Nigerian startup BFREE, which focuses on improving consumers’ financial health through a tech-enabled, credit management solution, has raised a $800,000 seed funding round to help it scale.
The Lagos-based BFREE was founded last year by Chukwudi Enyi, Moses Nmor and Julian Flosbach, and already manages more than 300,000 customers for the majority of leading lenders in Nigeria.
The startup’s credit management solution aims to incentivize consumers that have fallen behind on their credit repayments to sustainably clear their balances by deploying a combination of self-servicing solutions, communication automation, and human operations, supported by machine learning algorithms that cluster and predict customer behaviour. This results in higher recovery rates for lenders and a better customer experience for borrowers.
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BFREE has now raised US$800,000 in seed funding to help it expand operations, with the round led by Nigeria-based Beta.Ventures alongside Launch Africa Ventures and GreenHouse Capital.
“Inefficiency and lack of transparency of collections are not unique challenges to digital lenders and also not peculiar to Nigeria. We see significant use cases among other customer verticals with digital products such as commercial and microfinance banks, embedded finance solutions, like buy-now-pay-later, credit cards, and even tax payments at some point. Basically, everywhere where value is owed, our solutions can be deployed. Here, we also don’t just build a solution for Nigeria, but a solution that can be potentially used in every emerging market with a challenging infrastructure for collections,” said Flosbach.
Ike Eze of Beta Ventures said he was excited to help grow the first ethical credit management company on the continent.
“Efficient and user-friendly credit collection is an essential part of the credit value chain. BFREE is essential for the existing credit market, and it opens the door for significant credit deepening in Africa and any other emerging market,” Eze said.
“The team is highly experienced in lending and is now solving a problem that they once faced themselves, which is something that we like a lot in founders.”
Bunmi Akinyemiju, founding partner of GreenHouse Capital, said his company knew the challenges around collections first-hand.
“Within a few months, BFREE has been launching product after product and now already achieves 60 per cent of total collections via non-human activities, gradually taking the risk of human liability out of the collections process,” he said. “They are innovating at a point in the lending value chain that has been broken and long ignored. Their goal is to make collections more efficient and data-driven, and this is the essence of the role of a tech startup.”