Lendsqr is solving the African credit problem

There’s no shortage of research to show how crucial consumer credit is to the average African and the economy.

Yet credit is difficult to access because big and established banks know that there are easier ways to make money than consumer credit; why give $1000 to 10,000 customers when you can give $10,000,000 to a single corporate client? It has fallen to innovative companies like Carbon, Fairmoney, QuickCheck, etc., to overcome most of the challenges associated with giving loans.

It has been a long and thankless journey for these digital lenders, and there’s no doubt that a few of them have made costly mistakes. Yet, what has differentiated them from the banks is using technology to address these challenges.

But the technologies used by the established digital lenders are often expensive to build and even more expensive to run. In addition to technology, these players also need the kind of expertise that money cannot always buy.

The cost, data, and expertise required to build a digital lending stack are significant barriers that smaller lenders cannot overcome.

Consider this; Fairmoney and Carbon disbursed over $120m in loans in 2020 alone. For example, the Nigerian market is way bigger and, at the minimum, $148 billion. Nigeria and Africa, in general, need hundreds of Carbons and Fairmoneys to serve the addressable market.

But if the technology to help digital lenders remains expensive, there isn’t any other way to scale lending without technology. It wouldn’t be unreasonable to say that the market potential would never be realized. And the growth of Nigeria, driven by accessible credit, may never happen.

Yet it is not all gloom. What if cloud technology was available to smaller lenders at a fraction of the cost? Instead of building their proprietary technologies, this platform would allow lenders to serve millions of borrowers at scale. It would provide algorithms for scoring, channels for getting borrowers, integrations to the vast financial ecosystem, etc.

We have seen the power of cloud and Software as a service (SaaS). Successful startups like Paystack and Flutterwave would not exist without the cloud and easy access to computing.

Lendsqr has cracked the lending code

In 2020, Lendsqr successfully pivoted to solve this problem, and by September 2020, their first lenders started reaping the benefits of superior but cost-effective clouding lending at scale.

Lendsqr built a cloud lending ecosystem to make lending a breeze. We call it an ecosystem because it’s more than just technology. With powerful, automated features, you can provide streamlined loan experiences for your borrowers; and access bank data that inform loan decisions

With the Lendsqr ecosystem, every single loan granted or rejected, every fraud detected or prevented, makes life easier and better for every lender; the platform learns, becomes better, smarter. The lenders become more profitable.

And what they are doing is not rocket science. Think about it like this; when you flag a spam email in Gmail, billions of email boxes get protected — it’s community immunity for players who otherwise would have to learn the hard way about people they should not give loans to.

This kind of advantage is great for every lender. They do not have to worry about size; with Lendsqr, there is no small player, and everyone gets the kind of protection available to the biggest players.