CredPal, is a startup FinTech company that provides credit facilities accessible via its credit card, a unique set of cards that serve different purposes for accessing funds. CredPal’s development serves as the bridge for Africans to access credit on demand and credit resources to finance businesses.
The FinTech company was developed in 2017 by the two Nigerians, Olorunfemi Jegede, and Fehintolu Olaogun. Considering the commitment of customers accessing its credit infrastructure in the past three years, recently raised $1.5 million to grow the business.
Both Jegede and Olaogun passed through the YCombinator Accelerator program. Their credit platform has been servicing its customers in the e-commerce marketplace enabling its customers to make purchases and pay in installments.
Ideologically, the FinTech company was established to improve an average individual’s living standards. An employed individual with a credible financial record is eligible for CredPal’s credit card.
The FinTech platform also serves as a means for a financial organization to generate funds for point-of-sale transactions, just as multiplying an organization’s lending portfolio.
CredPal’s services are regarded as the “first and the only consumer credit platform” to be established in Africa. The fintech executives did not disclose if the funding will also finance its planned headquarters.
However, 70 percent of the African economy needs constant financing to ascertain a normal living standard in Africa. The low standard of living in Nigeria also discourages investors, whereas many merchants experience low sales because customers can neither afford payment nor access a means to pay.
Olaogun said “Many customers can neither pay outright nor access credit for the purchase, which leads to high cart abandonment and low sales for merchants. Lenders also experience decreased profitability due to the high cost of customer acquisition and credit risk underwriting.”
It’s a norm for a credit facility to be wrapped up by leveraging merchants and retailers in the US. The credit providers in the US understand that finance is the consumer point of connection. CredPal serves the purpose of reducing the poverty rate in Africa, which directs financial institutions to grants customers the adequate finance needed to process point-of-sales.
The credit facility developed by the Nigerians has a well-structured interface, and they are not liable to encounter credit risk because other financial institutions grant loans to their customers via the CredPal platform. The startup just received funding to expand its services.
CredPal has recorded about 500 merchants signed up to experience real-time financing. Resultant of the merchant seeking credit, CredPal has also bankrolled about 40,000 purchases.
Overtime, CredPal has been responsive to have attracted a series of funding that has kept its business running. The startup has received funding from platforms like CF ventures, YCombinator, EFinA, and other Silicon Valley-based venture capital investors.
The customers, investors, and financial institutions are getting fond of the credit access made available by the Nigerian CredPal. Based on the startup’s accomplishment, they are optimistic about completing the first round of the $1.5 million funds by the first half of 2021.
The funds will permit CredPal to achieve expansions inot more African markets from its sole presence in Nigeria. Jegede said they intend to introduce their services to influence their potential customers in the North American marketplace as well.