Lendsqr, a Nigerian fintech startup known for providing software solutions for lending businesses, has announced the launch of a ₦1 billion working capital fund aimed at supporting its clients in scaling their lending operations. Founded in 2018, Lendsqr already serves companies like Kredi, Snapcash, and Blockacash, and this new initiative is set to provide these businesses with access to overdraft facilities.
The company, which says it supports “thousands of lenders servicing millions of clients,” will charge qualified lenders a monthly interest rate of 4%. However, interest will only be applied to the portion of the facility that is actually lent to borrowers, allowing clients to manage costs more effectively. According to Lendsqr CEO Adedeji Olowe, if repayments bring a lender’s account balance into the positive, no interest will be charged.
“We are offering a solution where if our clients receive repayments and their accounts swing into positive, they don’t have to pay any interest,” Olowe said, adding that the company will closely monitor loan usage to identify and mitigate potential risks.
Digital lenders, particularly those offering unsecured personal loans, often face high costs of funds and default risks, leading to higher interest rates for borrowers. While advanced technology helps lenders manage operations, the availability of affordable capital is essential for reducing costs.
“For a while, we thought that top-tier lending technology would be enough for our clients to scale,” Olowe explained. “But we realized that without sufficient capital, technology alone isn’t enough. That’s why we’ve decided to step in and meet this crucial need.”
With this development, Lendsqr joins other prominent players in the on-lending space, such as Lendable, the Nigerian Bank of Industry, and the African Finance Corporation. These institutions provide capital to other lenders, ensuring a healthier financial ecosystem.
“We’re excited to play a pivotal role in the growth of Nigeria’s lending sector,” said Joy Bello, Head of Sales at Lendsqr. “Our on-lending initiative isn’t just about giving out capital; it’s about creating a stronger, more inclusive financial ecosystem where lenders of all sizes can thrive.”
Lendsqr operates on a subscription model, offering pricing packages ranging from ₦20,000 to ₦1 million per month. For businesses outside Nigeria, the product is available at $1,000 per month.
“By next year, we expect to close some of the ongoing capital negotiations, which could result in other lenders being able to provide 20 times more capital,” Olowe added. “We’re also planning to expand this initiative to other countries where we are either operational or looking to enter soon.”
