SeedFi is targeting the peri-urban populations, small business owners, artisans, and other people who do not have the typical collateral/credit history required by traditional lenders before they can be given seed for their business and personal use.
According to Pelumi Alli, the Founder and CEO, this resolve came about because 67 percent of Nigerians do not seek credit, even from family and friends, due to non-availability of data for decision-making, limited access to formal credit/financial services to certain demographics, lack of financial education, and lack of trust in the system.
He stated that aside expanding financial access to under-served groups, SeedFi will also mitigate the challenges by providing financial education and trust-building activities with consumers; sharing information on how to build a good credit profile; how to manage personal finance; and providing flexible repayment structures.
He stated that SeedFi provides access to seed funds to borrowers, ‘’by leveraging data from various data sources to assess creditworthiness and offer loans to individuals and businesses with limited or no formal credit history’’.
Alli, who is passionate about using data-led services to create user-centric lending solutions that will make a difference in people's lives, stated that SeedFi was created out of a need to reduce the risks around lending from the standpoint of data.
‘’At SeedFi, our vision is a world where the dreams of young Africans are supported through access to credit and financing. We are improving the credit experience for borrowers and managing risk for lenders by gathering and learning from different data touch points. We are bridging the financing gap by providing flexible, convenient, and affordable digital lending solutions that are tailored to meet the needs of our customers, wherever they are’’, he affirmed.
Samaila Dogara, SeedFi Co-Founder and Chief Commercial Officer, said its pull factor from others in the market is that it reduces principal balance interest calculation; in that each time a customer makes a repayment, it applies a portion of the amount to reduce the principal outstanding, and this ensures that the customer pays less in interest charges on each repayment, it can also reschedule customers loan repayment date for ease and convenience.
‘’We have what we call cluster, which is a group lending feature that allows customers to take loans in groups to meet specific financial needs. For example, a group of friends can form a cluster which allows them access a group loan start a business, or to go on holiday. With this feature, the group members are accountable to one another for repayment of their loans so that each member maintains a good credit score’’, says Dogara, experienced in finance and investments.
He stated that SeedFi does not charge any hidden fee, and all fees are explicitly stated before they are charged. He asserts, ‘’One of our core values is integrity and transparency which means that we present our terms and conditions in clear terms that are easy to understand; we do not access customer information without their consent; and upon loan approval, we provide an offer letter with an apparent breakdown of the loan terms and repayment schedule which customers are encouraged to read and accept before the loan is disbursed’’.
Alli added that the industry's future is bright as according to research, as financial education improves, middle to low-income earners are more willing to utilize credit instead of depleting their savings for significant purchases. This shift due to the growth of the digital economy, he added, has created opportunities in the Buy-Now-Pay-Later (BNPL) sector and demand for credit cards, which are also some of SeedFi’s focus areas.