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Business Half Hour

How Evolve Credit aims to cover the credit gap in Africa – Akan Nelson

Akan Nelson, co-founder of Evolve Credit, talks about how loans have become accessible via the online market place.

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How Evolve Credit aims to cover the credit gap in Africa - Akan Nelson

Marketplaces all over the world have moved onlineand the same goes for the credit market. Things have moved from the times when one had to spend days visiting several banks and licensed lenders in search of suitable credit facilities, to the digital times where a mobile device provides all of that information and more within a short time. Among those pushing the envelope in the credit space in Africa is Evolve Credit, a tech startup that is well on its way to becoming a key player.  

Speaking during the weekly Nairametrics Business Half Hour on Classic FM, Akan Nelson, co-founder and CEO of Evolve Credit, explains that the business idea was birthed out of the realization that Africans needed an online marketplace where they could explore their best loan options, just like they did when shopping online.

READ: Bank’s Credit to Nigeria’s Real Estate sector hits 5-year low

Evolve Credit provides potential borrowers data to compare loan options, interest rates, repayment options, and other terms before deciding on the loan which best suits their needs, and then applying for it right away.  

“I realized quite early that there was a gap and an opportunity in Nigeria’s credit space and I wanted to play there, Akan recounted.  

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Even though about 36% of adults in Nigeria have access to some kind of savings or payment products, only about 5.5% of Nigerian adults have access to loan facilities – a gap that needs attention. 

READ: Demand for credit by household increases in Q2 2020 – CBN

Together with his co-founder, Daniel Osineye, Nelson built a lending app that allows people access loans at the Point of Sales (POS), and the process of running this business opened their eyes to an even bigger problem in the space. As the customer care agent, Nelson realized that when people had their loan applications, they immediately started asking for other loan options or other lenders.  

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Obviously, they cared less about what institution availed them the loan, and more about the credit option and accompanying terms. While trying to provide answers to their questions, Daniel realized that there was an information gap to be filled at the point of decision. Potential borrowers needed to understand the terms, the rates and other conditions attached, in order to make the right credit decisions and avoid getting locked in debt longer than planned.  

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Evolve Credit thus evolved as a central point where people could get all the information needed on loans, right from their phones. It features loan products from hundreds of licensed lenders in the country, thereby providing a level playing field upon which they can all compete.  

“There are literally thousands of licensed lenders like the commercial banks, the microfinance banks, the finance houses, and the individual money lenders, and many of them have products that are better suited for many Nigerians than the ones we all hear on the radio, but they are not digitized so they cannot compete with a loan provider that is all over our mobile devices.  

READ: Konga now offering merchants loan at 2.08% interest rates

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“Evolve Credit provides the kind of technology on the backend that enables an offline lender, microfinance bank, finance house or individual money lender to essentially become a fintech overnight and automate every single step in the lending process – from receiving the loan applications, to ascertaining credit-worthiness, managing the loan portfolio, automating the payments disbursement and collection process – and this helps to actually facilitate a completely online loan application, from the market place to the lender, Nelson explained in the show.  

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After filling out a 3-minute form, the intending borrower can compare and review available options, send in an application within 10 minutes and receive feedback within 24 hours. 

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How the money flows 

Evolve Credit works with a double-pronged revenue model. On the one hand, it provides feature software and tech facilities to lenders for a monthly subscription fee. On the other hand, it gets to charge a commission fee every time a loan application sent to the lender is approved, either based on a fixed fee or some revenuesharing formula.  

“To be specific, we leave that to them to decide which best suits their business needs. We are very flexible and we like to put our borrowers and our lenders first, he said 

READ: Distribution of loans under ACGSF declined by 31.62% in 2 years – NBS 

The idea that the process of applying for, receiving and paying back credit facilities can be done completely online, totally eliminates paper from the process.  

“It is a brand new category in Nigeria and our expectation is that in a few years, people should be able to access credit facilities from their phones, right from their homes, using the app, website or the USSD options and without interacting with a single human being, Nelson said.  

READ: CBN announces new policy measures, reduces interest rates for financial institutions

Although some similar businesses have gone defunct in the past, Nelson is positive that Evolve Credit has learned from the mistakes of those companies and will be around for much longer, bringing value to the decision making process of getting a credit facility in Nigeria, and by extension Africa.  

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Within 5 months of operation, the company is still running a lean structure with less than 10 staff, all working remotely. After commencing operations in May 2020, both founders bootstrapped the venture for a short while, trying to engage investors.It happened very slowly at the start and then very quickly at the end. We were able to raise a couple hundred thousand dollars to allow us get things off the ground, he said. 

READ: How to access new CBN’s Non-oil Export Fund

Giving all the competing lenders a level playing field to operate in means that customers can now get better rates and loan terms, as each institution tries to outdo the other while competing on different terms 

“By making the market more transparent for borrowers, we should begin to see the emergence of new and more progressive kinds of financial products, since lenders will now have to compete on more subtle things, Akan stated 

Ruth Okwumbu has a MSc. and BSc. in Mass Communication from the University of Nigeria, Nsukka, and Delta state university respectively. Prior to her role as analyst at Nairametrics, she had a progressive six year writing career. As a Business Analyst with Narametrics, she focuses on profiles of top business executives, founders, startups and the drama surrounding their successes and challenges. You may contact her via [email protected]

1 Comment

1 Comment

  1. Anonymous

    October 28, 2020 at 11:55 am

    Credit only works when the sars youth are employed ! Hello…is any body listening 😷😷😭

