Verdant Capital is pleased to announce that its Verdant Capital Hybrid Fund (the “Fund”) has completed a USD 3 million investment loan in Bfree.
This investment will be used for distressed loan portfolio financing whereby Bfree will be purchasing distressed loan portfolios from inclusive financial institutions in Africa. Bfree will benefit from initiatives supported by the Fund’s technical assistance facility.
The platform was established in 2020, and it is a leading ethical and digital credit collection company in Africa.
Bfree delivers digital and ethical collection processes on distressed loan portfolios that comply with the global industry’s ethical collection standards.
Distressed loan portfolio financing remains underexplored in Africa due to several factors including the lack of effective collection procedures on distressed loan portfolios, lack of accurate date for valuation of distressed loan portfolios, loan transferability issues, price variations, and ineffective judicial procedures.
Bfree’s streamlined and principled collection services address the challenges of large-scale collections in the Retail and Small and Medium Enterprise (SME) lending sectors in Africa.
Bfree is significantly contributing to the reduction of distressed loan portfolios in the financial services sector in Africa.
Bfree utilises a loan portfolio pricing model which uses proprietary data to predict repayment rates for the distressed loan portfolios.
Since its incorporation five years ago, Bfree has experienced remarkable growth, serving over 6.6 million borrowers with an estimated loan portfolio value of over USD 740 million across its markets of operations.
This investment aligns with the Fund’s mandate of providing funding to financial institutions and impacting positively on the borrowers who have defaulted on their loans with the end goal of increasing their repayment rates and ultimately their credit scores as well as customer satisfaction.
BFree is also aiding the financial services sector by providing capital through purchasing of distressed loan portfolios that would typically have been written down to zero.
This adds both capital and liquidity to financial institutions and allows them to focus on their core business of lending.
This investment is yielding for the Fund, a return aligned with the Fund’s return target, reinforcing the value of supporting high-impact financial inclusion initiatives in emerging markets.
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