Skye Bank, travel agencies partner on financing
The Bank’s Head of Retail Banking Group, Mrs. Nkolika Okoli, who spoke at the unveiling of the partnership, in Lagos, said that the bank would provide financing for the customers to be able to buy their tickets and travel packages in good time to enjoy reduced fares.
According to her, the bank would provide 80 per cent of the travel cost while the intending traveller will provide just 20 per cent of the total travel cost at a minimal interest rate. Customers are expected to pay back their loan within a period of one year.
Speaking further, on the partnership, Okoli said because most people who travel in Nigeria are salary earners and small business owners in the middle income segment, they are wont to save up for their travel over a long period of time so end up buying their tickets two or three weeks to the date of travel.
“What this means is that they buy their tickets at a high price. But if you buy your ticket three or four months before your travel date, you may probably save 50 or 60 per cent of what the person who buys two weeks to his travel pays,” she said.
Okoli said the new partnership would enable travellers to get the best package, saying the essence of the new financing package is to encourage travellers to buy their tickets early enough to take advantage of low fare.
She noted that the existing practise where travel agencies sell tickets on credit and use their money to pay airlines is capable of eroding their capital and affect their operations since their margins are usually small.
Also speaking at the conference, the Managing Director of Dees Travels and Tours Limited, one of the partners, Daisi Olotu, commended Skye Bank for the innovative arrangement which has taken away from the agencies the risk of customer indebtedness over ticket.
Olotu said while the travel agencies must remit the ticket fares to the airlines within 14 days, travellers often buy ticket on credit and may not pay immediately, noting that Skye Bank has solved the agencies’ major problem.
Also, the Chief Operating Officer of Ajala.ng, Mrs. Omolua Nwoke said Skye Bank had taken away their major burden by making it possible for travellers to be able to travel and pay with convenience.
The General Manager of Tour Brokers International, Mrs. Odion Chigbufue, said the arrangement with Skye Bank enables her company to pay the airlines and their ground handlers without running the risk of clients default in paying for ticket
Okoli ended the briefing by calling on other travel agents to join the partnership to reduce the pressure placed on their cashflow by credit sales as this will have a direct positive effect on their trading margins through reduced cost of funds.