AltBiz holds a distinction no other product in Nigerian non-interest banking can claim: you can calculate exactly what it costs before you ever speak to the bank. In a market where every competitor prices behind the branch door, The Alternative Bank put its entire SME facility grid on the public page. That alone makes AltBiz the reference product for the whole segment, and this review takes its numbers apart accordingly. All terms verified from the bank's business pages, August 4, 2026.
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The published grid
| Term | Detail |
|---|---|
| Maximum facility | N5,000,000 per business, capped at 20% of annual turnover |
| Markup | 15.5% flat per annum |
| Insurance | 3% per annum |
| Commitment deposit (Hamish) | 20% of the facility amount |
| Maximum tenure | 24 months |
| Repayment cycles | Monthly, quarterly, 90-day or 180-day |
| Use of funds | Strictly raw materials, stock or equipment; never services |
| Eligibility | 1 month TAB corporate relationship, CAC registration, 12 months of statements, 2 years' business existence |
How the structure works
AltBiz is markup purchase finance with real Murabaha discipline: the bank pays your suppliers directly for raw materials, stock or equipment, on what its page calls a we-pay-you-take basis, and you repay the fixed cost-plus obligation over the tenure. Cash never lands in your account, and services can never be financed, which is precisely the constraint that keeps the facility asset-backed rather than a disguised loan. The markup is fixed for the tenor, so late payment cannot compound the debt. The 20% Hamish is a recognized Islamic risk-management deposit, insurance runs through the bank's takaful arrangements, and the whole shelf sits under AltBank's signed, FRC-numbered annual Shariah certification by Shaykh AbdulKader Thomas, Hon. Justice AbdurRaheem Ahmad Sayi and Shaykh Abubakar Muhammad Musa, the strongest such disclosure in the market.
The effective cost, computed honestly
The headline is 15.5%, and the truth is higher, for three compounding reasons the bank at least gives you the inputs to calculate. First, flat means flat: 15.5% is charged on the original facility amount for the full period, not on the reducing balance, so as you repay, the effective rate on what you still owe climbs well above the headline. Second, insurance adds 3% per annum on top. Third, the Hamish drag: 20% of the facility sits locked as a deposit, so a N5 million facility puts roughly N4 million to work in your business while the markup and insurance are priced on the full N5 million. Stack the three effects and the effective annual cost on working funds lands meaningfully above 20%, plausibly toward the mid-twenties depending on your repayment cycle. That is still competitive in this market: the same bank's equipment lease runs a published 30% per annum, and Jaiz's only published retail markup is 28-30%. But quote AltBiz to yourself at its effective cost, not its headline, and check it against the gross margin on the stock being financed.
The guarantee clause that needs a lawyer
Requirements include a personal guarantee supported by a sworn statement of net worth and an undated cheque. The undated-cheque practice is common in Nigerian SME lending and legally contested territory; understand exactly what you are signing, what triggers presentation, and what your exposure is if the business stumbles. Ten minutes of legal advice before signing is cheap against that clause.
Strengths and weaknesses
- Strength: full public pricing, unique in the segment, making real cost-modeling possible before application.
- Strength: genuine asset-backed discipline; funds only buy goods, paid straight to suppliers.
- Strength: repayment cycles from monthly to 180 days that can match real trading rhythms.
- Strength: turnover-linked cap (20% of annual turnover) as built-in overextension protection.
- Weakness: the N5 million ceiling is small for manufacturers and import-heavy SMEs.
- Weakness: effective cost sits well above the 15.5% headline once flat-basis, insurance and Hamish are counted.
- Weakness: two years' business existence and twelve months of statements exclude young businesses.
- Weakness: the undated-cheque personal guarantee deserves careful legal reading.
Verdict
AltBiz wins the segment on honesty and holds its own on substance: real Murabaha mechanics, sane caps, flexible cycles. Whether it wins on price depends on the quotes its unpublished competitors give you, and that is exactly how to use it: as the written benchmark you place on every other SME desk in Nigeria. The competing products are mapped in our complete SME finance guide, the equipment sibling in the Ijarah equipment guide, and the mechanics in Murabaha working capital.
Frequently asked questions
What does the 20%-of-turnover cap mean for my application?
It sizes the facility to your evidenced sales, not your ambition: a business with N15 million of annual banked turnover tops out at N3 million regardless of the N5 million ceiling. Two practical consequences: your twelve months of statements are effectively the application, so route real turnover through bankable channels well before applying; and the cap is per business, which for growing SMEs makes AltBiz a working-capital tool rather than an expansion instrument. For bigger equipment tickets, the same bank's AltLease runs to N20 million on published terms.
Is the Hamish refundable, and what does it actually do?
The Hamish is a commitment deposit securing your obligations: 20% of the facility held by the bank, standard practice in Islamic finance as earnest-money security rather than a fee. The published page does not detail its release mechanics, so get them in writing: when it returns, whether it can offset final instalments, and what defaults allow the bank to apply it. Whatever the mechanics, its economic effect is certain and belongs in your cost model: a fifth of the facility is idle while the margin prices on the whole.
Can I repay early and save anything?
The markup is fixed and flat, so there is no automatic interest-style saving from early repayment; whether AltBank rebates any portion on early settlement is policy the public page does not state. Ask before signing, in writing. If the answer is no rebate, factor it into cycle selection: a facility you expect to clear in nine months should be written as a nine-month facility, not a 24-month one you repay early while carrying 24 months of flat markup.
How does AltBiz compare with TAJ's Murabaha for Traders?
They serve adjacent niches: MFT is faster-cycle (90 days), collateral-light, and reaches unincorporated traders, with the margin unpublished; AltBiz is longer (to 24 months), demands CAC registration and two years of history, and publishes everything. A registered trader who qualifies for both should literally price them against each other: get MFT's margin quoted as an annualized figure and put it beside AltBiz's computable effective cost. An unregistered or younger trader has the choice made for them: MFT or the microfinance layer.
Compare providers in your state
See side-by-side comparisons of Shariah-compliant products, or let our matcher recommend the best options for your situation.
What does asset-only disbursement mean for my cash flow?
It means the facility never touches your account as cash: AltBank pays your supplier against invoices, and you receive goods, not money. For inventory businesses this is a non-issue and arguably a discipline. For businesses whose real squeeze is payroll, rent or services, AltBiz simply does not solve the problem, and stretching invoices to fit will end badly at audit. Map your actual cash needs to the structure before applying: if most of your working capital gap is goods, AltBiz fits; if it is operating expenses, you need a different conversation entirely.