Creditclan, a leading credit infrastructure startup has announced its pivot into the Buy Now Pay Later (BNPL) category which is now gaining momentum in the credit ecosystem across Africa. This follows a successful six-month trial period in which they switched from credit software as a service to the BNPL platform.
Creditclan is a BNPL platform helping banks, merchants, schools, and other businesses offer pay later option to consumers across Africa.
The startup focused on the often overlooked alternative channels for consumer credit during this time by building very strong technology and data anchors required for ecosystems like schools, merchants, hospitals, as well as partnering with financial institutions to offer consumers pay later options at their point of transaction.
Creditclan and Its Unique BNPL Approach
Creditclan uses a rich set of BNPL APIs to support both direct to market and embedded financing strategies. Creditclan provides a pure funding relationship with financial institutions, allowing them to obtain new clients at a cheap acquisition cost while still receiving a return on their balance sheet at the point of sale. Financial institutions can use the embedded play to connect directly to their current client channels and begin playing in the BNPL market without having to perform the grafting themselves. The credit infrastructure company uses its deep experience of the infrastructure market to offer a unique BNPL viewpoint that no other operator in the industry can match.
“We provide the channels to reach clients at their point of transaction,” explains Femi Bejide, CEO and founder, “using our cocktail of data points to achieve swift credit judgments, comparable to the tech we use to power many of the lending apps in the ecosystem.” As a result, banks and other financial institutions can collaborate on funding directly through our channels or through an embedded API infrastructure via their preferred terminals, mobile, web, or chat.”
Its Achievements So Far
To date, Creditclan has been able to onboard 4,000+ schools with its credit-for-good campaign, an increase of over 100 percent quarter over quarter. The company’s quick acceptance of its school-now-pay-later vertical has been fueled in part by a focus on parents who are underbanked or unbanked, with many parents able to pay their children’s fees on a weekly basis.
Furthermore, with over 7,500 merchants registered for the asset finance play during the period, up more than 50% year on year, the focus has been on partnering with micro to small scale businesses looking to scale their transactions with credit, a category that accounts for over 80% of businesses in Nigeria and across Africa.
Creditclan’s advantage, according to Soji Okunuga, CTO and co-founder, is its extensive expertise of credit from its Software-as-a-Service (SaaS) days previous to the pivot, when 100+ retail lenders and financial institutions used the lending management software, bank statement analysis, credibility engine, or collection service.
“We ethically dimension data from everywhere possible, especially alternative channels like social and psychometric tests, as well as cashflow, identity, and credit history analysis, which allow us to make decisions quickly within minutes even when there isn’t enough legacy data available for prospective consumers.” He explains. Our funding partners can then use 250+ analysis points to establish their eligibility preferences and make a disbursement decision at the point of transaction.”
Its Growth Targets
Creditclan believes it will easily reach 150,000 merchants by Q2 2022, due to a strong ground game, as many new businesses across many sectors begin to give pay-later options to their clients, resulting in a combined 93 percent acquisition rate across channels. During the same time frame, the firm will have clustered 20,000 schools, and Creditclan will look at additional channels pay later can be extended to, such as medicals, rent, and insurance, starting with Nigeria and expanding to other African countries, with the continuous partnership with banks.
“We’ve been operating in stealth mode so far,” Femi says, “and now it’s time to provide the results that will promote wider consumer credit adoption across the continent.” We believe that we are the startup that can assist close the gap in this $2 trillion market. We believe we have the technology, staff, and relationships in place to accomplish this.”