CredPal, one of Nigeria’s early adopters of buy now, pay later (BNPL), has concluded a $15 million gap round of equity and debt, with the latter accounting for a significant proportion of the funding, to expand its customer credit operations across the continent.
The funds will be used to expand into other African markets, including Kenya, Egypt, Ghana, and Cameroon.
According to CEO Fehintolu Olaogun, CredPal launched a point-of-sale consumer credit solution linked to e-commerce sites for lower-to-middle-income earners in 2018.
The notion of BNPL was new at the time, especially in Nigeria. CredPal experimented with a new credit giving via cards, which experienced an increase in utilization despite low uptake.
Customers can use CredPal’s BNPL services to shop for items ranging from electronics, particularly smartphones, to furniture and groceries at a member institution using one of two methods: a credit card or a mobile app.
Customers can get loans for amounts ranging from $5,000 ($10.00) to $500,000 ($1,000.00), which they must repay within 30 to 180 days after making a 30% down payment. The rate of interest varies between 4% and 9%.
Clients who pay off their debts before the two-month mark may avoid paying interest, which is paid by fees the firm acquires from merchants, according to Olaogun.
CredPal has 20,000 merchant subscribers, but it has only onboarded over 4,000, with only 600 of them being monthly active merchants. They have an 85,000-strong monthly active consumer base.
CredPal revealed that part of the new investment will go toward securing a relationship with telecom provider Airtel Nigeria to enable low to middle-income earners to buy smartphones in installments, as the firm seeks to extend both product-wise and regionally.
CredPal has a number of current supporters, including Greenhouse Capital, a fintech and embedded finance-focused venture capital firm.
CredPal participated in this equity bridge round two years after raising $1.5 million in seed capital for their credit card product launch.
