How to get your USSD code as a lender in Nigeria

With limited telecom infrastructure in Nigeria and many parts of Africa, bringing financial services to everyone is a huge challenge. That’s where USSD code for lenders has become truly indispensable. It has become essential for banks, lenders, and anyone looking to reach a wider customer base.

USSD stands for Unstructured Supplementary Service Data. It has been around since the beginning of GSM technology. Interestingly, it wasn’t originally designed  for financial services or to carry information.

It was initially designed to carry unstructured data between GSM terminals and back end. But banks and fintechs got creative and turned USSD into a powerful tool. 35% of all bank-to-bank transfers in Nigeria happen through USSD. That shows how widely used and reliable it is.

As a lender, your USSD code could be a great way to connect with customers, especially those in areas with less reliable internet access. On Lendsqr today, lenders can activate USSD for themselves, and we can help them reach millions of customers at scale.

So, how do you get your own USSD code in Nigeria?

There are two main ways to go about it.

Route 1: The DIY approach

You can get a dedicated USSD code for your company  (like *1234#) directly from the Nigerian Communications Commission (NCC). 

Just be aware: the short three-digit codes are all gone, so you’ll be looking at four digits these days. If you’re in financial services, there’s a hefty fee of around 10 million naira involved.

To apply for a short code at the Nigerian Communications Commission (NCC), you need to follow these guidelines:

1. Fill out the Application Form for Short Code (Form STDS/003) available on the NCC website.

2. Attach the following documents with your application form:

• Proof of payment for the application form and processing fee of N 1,000 and N 10,000 respectively, payable via the eservices portal ([email protected]) in favor of the Nigerian Communications Commission.
• Passport-sized photographs of the two authorized representatives of the company and company seal.
• Operating License Validity period(s) and Amount Paid.
• Network Architecture showing how you intend to connect with the network operators.
• Utilization plan of previously allocated short code range if any.
• Evidence of payment of N 1,000 for Application form and N 10,000 processing fee payable via eservices portal ([email protected]) in favor of the Nigerian Communications Commission.

You can read more on the guidelines here. Note that these guidelines are subject to change from time to time, and applicants should always check the NCC website for the most recent information.

You need to have a Value Added Services (VAS) provider, such as cloud interactive services, e.g. Qrios, VAS2Nets. These cloud interactive services will handle the technical aspects of integrating your USSD code after you’ve gotten an approval from the NCC.

USSD traffic is charged as sessions. A session is usually 20 seconds. The cost of these sessions would be a negotiated amount with the telcos. Usually, the cost is charged to the customer making the USSD call. However, banks or larger lenders might choose to cover the cost themselves. 

Please note that USSD code cost may be significant for lenders with a large customer base; they could be as high as N21 per minute.

Route 2: With the help of Value Added Services Providers (VASPs)

If you don’t have the time, money, connections, or expertise to get your own dedicated USSD code, there’s another solution: Value Added Service Providers (VASPs).

These companies specialize in providing USSD access. Here are a few popular examples along with their codes:

• HollaTags
• VAS2Nets: *565#
• Infobip: 97270
• Africa’s Talking: *384* for postpaid mode, *483* for prepaid mode
• Interswitch: *723#

VASPs offer subcodes, allowing you to quickly access USSD functionality without setting up your own infrastructure.

Whichever one you choose, just know integrating them with Lendsqr loan management software is simple. We’ll simply do some custom integration and you can start reaching customers at scale.

A few things to consider with USSD code for lenders:

USSD codes might seem like a quick solution, but there are some important limitations to keep in mind:

1. Limited interaction: USSD codes have character limits and timeouts. You can’t ask your users a ton of questions, and they have to be quick about responding.

2. Costly: USSD codes aren’t cheap. If you’re using a platform like HollaTags, you’re looking at 7 naira per session. That adds up fast, especially if a user needs to go through multiple steps.

3. No  input validation: USSD offers no way to ensure data accuracy. You can’t ask a user to confirm their email address, for instance. This means your engineers need to build in extra checks to handle potential errors.

Dial *LendsqrHelp#

If you’re seriously considering USSD codes for your lending business, it’s definitely worth having a chat with us. We’ll guide you through the whole process. Simply reach out to us at [email protected].