Founded by innovative entrepreneurs with deep roots in Africa’s financial industry, Bfree is set to enhance credit management, placing ethics and technology at the fore of its operations.

The genesis of Bfree traces back to the founders’ dissatisfaction with prevailing credit collection practices across Africa.

Witnessing the adverse effects of aggressive debt retrieval techniques employed by predatory digital lenders, the company resolved to challenge the status quo. 

Bfree is working to ensure dignity and respect in all borrower-lender interactions. The company has been successful in implementing strategies that ensure fair and just debt recovery processes, helping borrowers to be treated with compassion and understanding, while still working to recover debts that are owed. 

Its focus on ethical debt recovery has gained the trust and respect of many borrowers who have found themselves in debt and in need of assistance.

Led by CEO Julian Flosbach, alongside co-founders Chukwudi Enyi and Moses Nmor, Bfree embodies a vision of financial empowerment and integrity. The current fund raised included diverse investors such as Capria Ventures, Angaza Capital, GreenHouse Capital, and others. 

Bfree’s innovative approach to debt recovery centres around empowering borrowers while ensuring the sustainability of lending institutions. 

Through scalable debt recovery methods, including self-service platforms and conversational AI tools, Bfree prioritizes humane interactions and borrower autonomy. The company leverages technology and ethics, to bolster the credit management sector.

With its recent funding, Bfree will expand its footprint across key African markets, attracting major banks and financial institutions in Ghana, Kenya, and Nigeria. 

While initially targeting digital lenders, Bfree strategically shifts its focus towards banks, recognizing their significant contribution to revenue generation. 

Beyond debt recovery, Bfree envisions a secondary debt market that facilitates the purchase of non-performing loans from African banks.

The company is utilizing predictive algorithms and analytics solutions to help banks scale through secondary markets with precision and efficiency, mitigating risk and unlocking new avenues for growth.

At the U-Law Black Friday 7.0, the panellists, including Tosin Dabiri, Investment Manager at Chapel Hill Denham; Elo Adhekupoli, Senior Associate at UUBO; and Chukwudi Enyi, Co-founder of BFREE, spoke broadly on insights and advice to overcome the challenges faced by startups in these domains.

With a focus on credit management, the significance of having robust processes in place before extending credit to customers was the first touchpoint. Chukwudi Enyi, Co-founder of BFREE, emphasized the importance of establishing the right processes and a professional approach, especially for startups offering non-collateralized loans. He highlighted the need for a proper credit score, customer notification systems, and a strategic team encompassing product, risk, and market expertise.

Tosin Dabiri, Investment Manager at Chapel Hill Denham, added insights from an investor’s perspective, underlining the necessity for startups, particularly fintech lenders, to have a well-rounded team, including risk professionals. She noted the need for expertise in risk assessment, offline resources for debt recovery, and the significance of maintaining profitability and liquidity.

The conversation seamlessly transitioned into debt restructuring, with a spotlight on the indicators that signal the need for such measures. The panellists emphasized that companies should proactively approach restructuring when facing challenges in meeting financial obligations, sustaining profitability, and adhering to conditions and covenants set by lenders. Negative equity, a decline in market share, and breaching agreed-upon conditions were identified as key indicators.

Elo Adhekupoli, Senior Associate at UUBO, elaborated on the negotiation aspects of debt restructuring. He highlighted the need for startups, especially in the fintech lending space, to have experienced risk professionals. Elo emphasized the importance of technology, such as KYC (Know Your Customer) processes, and cautioned against heavy reliance on debt without considering equity options for capitalization.

Chukwudi Enyi delved into the specifics of debt recovery strategies employed by BFREE. He outlined a unique and ethical approach that focuses on understanding customers’ perspectives and vulnerabilities. By using psychological triggers and empathetic communication, the startup aims to create a sustainable relationship with customers who have defaulted on loans. Chukwudi stressed the significance of qualifying customers based on their ability and willingness to pay, using this information to tailor payment plans that align with customers’ financial capacities.

The discussion concluded with advice on striking a balance between extending credit to customers and ensuring the financial stability of startups. Tosin Dabiri cautioned against using equity for lending purposes, urging startups to preserve equity for essential business functions. She stressed the need for startups to focus on reducing costs, exploring new revenue streams, and seeking debt as a viable option for sustaining lending operations.

In essence, the panellists at U-Law Black Friday 7.0 highlighted the complicated relationship between credit management, debt restructuring, and recovery, offering valuable insights for startups having difficulties with these challenges in business.