CreditChek,a Nigerian based lender has raised $240,000 in a pre-seed funding round led by Atom Capital with participation from Aidi Ventures, Ham Serunjogi of Chippercash, Olumide Ogunsanwo of Adamantium Fund, Damola Adegboyega of Assembly Investors, Isaac Ewaleifoh of Launch Africa Ventures and Ogundiran Kayode.
This funding, the company said will be used to drive its vision of becoming the most reliable credit infrastructure in Africa in the next 5 years, fostering trust between lenders and borrowers.
Explaining the role of CreditCheck in the economy,Kingsley Ibe co-founder cited data from the National Bureau of Statistics, which showed that in 2018, financial institutions lost over $4B to chronic loan defaulters.
“In Kenya, an estimated 3.2 million people — 6% of the population, have been blacklisted on Kenya’s TransUnion credit reference bureau for non-repayment of digital credit loans. In Nigeria, it is not unusual to hear of customers who take loans from 3 to 5 lenders simultaneously and then disappear into thin air. These sorts of audacious schemes and a general unwillingness of customers to pay loans continue to overwhelm lenders.”
CreditCheck uses structured, user-permissioned data from multiple sources to create powerful Identity, credit and verification services that empower fintechs, banks, microfinance institutions, retail businesses and mobile money operators to build better financial products for the underserved.
To eliminate any chance of “Credit karma for Africa” repetition, the Nigerian-based startup launched its MVP in April 2022. While in Beta, it onboarded 30 businesses, processed thousands of API calls, and eventually came out of Beta in June 2022.
Ibe learnt a great deal of lessons from his past attempts at building loan credit facilities, especially MicroMoni. He said: “for every 10 loans we disbursed, 4 – 6 of those loans came back as bad loans and this immensely affected our ability to disburse more loans.”
Having identified the challenges, CreditChek has launched three products to assist financial institutions in Identity verification and Credit assessment of their customers. They are easy and simple to use such that digital lenders can easily integrate the products into their applications or websites and offers a no-code platform for traditional less savvy businesses to use
The products are as follows:
Income Insight— this feature uses bank-verified historical transactional data to assess the user’s financial status, get key insights on cash flow & ascertain income to determine appropriate financing.
Credit Insight— this feature leverages historical credit data from multiple sources to give key insights into the borrower’s credit and debt status.
Identity— this feature enables businesses to unearth the true identity of their customers by leveraging BVN, NIN and other real-time sources.
Ibe said the company’s vision is to be the most reliable credit infrastructure in Africa in the next 5 years, fostering trust between lenders and borrowers.
“Today, there are more than 500 fintechs and a lot more traditional lending businesses across the continent. Many of these businesses provide lending and Buy Now Pay Later solutions but do not have a reliable robust platform for Identity verification and Credit assessment of their customers. This is the gap that we are filling at Creditchek,” he said.
