Nigeria: TLG Capital backs ethical debt collection startup
Nigeria: TLG Capital backs ethical debt collection startup
TLG Capital has extended a $3 million financing facility to BFREE.
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TLG Capital, a pan-African alternative asset manager, has extended a $3 million financing facility to BFREE, a debt collection startup based in Nigeria.
Over the years, microlenders have been criticised for aggressive loan enforcement policies which sometimes do more harm than good. TLG and BFREE have discovered that most defaulting borrowers want to pay but struggle financially. BFREE takes a human-centric approach, working collaboratively with borrowers to restructure their outstanding debts with more time to repay. TLG’s facility to BFREE aims to transform combative practices in microlending, such as incessant calling and debt-shaming, with a more just approach. TLG and BFREE’s partnership will preserve the financial well-being and dignity of millions of borrowers while educating them about credit and financial literacy. BFREE leverages innovative data and generative AI tools to extend financial literacy across the African continent at a scale that could not be accomplished by human loan officers, given the small loan sizes.
TLG Capital's strategic investment empowers BFREE to acquire non-performing loan books from commercial and microfinance banks in Africa while implementing ethical recovery practices through its advanced collection system. This relieves the financial pressure on both banks and their borrowers, fostering sustainable development.
Commenting on the deal, the CEO of BFREE, Julian Folsbach said, “BFREE is building a more inclusive financial system in Africa. The TLG team gets this massive opportunity, and their creative approach to structuring and incredible network across Africa made them a critical partner for our business. They have been our first institutional debt investor and indispensable partner in shaping our strategy to transform debt collection practices on the African continent. We hope that this investment from TLG will be the first of many as we expand our operations across Africa, providing relief to both borrowers and banks alike.”
Isaac Marshall of TLG’s team commented, “Everyone investing in Africa knows the problem of scale in retail and SME lending, especially with regard to collections. BFREE has built a practical process to instill a sense of care and dignity into loan collections. We’re extremely excited to be a part of the transformation of the lending ecosystem that they’re going to bring about. They are a magical team, and TLG’s investment today is just the beginning.”
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