A Crendly Case study
Crendly, an innovative Credit Infrastructure Technology Company, has revolutionized the landscape of credit access in Nigeria. For Crendly marketplace subsidiary, Crendly use its character-based algorithm and the use of non-traditional data sources to connect borrowers with lenders, providing financial opportunities for those traditionally excluded from the formal credit system or those who want to access credit on their own terms. This case study examines the experiences of Crendly’s customers, illustrating the platform’s impact on the economy and its potential for further transformation.
Founded with a mission to democratize access to credit, Crendly addresses the limitations of conventional credit systems, which are typically dominated by banks and micro-finance institutions. Traditional credit scoring systems often overlook deserving individuals and businesses with limited or no credit history. Additionally, It’s no news that the Nigerian financial sector faces issues like non-performing loans due to reliance on outdated credit bureau data, the inherent difficulty of predicting individual financial futures, and the vulnerability of financial data to manipulation.Crendly aims to overcome these barriers through innovative solutions, leveraging machine learning and AI to bridge the gap between financial institutions and underserved populations.
Key Challenges
High-Interest Rates: Traditional loans in Nigeria are often accompanied by exorbitant interest rates, rendering them inaccessible for many potential borrowers.
Limited Access to Credit: Conventional lending mechanisms frequently exclude individuals with no credit scores, limiting their financial opportunities.
Intermediary Costs: The traditional lending process involves numerous intermediaries, leading to higher costs and inefficiencies.
Strategies Implemented
Direct Platform: Crendly’s platform connects borrowers directly with lenders, reducing the overall cost of obtaining loans and making credit more accessible.
Character-Based Lending: By employing AI algorithms and leveraging non-traditional data sources, Crendly assesses the risk profiles of borrowers more accurately, broadening loan accessibility.
Streamlined Processes: Crendly’s online platform simplifies the loan application and disbursement processes, enhancing transparency and efficiency for both borrowers and lenders.
Results Achieved
Expanded Credit Access: Crendly has significantly widened the avenue for credit, benefiting individuals and businesses with diverse credit histories.
Income Generation for Lenders: By providing a platform for peer-to-peer lending, Crendly has created new income opportunities for lenders, diversifying their investment portfolios.
Market Influence: Crendly’s innovative model has prompted traditional lenders to reconsider their rates and processes, fostering a more competitive and inclusive financial environment.
Case Studies
Adaora’s Journey with Crendly
Adaora, a Lagos-based small business owner who sells wigs primarily through Instagram, faced difficulty securing funding from traditional banks due to her self-employment status. Unlike white-collar workers and self-employed individuals with high turnovers, Adaora found it difficult to get bank loans. Stumbling on Crendly’s instagram page, Adaora quickly signed up and secured a loan. The model assigned her initial score, called the Crendly score upon onboarding, allowing her to overcome the hurdles of having a rich financial history. With the loans she got, Adaora expanded her business, increasing her inventory and hiring additional staff. Her business revenue grew by 30% within six months, enabling her to repay the loan on time and improve her creditworthiness. “Crendly gave me the opportunity I needed to grow my business when all the 3 banks I use won’t even consider me. I can now plan for even bigger expansions,” Adaora said.
Idowu’s Experience as a Lender
Idowu, a tech industry professional, sought to diversify his income by exploring alternative opportunities. Crendly’s platform attracted him as a Lender due to the potential for higher returns compared to the usual savings accounts. “It’s like selling a product,” Idowu remarked, highlighting the potential for active involvement. Over the 6 months since Idowu joined Crendly, he has successfully funded over 50 loans, with earnings from the interest payments. The platform’s robust risk assessment has minimized defaults, and Olumide’s overall portfolio performance has exceeded his expectations. Idowu shared that Crendly took away his fears of lending money to people, especially strangers.
Ngozi’s Story of Financial Empowerment
Ngozi, a struggling artist with fluctuating income, lacked access to traditional loans due to lack of substantial collateral. However, Crendly’s focus on character-based lending provided her with an opportunity. Ngozi secured a personal loan to purchase art supplies for her upcoming exhibition, which turned into a success, allowing her to repay the loan in full. SInce then, Ngozi hasnt been afraid to take on more ambitious art projects. “Crendly has changed my perception of enterpreneurship. The loan helped me take my art practise to the next level, even my own standards,” Ngozi said. Her success story inspired other women in her industry to explore Crendly as a viable financial option.
Key Learnings
Efficiency of Direct Connections: Eliminating intermediaries can lead to substantial cost reductions and process efficiency improvements, making credit more accessible to underserved populations.
Broadening Credit Accessibility: Fintech can democratize access to financial services through innovative risk assessment methodologies that consider non-traditional data sources.
Impact on Financial Literacy: Initiatives aimed at promoting financial literacy and responsible borrowing are crucial in creating a more financially inclusive society. By empowering individuals with knowledge and resources, platforms like Crendly can drive long-term economic growth and stability.
Future Prospects
As Crendly continues to grow, it aims to further enhance its platform with new features and services tailored to the needs of its community. The Startup plans to expand its reach within Nigeria and explore opportunities in other African markets where access to credit remains a significant challenge. By continually innovating and adapting to the needs of its users, Crendly wants to make a lasting impact on financial inclusion and economic empowerment across the continent.
Crendly marketplace, although at its infancy has made significant strides in transforming the credit landscape in Nigeria. By providing a platform that connects borrowers and lenders directly, Crendly has reduced costs of loans, increased access to credit, and created new earning opportunities for lenders. The success stories of Adaora, Idowu, and Ngozi exemplify the platform’s positive impact on individual lives and the broader economy. As Crendly continues to innovate and expand, it holds the promise of further enhancing financial inclusion and driving economic growth in Nigeria and beyond.