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GrowthBond CEO, Ferdinand Kjaerulff explains how SMEs can raise up to $1000 loans for Facebook ads

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Facebook, in that Economic Impact Study (published in January 2018), reveals the growing importance of digital platforms to Small and Medium Scale Enterprises (SMEs) in Nigeria.

The report shows that 68% of 1,000 sampled SMEs record positive impact on their local community using Facebook platforms/apps.

Using the platform to trade, 91% of businesses surveyed outlined the increased demand they have seen for their company’s goods/services, not only in their home country, but further afield.

The study, conducted in partnership with Morning Consult Brand Intelligence, sampled over 1,000 SMEs across a number of sectors including Technology, Services, Manufacturing, Retail and Healthcare.

That is why this FinTech Company we are about to introduce to you is strategic in its approach to the market.

Ferdinand Kjaerulff an entrepreneur with 8 years of experience in launching different web startups, saw the need to empower businesses in Africa by offering them loans to advertise on Facebook.

Thus, he founded GrowthBond.

Prior to that, in 2014 Ferdinand co-founded EdTech company Coderstrust that provides education and work access to freelancers in emerging countries. The project was supported by Nobel Price winner Muhammad Yunus.

In 2018 Ferdinand started a fintech company GrowthBond that provides microloans for Facebook ads to small businesses in Africa.

In this chat Ferdinand tells TechEconomy how SMEs can leverage the platform to grow their businesses. Excerpt:

A few months ago we funded a small restaurant located at Afolabi Obe Street, Ejigbo, in Lagos. The name is DD’s restaurant. The business owner reached out to us intending to attract local visitors and increase awareness of the place. With the first loan, GrowthBond brought up to 50 000 advertisement impressions, which converted into 348 leads.    

What inspired you to launch GrowthBond? 

I started GrowthBond in 2018 in Copenhagen, Denmark with a vision of providing affordable capital to small businesses in emerging countries. My previous work is CoderTrust, which has provided education to freelancers in emerging countries since 2014. I spotted this problem among small businesses in Africa that are lacking access to capital and decided to create a solution for it.

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Aside Nigeria, do you have presence/ operate in other African countries? 

Apart from Nigeria, we also operate in Kenya and Gambia. We focus on funding small and micro online businesses that use online marketing to scale up their growth. Besides funding SMEs, we also aim to develop a local community of freelance marketing experts in each country. We organize digital marketing training to educate freelancers and prepare them to work for funded companies.

We also have plans to launch in Tanzania, Ethiopia, and Rwanda.

Your business strategy runs mostly on trust. How do you ensure that startups/individuals leveraging your platforms to sponsor their Facebook ads are genuine? 

We evaluate companies based on the data from their Facebook Business page. We are reviewing the business idea, its vision, and available business data to determine what kind of business it is and if it is legit. We also look at the business model and assess whether it has a healthy unit economics.

Do you have minimum or maximum amount one can raise? 

The average loan amount is $100. Once the company successfully repaid the first loan, it’s eligible for a bigger loan ($1000). The maximum amount is $50 000.

What is the duration each raise can last? For instance, if I am running a six months Facebook ad/campaign, can you wait till the end or I have to repay per month? 

The first loan will be enough for the 4-week campaign. The loan is repaid in 5 installments. Repayments are scheduled weekly, usually, the whole amount is repaid within 2 months.

Can you recall the success stories? 

A few months ago we funded a small restaurant located at Afolabi Obe Street, Ejigbo, in Lagos. The name is DD’s restaurant. The business owner reached out to us intending to attract local visitors and increase awareness of the place. With the first loan, GrowthBond brought up to 50 000 advertisement impressions, which converted into 348 leads.

We evaluate companies based on the data from their Facebook Business page – Ferdinand

Our other customer from Lagos said: ‘Before finding GrowthBond I had to spent $100 – $300 on advertising and none of the leads ended up converting to paying clients. So I started looking for a way to get some funds to keep advertising to get more customers. So when I saw Growthbond; it was just the solution I needed’.

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How many startups or advertisers have used your platform (from Nigeria) so far? 

So far we have funded over 200 companies in Nigeria (mostly in Lagos).

How much have you given out so far? 

Within a year, we have provided over 1000 loans, the average amount of one loan is $100.

Do you have exemptions with regards Facebook ads the funds can’t be used for; e.g political ads, illicit-sex or drug related? 

We do not provide loans for illicit companies or political ads. That’s why we evaluate each company and see if it’s a complaint with our (and Facebook) ads policy.

In a face of default on the part of a ‘loan’recipient’, how do you seek redress? 

We’re focusing more on evaluating new companies and assessing whether they will be able to get new customers and repay the loan. Our team is also controlling the campaign performance together with a dedicated marketing expert.

What is the interest rate like?

GrowthBond charges 20% commission on loans. So, if the loan is $100, the company needs to repay $120 in total (in 5 installments).

How can interested parties/startups contact GrowthBond? 

Just visit our website, https://www.growthbond.co and submit a loan application.

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