Bfree’s $1.7m Pre-Series A funding round was led by 4Di Capital, Octerra Capital, VestedWorld, Voltron Capital, Logos Ventures. Making the total funding raised by Bfree a total of $2.5 million, after raising $800,000 in a seed round in May of 2021.
Bfree is a Nigerian credit management fintech in Africa that is looking to reinvent the credit collection process in emerging markets (Africa, South America & Asia) by making it customer-centric and scalable. In essence, this startup builds user profiles (algorithms) of loan defaulters using customer data provided by the lenders to predict loan customers behaviour and recommend the best collection method.
Bfree was founded by Chukwudi Enyi (COO), Moses Nmor (CPO) and Julian Flosbach (CEO). The company’s mission is to develop better ethical and tech-inspired debt-collection tools and processes. Following their firsthand experience working for digital lenders in Nigeria, Bfree’s founders feel their team possess the capabilities to tackle this space. A team that includes Yohan Théatre (Head of Decision Making & Financial Engineering), Avis O’Voss (Head of Finance) and Femi Adeniji (Country Manager in Nigeria).
Ethical debt collection solutions ensure customer privacy. it ensures responsible, smart and personalised communication with customers, especially during the repayment process. These solutions are also centred around flexible repayment options where customers do not receive unnecessary penalties like lateness fees and debt-shaming which is common with many digital lenders in Africa.
The fintech is looking to expand outside Nigeria into other expanding markets like India, Ghana, Uganda, Brazil, Colombia, Mexico, Russia, Poland, Pakistan and Indonesia. This is after its first expansion to Kenya from Nigeria.
Bfree also has plans to launch a DeFi based secondary debt market instrument that allows both retail and institutional investors to invest directly into microfinance portfolios and lenders to offload some of their portfolio risks.
The markets that Bfree is expanding into are markets with large populations, shallow credit deepening and an underdeveloped regulatory environment, where a behavioural debt collection approach( Based on culture) is likely to work.
In these markets, lenders give out loans and just stop there. there are no effective and consumer-centric collection processes. Generally, the aftersales services of credit markets in these countries are quite poor.
Bfree currently works with over 30 partners that include credit institutions, including digital lenders, microfinance institutions and banks.
How Bfree Works ATM
Bfree is primarily a solution for lenders (called clients) who hand over their debt collection to Bfree. Bfree is paid based strictly on commissions, an agreed percentage of the total amount they collect on your behalf of the client from its customers and repay directly to the clients. These commission rates differ from one client to another depending on portfolio characteristics such as loan size, duration or lateness of default on the loan, etc.
Bfree’s debt collection methods include a self-servicing option, AI automated calls and messaging, and contact centre collection. All, supported by machine learning algorithms that cluster and predict customer behaviour.
it is important to note that bfree does not do collections for debts that are over 3 years.
When a lender or client assigns a loan repayment account to Bfree, the startup contacts the customer (borrower) to follow up with them and guide them through a repayment process using Bfree’s self-servicing platform.
Here borrowers can set new payment plans using their phone number or follow up on their debt balance using automated communication (chatbots, callbots or IVR technology) or direct calls.