Jumia begins a new playbook by offering loans to customers in an evolving double play strategy; it has been offering loans to merchants for months now. Consumer lending will help Jumia improve revenue via interests. Also, there is a possibility to bring new customers and boost overall GMV in the Jumia platforms. If the loan default rate stays low, that could fix a key paralysis Jumia has been battling for years: profitability.
How? If the loans bring more customers and also deliver good interest rates, from an expanding pool of about 6.1 million customers, the derivable marginal value could help this company. No matter how you see it, Jumia is now a fintech and when you discuss Carbon (old Paylater), you need to mention Jumia One. Beginning with 6.1 million customers, Jumia One should be one of the leading fintechs in the lending space.
Provided Jumia avoids the old demon of giving people loans – those with no means to pay back – just for the sake of boosting sales, Jumia should be fine. A few years ago, some Nigerian banks ravaged their vaults, giving crazy people loans to boost their market caps; the parties were great until the DJs fell asleep!. Jumia must avoid such.
E-commerce company Jumia is extending its lending service to consumers in a move that suggests it is seeking ways to rapidly shore up revenue. In January, its Kenyan arm announced plans to begin offering as services on its platform to help advertisers target niche buyers on its platform. Jumia Nigeria has begun offering its customers quick, small, digital, personal loans via its lifestyle app Jumia One. For now, only its Android OS users can access the loans which can go as high as ?100,000 or US$275. Jumia’s lending platform isn’t exactly new but was previously open to its merchants alone.
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