Lendsqr, a pioneering startup that equips companies with the necessary software to launch a lending operation, has announced an innovative service for its clientele. Starting now, Lendsqr will extend lines of credit to its clients, enabling them to issue more loans and thereby accelerate the growth of their businesses. Since its inception in 2018, Lendsqr has amassed a notable client list including Kredi, Snapcash, and Blockacash, and plans to provide these businesses with overdraft facilities from a dedicated ₦1 billion fund.
The company, which boasts a vast network of “thousands of lenders servicing millions of clients,” intends to offer qualified lenders a 4% monthly interest rate. Importantly, Lendsqr specifies that interest will only accrue on the portion of the credit line actually utilized by the retail lenders.
Lendsqr’s CEO, Adedeji Olowe, highlighted a unique feature of their offering: if lenders receive repayments from their borrowers and their account balances turn positive, they won’t incur any interest charges. Furthermore, Lendsqr will monitor the utilization of the loans to mitigate potential risks effectively.
In the realm of digital lending, especially for businesses offering unsecured personal loans, the cost of capital significantly influences loan pricing. High default risks often lead to elevated interest rates for customers. Thus, while cutting-edge technology is essential for the success of digital lenders, access to affordable capital is equally critical.
Adedeji Olowe elaborated on the company’s philosophy, stating;
For a long time, we believed that providing top-tier lending technology was enough to help lenders scale. However, we’ve recognized that technology alone cannot scale a loan business without sufficient capital. This realization prompted us to address this crucial need.
By introducing this service, Lendsqr positions itself among a select group of on-lending institutions—entities that provide financing to other lenders—including Lendable, the Nigerian Bank of Industry, and the African Finance Corporation.
Joy Bello, Head of Sales at Lendsqr, expressed enthusiasm about the initiative;
We’re excited to be the catalyst for growth in Nigeria’s lending sector. Our on-lending initiative is not merely about supplying capital; it’s about fostering a robust and inclusive financial ecosystem where every licensed lender, regardless of size, can flourish.
Lendsqr operates on a subscription basis, with plans priced between ₦20,000 and ₦1 million per month. For businesses outside Nigeria, the service is available for $1,000 per month.
Looking ahead, Olowe shared optimistic projections;
By next year, we expect to finalize several ongoing capital discussions, which should enable other lenders to provide up to 20x capital to more lenders. Additionally, we are exploring opportunities to expand this service to other countries where we have a presence or are available.
