Nigerian credit management startup Bfree has raised $3.1 million from undisclosed investors to scale its artificial intelligence-powered platform for recovering and restructuring defaulted digital loans across Africa.
The fresh funding comes after a $2.95 million equity round in 2024 led by Capria Ventures, alongside participation from Angaza Capital, GreenHouse Capital, Launch Africa, Modus Africa and Axian CVC. The company has also secured debt financing, including $3 million from TLG Capital and $3 million from Verdant Capital Hybrid Fund, bringing total funding to more than $12 million since its 2020 launch.
Bfree, founded by Julian Flosbach, Chukwudi Enyi and Moses Nmor, focuses on managing rising volumes of non-performing digital loans across African markets, where rapid growth in online lending has outpaced recovery infrastructure.
The company replaces traditional collections processes with machine learning-based systems that assess borrower repayment capacity and offer tailored restructuring options via chatbots, automated calls and self-service portals.
Bfree said it has processed more than $740 million in distressed loans and worked with over 30 financial institutions across Nigeria, Ghana and Kenya, engaging about 6.6 million borrowers.
The startup plans to use part of the new funding to expand its strategy of purchasing delinquent loan portfolios directly from lenders, effectively turning distressed credit into tradable assets for institutional investors.
It is also exploring blockchain-based systems to support secondary trading of distressed debt portfolios, aiming to improve liquidity and pricing transparency in the market.
As digital lending expands across Africa, defaults have risen, increasing pressure on lenders and regulators to improve recovery mechanisms and consumer protection.