With the Buy now pay later (BNPL) category gaining momentum in the credit ecosystem across Africa, leading credit infrastructure startup, Creditclan, yesterday announced its pivot into the BNPL space after a successful six months beta period wherein they transitioned from credit software-as-a-service to BNPL platform.
During this period, Creditclan focused on the usually overlooked alternative channels for consumer credit, by building very strong technology and data anchors required for ecosystems like schools, merchants, hospitals, etc, while partnering financial institutions to offer pay later opportunities to consumers at their point of transaction.
A unique BNPL approach
Creditclan adopts both the direct to market approach and the embedded finance play driven by a robust set of BNPL APIs. For the former, Creditclan offers a pure funding relationship with financial institutions, which are able to gain new customers at a low acquisition cost, in addition to a return on their balance sheet deployed at consumer’s point of transaction. With the embedded play, financial institutions can plug in directly to their existing customer channels and start participating in the BNPL space, without having to do the grafting themselves. Creditclan leverages its clear understanding of the infrastructure play to provide a very different BNPL angle, unoffered by any other operator in the space.
“We create the channels to reach customers at their point of transaction” Femi Bejide, CEO and founder explains, “using our cocktail of data points to reach quick credit decisions, similar to the tech we use in powering many of the loan apps in the ecosystem. Consequently, Banks and other financial institutions can partner on funding directly through our channels or as an embedded API infrastructure through their preferred terminals, mobile, web or chat”.
Success so far.
With its credit-for-good initiative, Creditclan has been able to onboard 4,000+ schools to date, with a number that has grown by over 100% quarter on quarter. This rapid adoption of its school-now-pay-later vertical has been driven largely by focusing on parents profiled as underbanked or unbanked, with many parents even enabled to pay their children’s fees weekly.
Also, with about 7,500 merchants registered during the period for the asset finance play, and growing more than 50% MoM, emphasis has been to partner with the micro to small scale businesses looking to scale their transactions with credit, a usually ignored category which accounts for over 80% of the businesses in Nigeria and across Africa.
Soji Okunuga, CTO and co-founder, believes Creditclan’s advantage is its deep knowledge of credit from its Software-as-a-Service (SaaS) days prior to pivot, with 100+ retail lenders and financial institutions using either the lending management software, bank statement analysis, credibility engine, or collection service.
He explains, “We ethically dimension data from everywhere possible, especially alternative channels like social and psychometric tests, in addition to cashflow, identity and credit history analysis, which enable us make decisions quickly within minutes even when there isn’t enough legacy data available for prospective consumers. Our funding partners can then build their eligibility preference from 250+ analysis points to reach disbursement decision, all at the point of transaction”
Driven by an aggressive ground play, Creditclan believes it will easily reach 150,000 merchants by Q2, 2022 as many new businesses across multiple sectors begin to offer pay-later options for their customers, consistent with a blended 93% acquisition rate across channels. During the same period the startup will have clustered 20,000 schools and, with the continued partnership with banks, Creditclan will look at other channels pay later can be extended to, like medicals, rent, insurance, starting with Nigeria and extended to other African countries.
“We have gone very stealth mode so far”, Femi heartily says, “it is time to really deliver the results that will drive further consumer credit adoption across the continent. We believe we are that startup which helps bridge the gap in this $2tr addressable market. We believe we have the tech, team and partnerships to do so.”
Creditclan is a BNPL platform helping banks, merchants, schools, and other businesses offer pay later option to consumers across Africa