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Business Half Hour

BMGA is more than a training platform for fresh graduates | Gbemisola A Abudu, Founder BMGA | BHH

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BHH, Podcast, WAVE, entrepreneurs, business, Nigerian, concept, business, ethics, Goal, Setting, Actualization, Greymate Care, Chika Madubuko,, business ethics Femi Adeyemo, BHH Podcast, Fundall, Swift Medispark, Ugo Nwokoro, technology in healthcare, EazyHire, Data Science, Yvonne Alozie, Gitgirl, Verifi, CAMA and taxes for SMEs, Tayo Lekan-Agbaje, Dclutterng, Business half hour, BHH Podcast, Oluyomi Ojo, Taiwo Obasan, Nigerian shoes business

 

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Business Half Hour

Eden Life set out to automate domestic chores for busy people – CEO

Eden Life connects people with professional home managers, using its app that helps them outsource the tasks to professionals.

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Eden Life set out to automate domestic chores for busy people - CEO

Nothing dampens the desire to work like that nagging feeling that you have left some house chores unattended, or you have to go fix your next meal. But Eden life exists to fix this issue.

According to Nadayar Enegesi, CEO and founder of Eden Life, Eden was set up solely to improve the quality of life of the working middle-class person, who is so busy and yet needs the domestic chores to run on auto-pilot.

Speaking at the weekly Nairametrics Business Half Hour, Nadayar said when he came to Lagos in 2014 to co-found Andela, he first noticed that very few things worked, as they should and things were quite difficult for the working class adults, irrespective of how rich they were.

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Often times, people had to resort to the use of helps in order to function properly, but because most of the helps have not been trained to handle the chores without supervision, you end up spending more time trying to get them to do it right, than you would have doing it yourself. At the end of the day, the money has been spent without getting corresponding value.

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In a bid to create a better life and community where things ran smoothly, Nadayar teamed with a couple of friends, Prosper Otemuyiwa and Sim Momoh, to do an urban development research to see how things could be done differently to make people’s lives better.

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We were first thinking along the lines of Urban development Centres where people could migrate to and basically change their lives, but that was going to be capital intensive and we ran into money challenges before even getting started. So we decided to approach the problem differently and instead look at how to make people achieve better quality of life,” Nadayar explained.

Just like the Garden of Eden, Eden life is out to ensure that things run as they should, and you get to live a better quality of life.

My long term vision is to build Nigeria and Africa into a place that people want to live in as opposed to a place that they want to leave from,” Nadayar says.

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With Edenlife, customers get to select services they want and how they want it, and then it runs on autopilot henceforth. There would be no need to place an order for a meal everyday, or call the cleaner every morning to put the house in order. The user will also be spared the troubles of having to micromanage a house help to do things when they should be done, as the Eden life Concierge team does all of these, ensuring that the service delivery comes when and how it should.

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It hardly makes sense that you leave your house in the morning by 5am to deal with all the traffic madness that Lagos has to offer, come back in the evening and your home is a mess. With reliable, timely, and quality services assured, workers can now go about the business of making more money and leaving the little details that take up all their time.

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Executing service to precision

Launched in April 2019, Eden Life connects people with professional home managers, using its app that helps them outsource the tasks to professionals known as the Gardeners. These ‘gardeners’ are trained home managers and handle all the hassles to ensure that the services are delivered when and how they should.

An average monthly subscription of N36,000 could avail users a variety of domestic services, ranging from meals to laundry and cleaning, and it goes all the way upward depending on just how much more the user wants.

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The app also allows users to customize their subscription with the specific needs that they have. Once a user subscribes, the app attaches them to a ‘gardener’, who they can give instructions to from within the app.

On the average, artisans and skilled labourers are associated with some sort of disappointing service, and this is the reason Edenlife chose not to work with artisans.

Trust is at the core of what we do and we cannot afford to breach that,” he explained.

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Eden Life instead works with a collection of small businesses that have been checked and verified for their services. These businesses also have to have some sort of insurance services, because no one ever plans to have things go wrong until they actually do.

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Insurance is necessary because of the mistakes that occasionally come up with service delivery.”

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Funding

The company recently secured a funding round from Samurai Incubate Africa and the US-based Village Global to help expand its operations, after taking part in an accelerator program conducted by the firm.

With its cheap subscriptions, the model is not yet built for profitability, but according to Nadayar, the plan is to build a sustainable model within the next couple of years before seeking more funding and expanding to other busy cities in Africa like Abuja, Accra, etc.

With more people spending money on domestic helps and home cleaning services, Eden life has a huge market to go after and is not bothered about the competition. One of its core values considered during recruitments is customer obsession and this stands at the core of all services to clients.

We will continue to raise the bar on service delivery and customer satisfaction and our hope is that more service providers cross the bar because ultimately, the goal is to give busy people a better quality of life, while they pursue career goals,” Nadayar said.

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Business Half Hour

Now you can avoid house chores by automating them on Eden | Nadayar Enegesi CEO at Eden

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BHH, Podcast, WAVE, entrepreneurs, business, Nigerian, concept, business, ethics, Goal, Setting, Actualization, Greymate Care, Chika Madubuko,, business ethics Femi Adeyemo, BHH Podcast, Fundall, Swift Medispark, Ugo Nwokoro, technology in healthcare, EazyHire, Data Science, Yvonne Alozie, Gitgirl, Verifi, CAMA and taxes for SMEs, Tayo Lekan-Agbaje, Dclutterng, Business half hour, BHH Podcast, Oluyomi Ojo, Taiwo Obasan, Nigerian shoes business

 

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