Lendsqr, a pioneering startup that equips companies with software to launch lending operations, has introduced a new service aimed at accelerating client growth. The company will now extend lines of credit to its clients, allowing them to issue more loans and expand their businesses. This move is supported by a dedicated ₦1 billion fund from which clients can access overdraft facilities. Notable clients, including Kredi, Snapcash, and Blockacash, are among the beneficiaries of this new offering.
Competitive Interest Rates and Flexible Terms
Lendsqr’s vast network of “thousands of lenders servicing millions of clients” will offer qualified lenders access to these credit lines at a competitive 4% monthly interest rate. Importantly, interest is charged only on the amount utilized by the lenders. This flexible structure ensures that lenders won’t accrue interest on unused credit portions, providing a cost-effective way to manage borrowing.
Adedeji Olowe, CEO of Lendsqr, highlighted another innovative feature: when lenders receive repayments from borrowers and their account balances turn positive, they won’t incur any interest charges. This structure, coupled with active monitoring of loan utilization, allows Lendsqr to mitigate risks effectively.
Addressing the Cost of Capital for Digital Lenders
The cost of capital is a significant factor in the digital lending space, particularly for businesses providing unsecured personal loans. High default risks often result in elevated interest rates for end customers. While advanced technology is vital for success, access to affordable capital is equally crucial.
Olowe explained the company’s evolving strategy, 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.”
Lendsqr Among Elite On-Lending Institutions
By offering this new service, Lendsqr positions itself alongside other notable on-lending institutions, such as Lendable, the Nigerian Bank of Industry, and the African Finance Corporation. These institutions play a key role in financing other lenders to promote growth in the financial sector.
Driving Growth in Nigeria’s Lending Sector
Joy Bello, Head of Sales at Lendsqr, expressed excitement about the company’s role in fostering growth in Nigeria’s lending market:
“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.”
Subscription Model and Future Expansion
Lendsqr’s services operate on a subscription basis, with plans ranging from ₦20,000 to ₦1 million per month. For businesses outside Nigeria, the service is available for $1,000 per month.
Looking to the future, 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.”
Conclusion
Lendsqr’s new credit line service marks a significant step forward in supporting lenders and fostering growth in the digital lending sector. By combining cutting-edge technology with access to affordable capital, Lendsqr is positioning itself as a leader in the on-lending space, driving financial inclusion and development across Nigeria and beyond.