Bfree, a Nigerian startup specializing in debt collection, was established with the aim of automating and instituting ethical processes for debt recovery. It was set up in response to the harmful consequences of aggressive debt collection techniques such as consistent phone calls and public shaming of debtors by unscrupulous digital lending companies.
Since its inception in 2020, Bfree has curated several debt recovery strategies scalable to varying situations. One such strategy is a self-service portal through which debtors can independently set up new repayment plans. Additionally, the company makes use of conversational AI tools including chatbots and callbots to provide more humane after-sales services for debtors and to take action based on behavioral and financial data.
Bfree’s clientele has grown dramatically over the years and now includes some of the leading banks in Ghana, Kenya, and Nigeria. The startup plans to expand further, aided by a recent fundraising round that secured $2.95 million led by Capria Ventures. Various other investors including Modus Africa, Axian CVC, Angaza Capital, GreenHouse Capital, Launch Africa, and numerous angel investors participated in this funding round, bringing the total capital raised to $6.5 million to date.
CEO Julian Flosbach, who co-founded Bfree with Chukwudi Enyi (COO) and Moses Nmor (CPO), relayed to TechCrunch that the company started with digital lenders but has since shifted its focus to banks, which currently contribute up to 70% of its revenues.
Almost all (92%) of Bfree’s customer interactions are fully automated, yet the company still maintains a call centre staffed by a small team for occasions where customers call in or further follow-up calls are necessary. Bfree also introduced a loan collection management SaaS platform, Workflow, aimed at companies with internal collection teams or those not interested in outsourcing.
Bfree claims to be the only tech-enabled credit recovery company operating pan-Africa, a region in which collectors rely primarily on traditional methods such as call centers for debt recovery.
Bfree plans to create a secondary market for loans and currently has a loan portfolio exceeding $400 million, 12.5% of which it has successfully collected. The proposed secondary debt market will enable third-party investors like hedge funds to purchase non-performing loans (NLPs) from banks, facilitating the diversification of their investments.
Moreover, Bfree has designed an analytics solution for banks enabling them to gain insights into secondary debt markets. Commenting on the investment from Capria Ventures, managing partner Susana García-Robles stated, “Bfree is well-positioned to play a crucial role in improving accessibility and mitigating risk in financial services.”
As Bfree continues to diversify its offerings, it has decided to slow down its initial aggressive expansion plans from two years ago. The startup now intends to focus on its three key markets in Africa, understanding that different markets warrant different approaches and products.
