Nigerian fintech startup Lendsqr has introduced a new on-lending initiative, providing up to ₦1 billion in capital to help digital lenders expand their credit offerings. This initiative is aimed at empowering lenders with State Moneylender or Cooperative licenses, enhancing their ability to offer loans to customers while promoting financial inclusion.
According to Joy Bello, Head of Sales at Lendsqr, the program is open to all online lenders, including SMEs, microfinance banks, and commercial banks. However, lenders must use Lendsqr’s loan management software to access this capital. Adedeji Olowe, CEO of Lendsqr, emphasized that technology alone isn’t enough to scale lending operations without sufficient capital, which led to the launch of this initiative.
“We realized that to help lenders truly scale, they need more than just cutting-edge technology. That’s why we introduced this capital solution,” Olowe said.
This launch comes amid a boom in Nigeria’s digital lending space, which has grown significantly due to rising demand for credit. Data from the Central Bank of Nigeria shows a 329.28% increase in personal loans, totaling ₦7.52 trillion by March 2024. The number of licensed digital lenders has also surged, growing from 173 in April 2023 to 311 by September 2024.
With inflation standing at 32.15% in August 2024, more Nigerians are turning to loan apps for credit, driving growth in consumer lending. Lendsqr’s initiative addresses a major challenge for lenders—access to sustainable loan capital. The on-lending model provides overdraft loans, where lenders only pay interest on the amount they use, offering flexible funding options.
Bello highlighted that the program also includes a user-friendly dashboard, providing real-time updates on loan usage and repayment schedules. “This initiative gives even the smallest digital lenders a chance to compete in the market and support their customers more effectively,” she noted.
Lendsqr’s offering is part of a broader strategy to support financial inclusion, positioning itself alongside major players like Lendable, the Nigerian Bank of Industry, and the African Finance Corporation. By bridging the gap between technology and capital, Lendsqr helps lenders grow, reach new markets, and stimulate local economies.
Eligibility and Application Process
The on-lending program is open exclusively to Nigerian lenders. Applicants must be registered with the Corporate Affairs Commission (CAC), hold valid lending licenses, and have up-to-date tax documentation. SME lenders must also hold state moneylender licenses or cooperative registrations. Applications are processed through the Lendsqr Capital Portal.
Once lenders submit the required documentation, Lendsqr’s risk team conducts a thorough assessment. If approved, funds are disbursed immediately for active lenders. New lenders must actively engage with Lendsqr’s platform for three months before accessing funds.
Initial loan amounts range from ₦1 million to ₦15 million, with flexible interest rates based on a risk assessment. There is no set deadline for applications, as the initiative aims to support as many lenders as possible.
By providing smaller financial institutions with access to capital, Lendsqr’s on-lending initiative plays a crucial role in deepening financial inclusion and supporting the growth of Nigeria’s lending ecosystem.
