NIGERIA – Nigerian credit lending startup Creditchek, that enables both digital and traditional leaders reliably verify identity and assess the creditworthiness of potential customers, has raised US$240,000 in pre-seed funding.

The funding was led by Atom Capital with participation from Aidi Ventures, Ham Serunjogi of Chippercash, Olumide Ogunsanwo of Adamantium Fund, Damola Adegboyega of Assembly Investors, Isaac Ewaleifoh of Launch Africa Ventures and Ogundiran Kayode.

Creditchek, founded in 2021 by Kingsley Ibe and Lionel Orishane, provides three product features that digital lender can incorporate into their applications or websites, as well as a no-code platform for traditional less smart enterprises.

Explaining the role of CreditCheck in the economy, Ibe cited data from the National Bureau of Statistics, which showed that in 2018, financial institutions lost over $4B to chronic loan defaulters.

“In Kenya, an estimated 3.2 million people — 6% of the population, have been blacklisted on Kenya’s TransUnion credit reference bureau for non-repayment of digital credit loans.

“In Nigeria, it is not unusual to hear of customers who take loans from 3 to 5 lenders simultaneously and then disappear into thin air. These sorts of audacious schemes and a general unwillingness of customers to pay loans continue to overwhelm lenders.”

Clients can use its Income Insight feature to examine the user’s financial condition, acquire crucial insights on cash flow, and ascertain income to establish appropriate financing.

Its Identity function also allows organisations to discover their customers’ true identities by leveraging BVN, NIN, and other real-time sources. Creditchek’s Credit Insight function uses past credit data from many sources to provide crucial insights into the borrower’s credit and debt condition.

The startup pivoted from its first version in December 2021 and onboarded a few hundred customers in the first two weeks after realising that the business model demanded a high cost of acquisition and a lot more to maintain the users.

The startup debuted its MVP in beta in April 2022, testing it with a few businesses and making iterations. During its Beta period, it onboarded 30 organisations and processed thousands of API calls before exiting in June 2022.

Prior to starting CreditChek, Ibe founded MicroMoni in 2019, a lending firm that provided micro-loans to MSMEs. One of MicroMoni’s main issues was high NPL due to poor credit information: for every 10 loans it disbursed, 4–6 of those loans returned as bad loans, severely limiting the startup’s ability to disburse more loans, according to the founder.

Announcing the fundraising, CreditCheck co-founder, Kingsley Ibe, said: “In April 2022, we launched our MVP in beta, testing with a few businesses and making iterations. While in Beta, we onboarded 30 businesses, processed thousands of API calls, and eventually came out of Beta in June 2021.”

“As coconut heads; we continue to be stubborn on our vision as financial inclusion advocates but flexible on our mission.

“Our vision is to be the most reliable credit infrastructure in Africa in the next 5 years, fostering trust between lenders and borrowers. In furtherance of that vision, we are pleased to announce that we’ve raised US$240,000 in pre-seed funding led by Atom,” he added.

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