Lending through a pandemic
COVID-19 has prevented them settling into Kenya, where there are no less than 50 digital lending platforms competing for an adult population that is over 80% financially included.
Reports of predatory lending have increased red tape in the East African country. A newly gazetted directive bars digital lenders from reporting defaulting borrowers below certain amounts to credit bureaus, among other rules.
It increases the time it will take for a new entrant like Carbon to comfortably express its various services. “We haven’t really had a chance to test the engine,” Dozie says, but they have given out enough loans to calibrate their algorithm.
In Nigeria, they have reduced lending to shore up against the uncertainty caused by the pandemic, revising the repayment schedule for 9,016 loans. However, Dozie says they are currently at more than half the level achieved last year, in value and volume.
Another profitable year ahead?
Carbon’s products need overall improvement, in responding to customer complaints (see responses to this tweet) about deductions, and notification lags, among others.
The pandemic’s impact on the Nigerian economy could have an effect on the company’s bottom line. Profit in the next report might as well be less impressive than what this year’s report contains.
“It will be easier to beat [this year’s] numbers in naira terms, but we are all at the mercy of macroeconomics on the dollar terms,” Dozie says.
He says they will report whatever happens, as part of a long-term pitch to customers who, he believes, will be impressed by an honest expression of financial strength. Otherwise, focus remains on leveraging other strategic moves from 2019, notably the acquisition of payments startup Amplify.
The latter’s intellectual property has gone into developing an SME platform, as well as in developing Carbon Express, a smartphone keypad button that can be used for instant transactions within any app.
Carbon acquired Amplify particularly for this feature and their engineering. Maxwell Obi, one of Amplify’s two co-founders who joined Carbon as part of the deal, has left the company, but the others have been instrumental in building valuable aspects like an iOS app.
kenzabenessalah on 12 Feb 21The important message to take from AgroCenta is that it gives win-win situations for all players. Smallholder farmers as well as those active in the value chain are taking advantage of this concept.
AgroCenta's value proposition lies in the advantage of providing the last mile market access for smallholder farmers in the staple food value chain through extensive collaboration with many partners who play an active role in the value chain.
