Nigerian tech-driven debt collection startup, Bfree, has secured a $3 million investment to advance its goal of improving debt recovery through ethical approaches.
Bfree was established to streamline and introduce ethical debt recovery processes, prompted by the negative impact of aggressive collection methods observed in the practices of predatory digital lenders.
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Bfree recently expanded its client base to major banks in Ghana, Kenya, and Nigeria. CEO Julian Flosbach emphasized a strategic shift towards collaborating with banks, which now contribute up to 70% of the company’s revenue, consolidating its client base to 14 institutions.
Since its inception in 2020, the company has implemented a range of scalable debt recovery techniques, including a user-friendly self-service platform enabling borrowers to establish new payment plans. Additionally, it introduced conversational AI tools like chatbots and callbots as part of its collections-as-a-service solution, ensuring a humane approach to post-sales services based on behavioral and financial data.
While 92% of customer interactions are automated, Bfree maintains a call center manned by a small team to handle customer inquiries and follow-ups. The company also introduced Workflow, a loan collection management SaaS aimed at companies with in-house collection teams or those hesitant to outsource.
Bfree stands out as one of the few tech-enabled credit recovery firms in Africa, particularly in an industry that heavily relies on traditional methods such as call centers for debt collection. With a loan portfolio exceeding $400 million, the company has achieved a collection rate of 12.5%.
Looking ahead, Bfree plans to establish a secondary debt market, enabling third-party investors like hedge funds to purchase non-performing loans (NPLs) from African banks. Leveraging its data analytics capabilities, Bfree aims to accurately evaluate distressed assets and assist banks in offloading risky loans from their balance sheets.
As the company consolidates its presence in key African markets, it adopts a more strategic approach to expansion, recognizing the diverse market dynamics and the need for tailored solutions in each region.
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