Flutterwave’s Founder and CEO, Olugbenga “GB” Agboola, believes that boosting access to credit can unlock the full potential of Africa’s economies. Africa’s consumer market is expanding rapidly, but many African nations lack consumer credit systems that are well-established, making it difficult for entrepreneurs, businesses, and individuals to access debt.
Individuals in countries like the United States begin building their credit history from the start of adulthood, allowing them to demonstrate their trustworthiness and reliability to lenders over several years. Conversely, in many parts of Africa, credit histories are non-existent, thereby restricting consumers’ capacity to prove their dependability to lenders. Consequently, many middle-class Africans are at a disadvantage.
Flutterwave aims to rectify this by making credit data more accessible. Limited data makes it difficult for lenders to make sound decisions regarding lending, and Flutterwave wants to empower business owners to access credit from their smartphones. This would enable them to purchase more inventory at better prices, provide goods to consumers at a lower cost, and ultimately make more profit.
Flutterwave aims to leverage the credit scoring systems of modern credit bureaus, which are data-driven and consistent. This enables lenders to analyze an applicant’s credit history, payment history, utilization, and other variables to minimize their lending risk. The unique opportunity in Africa lies in the ability to establish an efficient credit system without experiencing the struggles of other regions. Flutterwave understands how credit bureaus in Eastern Europe, Asia, and the Middle East were established, how they improved existing models, and seeks to apply this knowledge to Africa.
Flutterwave plans to utilize its platform to gather data on spending and payment, sharing it with lenders to develop new ways of calculating lending risk. This allows for the expansion of credit, which should not be difficult with the growth in the use of technology to make payments, send money, or start businesses. Normalizing access to credit data is critical to increasing credit use.
In conclusion, the development of credit systems in Africa is imperative in unlocking the full potential of the continent’s economies. Small businesses and individuals must be included in the credit system’s expansion. Flutterwave plays a crucial role in this process by making credit data more accessible and creating more value on its platform.