On Wednesday, I spent almost two hours speaking with someone who has experience in Nigeria’s digital lending sector. The conversation touched on some of the more interesting themes, like how access to credit remains a problem in Nigeria.
Banks cater to the lowest risk customers: In 2017, after five years of employment and a steady salary, I applied for a credit card at the bank I had used for a few years. I was met with a rejection.
The odds that I’d be able to get a credit card today would also be very little. Yet, access to credit is important for the middle class in any country trying to build wealth.
This is why companies like CredPal are important; they provide “consumer credit cards” to help people meet important needs. A credit card can help you survive those two weeks where you’ve long forgotten that salary has been paid.
Backstory: In March2019, CredPal got accepted into the Y Combinator Winter batch alongside Wallets Africa, Schoolable, and 54gene. They received $150k. In June 2020, CredPal was also selected for the fifth edition of Google for Startups Accelerator Africa.
Now: it has raised $1.5 million in a funding round that was announced earlier this week. The investors that took part in this round include US seed-stage accelerator, Y Combinator; Lagos-based fintech investment holding company, GreenHouse Capital; Tangerine Life, a digital insurance company; and other VC firms.
What’s next: Look out for our conversation with the company’s founders in next week’s newsletter. As usual, we’ll ask them about the problems they’re trying to solve, how they’re thinking around it and how it all translates into moneyyyyyyyyy!