A startup called Lendsqr, founded in 2018, is now offering a line of credit to its clients to assist them in providing more loans to expand their businesses. The company will provide overdrafts from a ₦1 billion purse to businesses like Kredi, Snapcash, and Blockacash.
Lendsqr, with a claim of having “thousands of lenders servicing millions of clients,” will charge qualified lenders 4% interest per month. Interest will only be collected on the portion of the facility that is disbursed to retail lenders.
The CEO of Lendsqr, Adedeji Olowe, mentioned that the company will monitor how the loan funds are utilized to mitigate potential risks. This move is significant for digital lenders offering collateral-free personal loans as the cost of funds greatly impacts loan pricing.
According to Adedeji Olowe, the CEO of Lendsqr, technology alone is not enough to scale a loan business without adequate capital. Providing top-tier lending technology is crucial, but having relatively cheap funds is essential for success.
Lendsqr has introduced an on-lending initiative to provide capital to lenders, joining other institutions like Lendable, the Nigerian Bank of Industry, and the African Finance Corporation in the same space.
Joy Bello, Head of Sales at Lendsqr, expressed excitement about enabling growth in Nigeria’s lending sector through their onlending initiative. The goal is to foster a stronger and more inclusive financial ecosystem for all licensed lenders to thrive.
Lendsqr operates on a subscription model with packages ranging from ₦20,000 to ₦1 million per month. For businesses outside Nigeria, the product is priced at $1,000 per month.
Looking ahead, Lendsqr aims to secure more capital conversations in the coming year to provide 20 times more capital to additional lenders. The company also plans to extend its services to other countries where it is operational or available.