ANNOUNCING OUR $240,000 PRE-SEED ROUND
A year ago, Lionel and I set out to build what we hoped would be the “Credit karma for Africa”
That plan didn’t go so well.
After we launched the first version in December 2021 and onboarded a few hundred users in the first two weeks; we quickly realized, as with most consumer-focused startups, it requires a high cost of acquisition and would require a lot more to retain the users.
So, we pivoted to building the credit assessment infrastructure for lending businesses in Africa. A platform that will enable both digital and traditional lenders reliably verify identity and assess the creditworthiness of potential customers.
Prior to this, I founded MicroMoni in 2019, a lending startup that provided micro-loans to MSMEs. At the time one of our biggest challenges was high NPL due to limited credit information. For every 10 loans we disbursed, 4 - 6 of those loans came back as bad loans and this immensely affected our ability to disburse more loans.
According to the Bureau of Statistics, in 2018, financial institutions lost over $4B to chronic loan defaulters.
“In Kenya, an estimated 3.2 million people — 6% of the population, have been blacklisted on Kenya’s TransUnion credit reference bureau for non-repayment of digital credit loans.
In Nigeria, it is not unusual to hear of customers who take loans from 3 to 5 lenders simultaneously and then disappear into thin air. These sorts of audacious schemes and a general unwillingness of customers to pay loans continue to overwhelm lenders. “
This is mostly because;
- Existing credit bureaus have a high barrier to entry and are therefore inaccessible to the average Nigerian business.
- Most low-income consumers aren’t captured in the formal banking system; hence limited historical data on underbanked consumers.
There’s inadequate financial information for credit assessment.
Today, there are more than 500 fintechs and a lot more traditional lending businesses across the continent. Many of these businesses provide lending and Buy Now Pay Later solutions but do not have a reliable robust platform for Identity verification and Credit assessment of their customers. This is the gap that we are filling at Creditchek.
We offer three product features that digital lenders can integrate into their applications or websites and a no-code platform for traditional less savvy businesses to use;
Income Insight — This feature uses bank-verified historical transactional data to assess the user’s financial status, get key insights on cash flow & ascertain income to determine appropriate financing.
Credit Insight — This feature leverages historical credit data from multiple sources to give key insights into the borrower’s credit and debt status.
Identity — This feature enables businesses to unearth the true identity of their customers by leveraging BVN, NIN and other real-time sources.
In April 2022, we launched our MVP in beta, testing with a few businesses and making iterations. While in Beta, we onboarded 30 businesses, processed thousands of API calls, and eventually came out of Beta in June 2022.
As coconut heads; we continue to be stubborn on our vision as financial inclusion advocates but flexible on our mission. Our vision is to be the most reliable credit infrastructure in Africa in the next 5 years, fostering trust between lenders and borrowers.
In furtherance of that vision, we are pleased to announce that we’ve raised $240,000 in pre-seed funding led by Atom Capital with participation from Aidi Ventures, Ham Serunjogi of Chippercash, Olumide Ogunsanwo of Adamantium Fund, Damola Adegboyega of Assembly Investors, Isaac Ewaleifoh of Launch Africa Ventures and Ogundiran Kayode.
Lionel and I are grateful to our early beta customers who endured with us through several iterations, investors who believed in us early, partners and our awesome teammates for believing in us and coming aboard to drive the vision.
Stay Safe, Stay Jiggy.
Kingsley Ibe