Lagos-based fintech firm Bfree has secured $3.1 million in new funding from undisclosed investors, as it expands its work in buying and managing bad loans across Africa.
The latest funding comes after a series of earlier investments. In 2024, the company raised $2.95 million in equity led by Capria Ventures, with backing from firms including Angaza Capital, GreenHouse Capital, Launch Africa, Modus Africa, and Axian CVC.
The same year, TLG Capital provided a $3 million debt facility to support what both parties described as ethical microlending. Another $3 million came from the Verdant Capital Hybrid Fund. Altogether, Bfree has raised more than $12 million in funding since it was founded in 2020.
Bfree operates in a less crowded part of the fintech space. While many startups have focused on digital lending and buy-now-pay-later services, fewer have built systems to manage loans that are not repaid. This gap has often led to high default rates for lenders and harsh recovery methods for borrowers.
The company was founded in 2020 by Julian Flosbach, Chukwudi Enyi, and Moses Nmor. It was created as an alternative to aggressive debt collection practices such as public shaming and repeated harassment, which have drawn criticism in several markets.
Instead of using pressure tactics, Bfree applies machine learning to analyse unpaid loans. Its system studies borrower behaviour, estimates their ability to repay, and then suggests flexible repayment plans. Customers interact through automated tools such as chatbots and self-service platforms, and the company avoids penalties like late fees or blacklisting.
So far, Bfree says it has managed over $740 million in distressed loans, working with about 6.6 million borrowers across Nigeria, Ghana, and Kenya. It also serves more than 30 financial institutions, including digital lenders and traditional banks.
The new funding will mainly support Bfree’s move into buying bad loan portfolios directly. Rather than only offering software to lenders, the company is now purchasing non-performing loans and handling the recovery process itself.
This approach aims to solve a long-standing problem in Africa’s financial sector. Selling bad loans has been difficult due to poor data, unclear pricing, and legal challenges. For lenders, however, selling these debts can help clean up their accounts without long legal battles or full losses.
Bfree is working to turn these troubled loans into a more predictable investment opportunity. By combining its repayment prediction tools with a more respectful approach to customers, the company hopes to attract investors such as asset managers and hedge funds.
The firm is also exploring new technologies. Its engineering team, led by Konrad Pawlus and Yohan Theatre, is testing how blockchain and decentralised finance tools could make buying and selling debt easier.
This comes at a time when regulators across Africa are paying closer attention to digital lending. Countries such as Nigeria and Kenya have introduced stricter rules to protect borrowers from unfair treatment, pushing lenders to adopt safer and more transparent recovery methods.
Flosbach has said the company’s goal is to help borrowers recover financially while also supporting lenders. As economic pressures continue and more people struggle to repay loans, firms like Bfree are becoming an important part of Africa’s growing financial system.
