Lenda startup providing essential software to businesses to launch lending businesses, will now offer its customers a line of credit to enable them to issue more loans and expand their operations. Founded in 2018, Lendsqr counts Kredi, Snapcash and Blockacash among its clients and will provide overdrafts to these companies from a 1 billion yen fund.
The company, which says it has “thousands of lenders serving millions of customers,” will charge qualified lenders 4% per month, with interest applied only to the portion of the facility paid to end users, particularly retail lenders. .
“If they get repayments from their borrowers and their account becomes positive, they pay no interest,” said Adedeji Olowe, CEO of Lendsqr, adding that Lendsqr would monitor loan utilization to identify and mitigate potential risks.
For digital lenders offering unsecured personal loans, the cost of funds is a key factor in setting loan prices. In addition to default risks, this often results in higher interest rates for customers. While technology is critical to the success of digital lenders, access to affordable financing is the ultimate benefit.
“For a long time, we believed that providing best-in-class lending technology was enough to help lenders scale,” said Adedeji Olowe, CEO of Lendsqr. “But technology alone cannot scale a lending business without adequate capital. That’s why we decided to go further and address this critical need.
With this offering, Lendsqr joins a group of on-lending institutions – lenders that provide funds to other lenders – such as Lendable, the Nigerian Bank of Industry and the African Finance Corporation.
“We are delighted to be the catalyst for the growth of the lending sector in Nigeria. Our on-lending initiative is not just about providing capital; it’s about building a stronger, more inclusive financial ecosystem in which every licensed lender, large or small, can thrive,” said Joy Bello, Head of Sales at Lendsqr.
Lendsqr operates on a subscription model, with plans ranging from ₦20,000 to ₦1 million per month for Nigerian businesses and $1,000 per month for international customers.
“By next year, we expect to close some of the ongoing capital discussions, thereby allowing other lenders to provide 20 times more capital to other lenders,” Olowe added. “We are also considering expanding this initiative to other countries where we are operational or available.”