CredPal Raises $15 Million In Debt Equity Financing To Expand Into Ghana And Kenya
CredPal raises $15 million in debt equity financing to expand into Ghana and Kenya
CredPal, a digital lending startup, announced a $15 million debt financing led by Greenhouse Capital, with participation from a number of unnamed financial institutions as well as new investors LongCommerce, Uncovered Fund, First Circle Capital, and Adii Pienaar, co-founder and former CEO of WooCommerce, among others.
CredPal provides online payment options such as Buy Now, Pay Later, and Bill Me Later (BNPL). Small sums ranging from 2,000 Naira to 5 million Naira are available to customers through an instalment and flexible payment model, allowing them to access funds quickly.
It raised a total of $15 million in debt and equity to fund the expansion of its consumer credit offerings throughout Africa. Additionally, it has formed strategic alliances with other major platforms and is in the process of acquiring telecom operator Airtel. The new investment round consists of a combination of equity and debt financing to support the company's expansion into additional African markets, primarily Kenya, Egypt, Ghana, and Cameroon, according to the company.
This latest round of funding follows a $1.5 million raise in 2020, which was followed by another $1.5 million in 2019.
CredPal was founded in the year 2017. (However, the site only became fully operational in 2018). It has made short-term loans readily available to customers, and it has partnered with merchants in a variety of industries to provide working-class Nigerians with the ability to buy, eat, lounge, travel, and pay later while still earning a living.
Over 12,000 merchants provide customers with the option to shop, take advantage of discount and cashback offers while still having the option to pay later. With the goal of facilitating consumer credit access across all payment channels, the startup hopes to achieve its mission and become Africa's largest consumer credit brand.
Fehintolu Olaogun, CEO of CredPal, explained the company's position in the growing BNPL Fintech competition by highlighting the company's uniqueness as an omnichannel approach to BNPL banking.
What is the significance of BPNL?
Due to the establishment of BNPL platforms in the Nigerian market, traditional Nigeria loan schemes are being phased out. This is a significant win for the country, especially given the country's growing population, inflated economy, and almost non-existent purchasing power, not to mention the fact that our minimum wage remains at 33,000 Naira ($79.37).
Because of this disparity, the Nigerian National Petroleum Corporation (BNPL) has emerged as a viable payment option for the average Nigerian consumer.
However, despite the fact that this type of payment plan has been available for years, its popularity skyrocketed during the pandemic as more people shifted to online shopping and others found themselves unable to purchase necessities.
The operation of BPNL's systems
On past-due balances, BNPL does not charge interest at all. Credit scores are determined by comparing customers' monthly income and expenditures, resulting in a straightforward approach to repayment options for customers with poor credit scores
During the checkout process, you'll have the option to break up your total purchase and pay a smaller amount now rather than the entire balance.
Suppose your total purchase is 70,000 naira; you will pay 10,000 naira at checkout; they may have three additional 20,000 naira payments due at intervals of 30 days each. Provided you make all of your payments on time, you should be able to pay off your purchase within three months.
If, on the other hand, you're having trouble paying your bills or saving for an emergency, you should avoid buying now and paying later. It is possible to overspend when using BNPL because of the ease and convenience of the service. You run the risk of accruing significant late fees or being referred to collections, both of which will have a negative impact on your credit score.
The CredPal Solution
CredPal is one step closer to establishing a more secure, innovative, and affordable way for people to borrow money without having to worry about late fees or exorbitant repayment prices as a result of this new round of funding.
Following this concept, CredPal is looking to partner with telecom operator Airtel Nigeria in order to expand its product offering and geographic reach, allowing low- to middle-income earners to purchase smartphones in monthly installments, as well as other products and services.
