Credpal, a Nigerian fintech startup focused on providing point-of-sale (POS) consumer credit to low-to-middle class income earners in Nigeria, has announced it raised $1.5million for credit cards launch and expansion in a recent funding.
The platform has provided consumers credit infrastructure overtime, which affords them leverage to banks and other financial institutions and deliver consumer credit in real-time across POS channels.
But on realizing that a vast majority of its potential customers lacked access to actual credit cards, and applied the use of ATM cards as credit cards for use at POS channels, Credpal maximized this strategic window while planning to expand outside Nigeria, with intentions of making its cards a a household name in its product category.
The startup set out in 2018 and gained recognition in record time at Visa Everywhere for Sub-Saharan Africa.
It later won $25,000 and the Merchant Payments Challenge for enabling individuals and businesses make instalmental payments across online and offline platforms.
In March 2019, the fintech startup got acceptance into the Y Combinator Winter Batch with the likes of Schoolable, Wallets Africa, and 54gene, receiving $150,000 in the process.
This year around June it also got selected for the fifth edition of Google for Startups Accelerator Africa that lasted three months, giving it access funding, PR support and mentorship as well as other incentives in the course of it.
This new round of investment will give it the arsenal to fire it towards accomplishing its mission as there isn’t much usage of credit cards in Nigeria and the fintech brand wants to tap into that, riding on the back of its achievements so far
It now wants to focus on driving adoption and usability of credit cards in the country, especially as Nigeria and most West African countries are basically cash-driven economies and the customers in these countries go through difficulty paying out-rightly for products due to access to credit for purchases, low purchasing power which results in low sales for merchants across the continent.
Fehintolu Olaogun and Olorunfemi Jegede both founded CredPal and their clout is what has afforded them this round, from the likes of US seed-stage accelerator, Y Combinator, Lagos-based fintech investment holding company, GreenHouse Capital,
Also an unnamed digital insurance company, and some other VC firms, which now warrants them to try and perk CredPal as the financial backbone for consumer credit on the continent.
He said; “We’re building the American Express of Africa. And our goal is to make credit cards mainstream across Africa as is obtainable in the United States and other advanced economies. With this funding, the growing market demand for consumer credit, and our recent product launch to solve these needs, we know that we’re on the right track.”
It made use of ATM cards which served as credit cards for users at POS channels. But with plans to expand outside Nigeria, CredPal is trying to launch and take its credit cards as mainstream as quickly as possible.
With this new investment round, Olaogun says CredPal has the capacity to accomplish its mission.
In Nigeria, credit cards use is not as widely spread as what CredPal has achieved so far, there’s enough market space to be tapped into. In this light, CredPal is looking to drive further adoption of credit cards use in the country.
Like the West African country, the majority of other African countries are cash-driven economies.
And since customers in these countries find it challenging to make outright payments due to low purchasing power, and also access credit for purchases, this leads to low sales for merchants on the continent.
Jegede is of the opinion that the company had to be proactive in responding to customers’ requests for services where they can have access to credit rather than process payments at point-of-sale.
According to Jegede “With our current raise and the launch of our credit cards, we’re confident about meeting these customers’ needs,”
In Olaogun’s case, the work starts from providing useful information and educating average Nigerian youths about credit cards and why they are essential.
“We are obsessed with the desire to see that working professionals no longer have a thing to worry about as it concerns dealing with their financial needs, we live in a world where every working person is rewarded with a CredPal card that has their back.”
Featured Image: Olorunfemi Jegede(Left) and Fehintolu Olaogun(Right)
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