AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Nigerian banks give overdrafts mainly to salary earners whose pay goes into the bank and to businesses with steady account turnover. You apply through your branch or relationship manager, and interest is charged only on the amount you actually use, usually calculated daily. Standard Chartered Nigeria, for example, offers up to 50% of net monthly salary at a stated 2% per month on the utilised amount (Oct 2026).
An overdraft lets your current account go below zero up to an agreed limit. It is the most flexible form of bank credit: you draw when you need it, repay when money comes in, and pay interest only for the days you are overdrawn. It is also easy to misuse, because a limit that is always fully drawn is just an expensive loan. For how it compares with other products, see term loan vs overdraft vs revolving credit.
Who qualifies
Salary earners
Personal overdrafts are tied to salary. Standard Chartered Nigeria’s personal overdraft page (Oct 2026) sets the limit at a maximum of 50% of net monthly salary, subject to a single obligor cap of ₦1.8 million, and requires you to move your salary account to the bank or open a payroll account with an employer letter confirming the move. The overdraft is activated after your first salary credit and your acceptance of the offer. Other banks run similar products, sometimes called salary advance; Ecobank lists its Salary Advance as a 30-day overdraft (Ecobank, Oct 2026).
Businesses
Business overdrafts are sized on account turnover and cash flow. Stanbic IBTC’s business overdraft page (Oct 2026) lists what it wants:
- Application form, management CVs and company profile
- Valid ID for each director and signatory
- A statement of what the facility is for
- Three years of financial statements, where available
- Personal asset and liability statements for directors or partners
- A cash flow forecast showing how you will repay
- 12 months of bank statements
Larger business limits usually need security; see what collateral banks accept.
How overdraft interest is charged
Overdraft interest is charged on the drawn balance, not the limit. Stanbic IBTC says you “only pay interest on the amount you use”. Standard Chartered says interest accrues daily on your average daily balance over a 365-day year, at a stated 2% per month on the utilised amount, variable with at least 30 days’ notice (Oct 2026). Interest is normally debited monthly.
Worked example
Using Standard Chartered’s published 2% a month (24% a year) as at October 2026, suppose you have a ₦200,000 limit. You are overdrawn by ₦150,000 for 10 days, then by ₦50,000 for 20 days after part of your salary lands.
| Period | Calculation | Interest |
|---|---|---|
| 10 days at ₦150,000 | ₦150,000 × 24% × 10 ÷ 365 | ₦986.30 |
| 20 days at ₦50,000 | ₦50,000 × 24% × 20 ÷ 365 | ₦657.53 |
| Total for the month | ₦1,643.84 |
If you had stayed ₦150,000 overdrawn for the full 30 days, interest would be about ₦2,958.90. Paying in early cuts the cost. Check your own bank’s rate, which may differ.
Fees and charges to ask about
- Management or arrangement fee: Standard Chartered says none on its personal overdraft; other banks charge one.
- Late fees: Standard Chartered adds a 1% flat monthly fee if your salary is delayed by more than seven days.
- Charges if you go over the limit.
- Renewal: overdrafts are usually for 12 months and renewed if the account has run well.
- Automatic repayment: at Standard Chartered any credit into the account settles the overdraft first.
Mistakes that make an overdraft expensive
- Staying fully drawn. If the balance never returns to credit, you are paying overdraft rates on what is really a term loan. A term loan or salary loan may be cheaper for a fixed need.
- Ignoring the renewal date. At renewal the bank reviews how the account has run. A limit that was used heavily and rarely cleared may be cut or not renewed, and the full balance then becomes due.
- Forgetting other debits. Bank charges, card fees and standing orders can push you over the limit and trigger extra charges.
- Moving your salary. A salary-based overdraft depends on salary credits. If you move your salary to another bank, the overdraft usually has to be cleared first; see switching your salary account.
Steps to apply
- Make sure your salary or business income goes into the account you want the overdraft on.
- Ask your branch or relationship manager for the overdraft application and document list.
- Submit ID, payslips or an employer letter (personal), or the business documents above.
- The bank checks credit bureau reports and your account history.
- Read the offer: limit, rate, fees, renewal date and security. Accept in writing.
- Use the limit for short gaps and bring the account back to credit regularly.
If you only need a few days’ cover, compare an overdraft with a short loan in our guide overdraft vs loan app.
Where Pryme fits
Pryme does not offer overdrafts. For everyday spending with merchants, Loans on Spaces, lent by Solid Allianze MFB, may be offered based on how your account is run; you see the full agreement and accept before drawing. Our comparison of Loans on Spaces and an overdraft explains which suits which need.
Questions people ask
How do I qualify for an overdraft in Nigeria?
Usually by having your salary paid into the bank or, for a business, by showing steady account turnover. The bank checks credit bureau reports and sets a limit based on your income.
How is overdraft interest calculated in Nigeria?
On the amount you use, typically calculated daily and charged monthly. If you are overdrawn for only a few days, you pay interest only for those days.
How much overdraft can I get on my salary?
It depends on the bank. Standard Chartered Nigeria, for example, offers up to 50% of net monthly salary, subject to a ₦1.8 million cap (Oct 2026).
Do I need collateral for an overdraft?
Salary-based personal overdrafts usually rely on your salary rather than collateral. Larger business overdrafts often need security.
Sources
- Standard Chartered Nigeria: Personal Overdraft · accessed Oct 2026
- Stanbic IBTC: Business Overdraft · accessed Oct 2026
- Ecobank Nigeria: Loans · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.