CredPal, one of Nigeria’s early adopters of buy now, pay later (BNPL), has concluded a gap round of $15 million in equity and debt, with the latter accounting for a significant portion of the funding, to extend its customer credit operations across the continent.
According to the startup’s announcement, the investment will help it expand into other African markets, primarily Kenya, Egypt, Ghana, and Cameroon. A few undisclosed financial institutions provided the debt finance.
CredPal introduced a point-of-sale consumer credit solution connected to e-commerce sites for lower-to-middle-income earners in 2018, according to CEO Fehintolu Olaogun.
The notion of BNPL was fledgling at the time, particularly in Nigeria. Although adoption wasn’t excellent, CredPal toyed with a new credit providing via cards, which saw an increase in usage.
Customers can utilize CredPal’s BNPL services when they go to a member establishment to shop for things ranging from electronics, especially smartphones, to furniture and foodstuffs, using one of two options: a credit card or a mobile app.
Customers can get loans for amounts ranging from $5,000 ($10.00) to $500,000 ($1,000.00), which they must repay within 30 to 180 days after making a 30% down payment. The rate of interest varies between 4% and 9%.
Clients who pay off their debts before the two-month mark may avoid paying interest, which is paid by fees the firm acquires from merchants, according to Olaogun.
CredPal has 20,000 merchant subscribers, but it has only onboarded over 4,000, with only 600 of them being monthly active merchants. They have an 85,000-strong monthly active consumer base.
CredPal revealed that part of the new investment will go toward securing a relationship with telecom provider Airtel Nigeria to enable low to middle-income earners to buy smartphones in installments, as the firm seeks to extend both product-wise and regionally.
CredPal has a number of current supporters, including Greenhouse Capital, a fintech and embedded finance-focused venture capital firm.
CredPal took part in this equity bridge round two years after raising $1.5 million in seed capital, which was utilized to launch its credit card product.
Uncovered Fund, LongCommerce, First Circle Capital, and Adii Pienaar, co-founder and former CEO of WooCommerce, are among the new investors.
The buy-now-pay-later (BNPL) trend is spreading around the globe, and African shoppers are eager to participate. Banks, fintech, financing businesses, payment service providers, and merchants are all trying to figure out how to obtain a piece of the pie.
Retailers are adopting BNPL for one simple reason: it increases sales and attracts new clients. BNPL offers larger baskets and lesser abandoned baskets for online businesses.
Customers prefer BNPL because it increases availability and accessibility or makes a larger number of purchases feasible at the same time, and there are no interest costs, unlike typical credit products.
Many BNPL products are accessible at the point of sale with few further procedures and may not need a standard credit check.
There are various BNPL platforms, however, CredPal does not have the resources to become the market leader in Nigeria or Africa.
Sympl, Carbon Zero, Shahry, Lipa Later, PayLater, CDCare, as well as newer entries like Klump and even major platforms like Tabby, are all targeting various regions across the continent.
When it comes to BNPL, all of these platforms have various offers. CredPal is unique in that it takes an omnichannel approach to BNPL.
CredPal Pay, an omnichannel merchant suite, enables small and medium enterprises and types to allow buy now, pay later transactions.
Through a credit payment link, checkout plugin, QR codes, and a transaction management system, the platform acts as a point-of-sale infrastructure for BNPL. In this market of supplying BNPL infrastructure to merchants, CredPal will compete with ThankUCash.
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