Buy-now-pay-later (BNPL) services have been thriving in parts of Africa, and expected to grow even further by about 59.3%, according to reports. The BNPL sector has been a lifeline for Africans, especially citizens living in developing countries.
BNPL services, although, reports say its reception is not so widespread in Nigeria, has empowered many to afford products they would otherwise have not been able to afford, giving the current state of the economy.
Credpal, one of the Nigerian-based BNPL service providers, is taking up the challenge in Nigeria, providing credits, and helping its customers afford products.
To facilitate its mission, the digital lending platform has raised $15 million equity and debt financing funds in a bridge round. The funds, according to the startup, would be used to scale its expansion into other African markets, especially, Kenya, Egypt, Ghana and Cameroon.
The debt financing funds was provided by Credit Direct, which is a subsidiary of First City Monument Bank (FCMB), as well as a number of unnamed financial institutions.
Participating in the equity round include: Greenhouse Capital, a fintech and embedded finance-focused venture capital firm.
New investors like Uncovered Fund, LongCommerce, First Circle Capital and Adii Pienaar (o-founder and former CEO of WooCommerce), also joined the equity round.
Credpal was founded in 2018 by Fehintolu Olaogun (CEO), and Olorunfemi Jegede (COO). The digital lending platform offer services that enables its users to buy products on credit and pay back in flexible instalments, both online and offline.
The startup gives its customers access to credit between ₦2,000 and ₦5 million. It also offer quick short-term loans facilities, as well as the option to shop, enjoy discount and cashback offers from over 12,000 merchants: and pay later.
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“What we’ve done is encapsulate the lifestyle of the average working-class Nigerian and ensure that every person can find something specifically for them on CredPal. For instance, a professional who earns ₦250,000 can get a credit card with a limit that they can pay back at the end of their billing cycle or use it to buy now and pay later,” Olaogun said.
Credpal had in 2021 raised $1.5 million, bringing the startup’s total funds raised to about $16.7 million.
Credpal will now have to duel it out with other firms like M-Kopa, Lipa Later, which are also scaling in the BNPL sector, and expanding across the continent.