With BNPL Becoming More Popular In Africa, Nigeria’s CredPal Raises $15 Million In Debt And Equity To Scale Its Offering

Founders of CredPal

Around the globe and now in Africa, buy-now-pay-later (shortened as BNPL) has become more popular thanks to the growing demand for them. Startups are known generally to solve a particular problem and with the opportunities that lay in BNPL, existing startups have begun to either offer it as a product while others have built their operations around it.

CredPal, known to be one of the first startups to introduce BNPL in Nigeria has raised $15 million in equity and debt in a bridge round. The round saw the participation of Greenhouse Capital, an existing backer of the startup, and new investors including Uncovered Fund, First Circle Capital, LongCommerce, and Adii Pienaar, a co-founder and former CEO of WooCommerce.

The startup’s bridge round follows about two years after it raised $1.5 million in seed funding which it used in launching its credit card product.

BNPL products are expected to grow astronomically in acceptance in the coming years. According to a report, the rate of adoption for BNPL as a payment option in Nigeria for both online and point-of-sale options is expected to reach a record of a CAGR of 20 percent from 2021 to 2028. The growth is also predicted to be spurred by an increase in GMV from 4204 million to over $1 billion by 2028 as the providers of these products increase.

CredPal plans to use the new funding to expand its consumer credit offerings across the continent of Africa. Specifically, the company said that it is looking at venturing into Kenya, Egypt, Ghana and Cameroon in the short term.

Back in 2018, CredPal launched a point-of-sale consumer credit service for low and middle-income earners who used e-commerce stores. Because BNPL wasn’t so popular when it launched and the adoption rate was quite poor, the company decided to launch a new credit offering via cards. “We launched the cards was to increase the reach of our BNPL service and that caught on well. But now people can shop in instalments by walking into a partner store or using our credit card,” CredPal’s CEO Fehintolu Olaogun said.

CredPal’s users can also access credit facilities, its second offering, via its mobile app when they visit partner stores for shopping.

Users can access credit between ₦5,000 to ₦500,000 and are required to make repayment between 30 to 180 days after a 30 percent down payment is made. Interest rates come between 4 and 9 percent. The company’s CEO explained that in situations where users make their repayment before two months, they may not have to pay any interest. He says they are covered by fees paid by merchants to the company.

CredPal has over 4,000 merchants with 600 monthly active merchants and has more than 20,000 merchants that have signed up to be partners. The company says it currently serves a monthly active customer base of 85,000.

Across the continent, CredPal has other competitors with the same goal – taking over the continent of Africa. CredPal’s CEO, while explaining what makes the startup stand out from others said that “One of the things that differentiate us is that we provide an omnichannel approach to BNPL. We’ve built out a merchant suite to cater to those who have like full-fledged e-commerce websites to those with brick and mortar stores and social commerce merchants. We are merchants agnostic and also our tech allows consumers to be able to interface with CredPal across a wide range of channels.”