Grace Ashiru
Lendsqr, a startup providing essential software for companies to launch lending businesses, will now offer clients a line of credit to enable them to issue more loans and expand their operations. Founded in 2018, Lendsqr counts Kredi, Snapcash, and Blockacash among its clients and will extend overdrafts to these businesses from a ₦1 billion fund.
The company, which reports having “thousands of lenders servicing millions of clients,” will charge qualified lenders 4% per month, with interest applied only to the portion of the facility disbursed to end users, specifically retail lenders.
“If they get repayments from their borrowers and their account swings into positive, they don’t pay any interest at all,” said Lendsqr CEO Adedeji Olowe, adding that Lendsqr will monitor loan usage to identify and mitigate potential risks.
For digital lenders providing collateral-free personal loans, the cost of funds is a key factor in setting loan prices. Alongside default risks, this often results in higher interest rates for customers. While technology is essential for digital lenders’ success, access to affordable funding is the ultimate advantage.
“For a long time, we believed that providing top-tier lending technology was enough to help lenders scale,” said Adedeji Olowe, CEO of Lendsqr. “But technology alone cannot scale a loan business without adequate capital. That’s why we decided to go a step further and address this critical need.”
With this offering, Lendsqr joins a group of on-lending institutions—lenders that provide funds to other lenders—such as Lendable, the Nigerian Bank of Industry, and the African Finance Corporation.
“We’re excited to be the catalyst for growth in Nigeria’s lending sector. Our on-lending initiative isn’t just about providing capital; it’s about building a stronger, more inclusive financial ecosystem where every licensed lender, big or small, can thrive,” said Joy Bello, Head of Sales at Lendsqr.
Lendsqr operates on a subscription model, with packages ranging from ₦20,000 to ₦1 million per month for Nigerian businesses, and $1,000 per month for international clients.
“By next year, we expect to close some of the ongoing capital discussions, enabling other lenders to provide 20x more capital to additional lenders,” Olowe added. “We’re also considering expanding this initiative to other countries where we are operational or available.”
