The acceptance of buy now pay later (BNPL) in Nigeria as a payment option, both online and at the point of sale to be expected to capture a CAGR of 20% from 2021 to 2028, according to this report†
The growth of BNPL is further emphasized as GMV is predicted from $204 million to more than $1 billion by 2028. Key to this growth are the activities of providers whose platforms encourage consumers to make purchases immediately and pay over time.
To that end, CredPal, one of Nigeria’s early “buy now, pay later” pioneers, has entered into a $15 million bridging round of equity and debt — the latter constituting a very large portion of the financing — to extend its offering. to expand consumer credit through Africa†
According to a statement shared by the company, the investment will support its expansion into other African markets, primarily Kenya, Egypt, Ghana and Cameroon.
In 2018, CredPal launched a point-of-sale consumer credit service connected to e-commerce stores for lower to middle-income earners† The concept of BNPL was on the rise at the time, at least in Nigeria, and as adoption was not great, CredPal flirted with a new credit offering through cards whose use was on the rise, CEO Fehintolu Olaogun told MovieUpdates†
“We launched the maps to increase the reach of our BNPL service and that was well received,” he said. “But now people can shop in installments by walking into a partner store or using our credit card.”
The credit card is one of two options – the second via the mobile app – that consumers can use to access CredPal’s BNPL services when visiting a partner store to purchase items ranging from electronics, especially smartphones to furniture. and groceries†
Consumers can access credit from ₦5,000 (~$10.00) to ₦500,000 (~$1,000.00) of which they necessary refundable between a period of 30 days to 180 days after making a 30% deposit. Interest rates range from 4% to 9%.
Olaogun said that in cases where consumers repay within two months, they may not pay interest — which: is covered by fees the company charges merchants† Speaking of merchants, CredPal has 20,000 merchant sign ups; however, it has more than 4,000 with only 600 are monthly active traders. They serve a monthly active customer base of 85,000.
As one of the major providers of BNPL services in the continent, these numbers seem somewhat impressive, but knowing how early the sector is in Nigeria and most of Africa, CredPal is hardly scratches on the surface†
But becoming a market leader in Nigeria or Africa is not up for grabs from CredPal. There are Sympl, Carbon Zero, Shahry, Lipa Later, PayLater, CDCare, newcomers like Klump and even big guns like Tabby keeping an eye on different regions across the continent.
“One of the things that sets us apart is that we offer an omnichannel approach to BNPL,” said the CEO who founded the company with Olorunfemi Jegedeon how CredPal is positioning itself in the face of growing competition†
“We have developed a merchant suite to cater to those who would like to have full-fledged ecommerce websites to those with brick and mortar stores and social commerce merchants† We are agnostic sellers and our technology also allows consumers to interact with CredPal through a wide variety of channels.”
The omnichannel merchant suite, CredPal Pay, enables businesses of all sizes and categories to accept buy now and pay later. The platform serves as a point-of-sale infrastructure enabling BNPL through a credit payment link, checkout plugin, QR codes and a transaction management system† CredPal will compete with ThankUCash in this segment of providing BNPL infrastructure to vendors.
Since CredPal is both product technical and geographicalthe company said part of the new investment will also help it partner with telecom operator Airtel Nigeria to help people with low to middle incomes purchase smartphones in installments†
The debt financing was provided by Credit Direct, a subsidiary of First City Monument Bank (FCMB) and some unnamed financial institutions†
Greenhouse Capital, a fintech and embedded finance focused venture capital firm, is one of CredPal’s existing backers. It participated in this bridging round that, two years after CredPal raised $1.5 million in seed funding, has used money to launch its credit card product.†
New investors include Uncovered Fund, LongCommerce, First Circle Capital and Adii Pienaar, co-founder and former CEO of WooCommerce†