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AfricInvest, through its Financial Inclusion Vehicle (FIVE), has led an investment round in BFREE, a pan-African investor in distressed retail and SME loans. Algebra Ventures joined as a new institutional investor, alongside existing investors Capria Ventures, VestedWorld, Axian CVC, Angaza Capital, 4Di Capital, DotExe Ventures, and other strategic individual investors.
BFREE was founded to address a structural gap in African credit markets. For most lenders, non-performing unsecured digital retail and SME loans have had no practical resolution pathway: legal recovery is rarely viable at scale, leaving institutions to write off and carry these assets indefinitely. Moreover, portfolio sales to dedicated purchasers have been rare.
BFREE started as a technology-led and data-driven collection servicer and has developed over time into an institutional-grade portfolio purchaser, acquiring and servicing distressed unsecured credit across the full spectrum from nano loans to SME facilities.
“The market opportunity is significantly larger than the infrastructure historically available to address it,” said Julian Flosbach, chief executive officer of BFREE. “This round puts us in a position to pursue substantially larger portfolio acquisitions, engage a broader range of institutional partners, and do so with the speed and certainty of execution that serious counterparties demand.”
“BFREE’s approach to credit management, based on a unique set of proprietary data and a technology-enabled collection platform, closes an essential gap in the digital lending value chain. High-velocity digital lending has become a core product across markets, with financial institutions, banks and fintechs alike, requiring effective ways to manage small ticket non-performing loans. BFREE’s execution-driven team has brought the platform to an inflection point, which will enable them to purchase larger portfolios and become a prime partner for banks and fintechs across African markets,” commented Patrick Herrmann, a partner at AfricInvest.
“Billions of dollars in African retail and SME credit go unresolved every year because the institutional infrastructure to clear them simply does not exist. Healthy credit markets need a disciplined buyer for distressed debt. The founders Julian, Moses and Chukwudi have built a platform that combines rigorous portfolio pricing, risk management, and deep data infrastructure to clear distressed debt at scale. We are backing them together with AfricInvest to scale BFREE across Africa and beyond,” said Omar Kashaba, general partner at Algebra Ventures.
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