credit money

Aella Credit may just be Nigeria’s fastest growing startup at the moment. Based in Lagos, Aella Credit is a personal loan lender with direct integration with the Nigerian credit bureaus and its sights set firmly on the Nigerian market. Basically, the startup’s proposition is to provide “affordable loans and strive to ensure an excellent customer experience.”

In an exclusive interview with TechCabal, we had one of the company’s founders – Akinola Jones – explain the credit scene in Nigeria and some of the startup’s progress so far.

“What made us head into the personal lending business can basically be summed up as personal pain. Banks rarely lend to individuals. We’ve had family members and friends who have needed credit facilities and no solution was readily available. Even as a company, we have needed such facilities without easy access.”

Like every entrepreneur before them, they began seeing the problem as an opportunity. But they still had reservations one of which was risk: How do you get your money back? How do you keep defaults below 3%? Then they met Adedoyin Onayemi, a seasoned risk manager and their worries were lessened.

“Doyin is a microfinance specialist who used to be at Ren Money. He currently runs operations and risk at Aella Credit. Once we realised we could keep our non-performing loans in the single digit range, we started looking for global ideas to see how others had run credit facilities. Leveraging technology, we were able develop a system whereby people can come online, fill a form and get their loans within hours depending on the verification process.”

Much of the success of such an automated system relies heavily on the credibility of applicants. And that’s when the company’s proprietary algorithm comes up. This proprietary algorithm is what processes applicant’s eligibility, by grading eligibility for loans on a 0 to 100 scale while considering social and demographic factors as well as their debt to income ratio. So basically, creditworthy individuals should find it easier to access loans on the platform.

loans credit

Applications for loans are assessed individually based on social and demographic factors

“Absolutely. Aella Credit is currently two months old. We started in July and in our first month, we did about 27 million in loans, second month we disbursed about 63 million in loans, so our growth rate is over a 100%. And our payments are coming back on time.”

Akinola says one of the things that has held back the credit facilities in the past has been access to information. But technology and recent developments in the financial sector has altered things considerably.

“We have three credit bureaus in Nigeria which have been in operation for three to four years. Their collective database is currently 15 million strong. They’ve gathered and are still gathering data. We’ve been fully integrated with them and signed partnerships with them. We’ve been in operation for three months now and their input has been extremely critical to our operations. So far, we’ve had no defaults and a lot of this is due to the data we get from the credit bureaus.”

“Another game changing development is the CBN’s insistence on the BVN. Through the credit bureaus, we have access to the BVN. You can’t use our site without a BVN. So you should go get one if you don’t already. With the BVN, identity verification and fraud are less likely to occur.”

When borrowing money, one of the major concerns is interest rates. How much interest do customers pay on their loans? The banks currently lend out at 26 percent per annum. Aella’s is fixed at 4 percent per month. Quick mathematicians may sum it up to 48 percent per annum, and they’d be right. But not so fast, there’s a difference.

“The difference between us and the banks is that we loan on a short term basis, which means you can pay down your loan at any time, usually three to nine months, which is not an option banks give. This way, you can limit your loan footprint since you can pay back in one month which would accrue just 4%. So a prudent borrower for example could say he needs N500,000 for three months. Since he’s expecting money from salaries or from a business, in three months he’ll pay back N560,000.”


The startup is still in its pilot phase and as it grows, we can expect lower interest rates especially for repeat customers based on a risk based pricing model.

Borrowers who use the Aella service can pay back in two ways – a direct debit form online which is powered by Zenith at the moment and a Deduct from Source system whereby Aella partners with companies and deduct the money when the salaries are due.

Obviously, these two ways favour salary earners above entrepreneurs. But there are plans to cover SMEs and entrepreneurs in the coming months. One of the projects that will determine how fast this phase can be deployed is the deployment of a Quickbooks kind of system where entrepreneurs can enter their financials and it can be verified through bank integration. Once this is in place, the SME market will open up to Aella Credit.

When it comes to funding, interest in the startup has been encouraging.

“For our Seed A round, we raised close to $1,000,000. We’ve also been in the Technology advisory business for a while. Aella Capital is our business incubator and this is our first real baby we’re birthing. At the moment, we’re finalising investments with various venture capitalists across the globe. We’ve also been accepted into the Barclays techlab accelerator, so hopefully we’ll be able to have more investors onboard.

As to what’s coming next for Aella Credit, we can expect a risk based pricing model, better interest rates and little to no delay times. The startup will follow this up with instant deployment of money into the borrower’s account, once they are approved. The platform is being upgraded with the technology that will facilitate this and the startup is currently recruiting a technology team from across the globe.
“We have moved pretty fast. Our figures are astronomical. We plan to revolutionize the lending space with technology.

We wish the Aella Credit team all the best.

Photo Credit: Padre Denny via Compfight cc

Ibukun Taiwo Author

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