that African banks have had to deal with. They are in the business to make money, so if you are not up to their criteria you will not be able to secure the loan.
There are a couple of things that you should keep in mind when applying for a loan. All the banks will ask questions and require some specific information from you. Before choosing a bank to go through though, check out an online site that will [compare personal loan](https://www.iselect.com.au/personal-loans/) for you, and then follow these quick tips before you apply.
- Your employment status is one of the first things that the bank will look at. You must have had a job for at least six months. A job that is permanent and stable.
- They will also check your bank account. If you are able to always keep a substantial amount of money in your account, you will be a lower risk for the bank because they can see that you do not suffer from money issues, like many people do.
- The bank lender will want to make sure that you can afford to pay back the loan. They will go over all your details to verify. Your income to debt ratio is one of the biggest aspects of your life that they will look at.
- Your credit score is something that you have had pounded into your head while growing up. It is as important as you have been told. The higher the credit score, the better chance that you have of getting financial help.
Getting a loan in Africa has been hard through the last few years because the economy has decreased substantially due to the worldwide pandemic. Unfortunately, banks are one of the main reasons that society is still suffering because they can control the flow of money. Banks that are willing to stick their necks out to help people recover may find themselves losing money at first, but in the end will help the community grow back to economic levels that the nation once had.
If bankers continue to refuse loans, people will be held back from reaching their full potentials. Working together, bankers and consumers, will be the only way to turn the economy around. Loans would help the process immensely, but who can blame the banks for wanting to be secure with the knowledge of loans being paid back, on time every month. Loan applications need to continue being submitted and lenders need to continue processing them, allowing more to be awarded so the entire economy can come back up.
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