LAGOS, Nigeria - The availability
of domestic credit is a key requirement for consistent economic growth in
developing countries. The vitality of financial services such as banking,
savings, debt and equity financing, investment management, and point-of-sale
lending is largely dependent on the maturity of its domestic credit industry.
Nigeria’s domestic credit market pales in comparison to similar countries of
the same size.
For context, credit to the private sector in Nigeria is about 12 percent
of GDP, lower than South Africa’s 129 percent and Malaysia’s 134 percent. High
ratios of credit to the private sector in these countries have helped to ramp
up real sector growth, create innovative innovation possibilities for
technology-enabled businesses, accelerate financial development, ensure the
efficient functioning of the economy and guarantee the prosperity of the
private sector.
The Central Bank of
Nigeria (CBN) and other development partners including the Bank of Industry
(BoI), the Bank of Agriculture (BoA), among others have embarked on significant
credit injections to support the critical sectors of the economy, but the
paucity of credit assessment infrastructure ensures many potential borrowers
are denied access to loans, and when they do, they can be charged as much as
triple the base interest rate. This financial exclusion has significant
outcomes for the real sector as lack of access to credit can be a disincentive
to entrepreneurship, investment, and economic growth.
Canadian fintech
startup and credit assessment company, Periculum, has launched in Nigeria to
tackle the challenge of domestic credit to the underserved markets. Focused on
improving financial inclusion in emerging markets through automated credit
assessment tools that close the consumer credit gap and help financial
institutions provide credit facilities to the financially excluded while making
smarter decisions, Periculum officially launched its financial service product
offerings at a media interaction today.
Speaking at the launch, Michael Temitope Collins,
Periculum’s founder and Chief Executive Officer, said "Africa needs
domestic credit to stimulate real economic growth. And this is not only
bank-to-business credit; it can also be digital lending for short-term credit
as well as “buy now, pay later” schemes. The absence of tech-enabled credit
assessment infrastructure has limited the quality and quantity of lending and
may be behind the risk premiums borrowers have to pay, and the harassment
practiced by predatory lenders in countries like Nigeria. Periculum will change
that. We are a top provider of data analytics and credit assessment services
targeted explicitly to underserved markets. We help our customers to reduce
their lengthy loan application processing times and loan default rates and
offer loans to the underbanked and unbanked consumers as well as micro, small
and medium-scale enterprises. With reliable, tech-enabled, credit assessment
services, financial institutions can increase lending to those that need
credit.”
The company
has also announced the appointment of a Managing Director, Damilola Aluede, to
accelerate its business in Nigeria.
Founded in 2019,
Periculum helps its banking and lending customers identify fraud risk, assess
creditworthiness, and analyze existing data. Periculum offers real-time
decision-making, analysis, and credit underwriting solutions to financial
institutions including banks, non-banking financial companies, and fintech
companies. By providing information on the financial worthiness of customers
and automating the loan decision process, Periculum’s customers can gather and
analyze borrower information and assign a credit score faster, with real
outcomes on financial inclusion in Nigeria and other markets.
Periculum offers
data aggregation APIs and platform solutions that aggregate data from partners
including open banking APIs and the credit bureaus, to provide complete
financial and data profiles of prospective borrowers and third-party entities.
Some of its clients include Fundii, Lendaba, Sycamore, Golden Ox Partners, Vola
Africa and Venero.
On its product
roadmap and current services, Collins added “We offer services that include
Credit model development, SMS data aggregation and analysis, financial data
analysis, and other data analytic solutions. We can help our customers with
solutions such as fraud detection, insights for lenders based on customer
segmentation and customer lifecycle value, insights to retailers and ATM
operators, and several other benefits".
The startup was
accepted into Techstars in 2021 and is among the 2021 Techstars Montréal AI cohort,
as well as the Founder Institutes’ Select Portfolio. In October 2021, Periculum
raised a $620,000 pre-seed funding round to help it expand its team, improve
product development and scale its operations in Nigeria and other markets. The
company currently delivers services to customers in Canada and Nigeria and
plans to expand to Ghana, Kenya, and Egypt before the end of 2022.
For many countries
in Africa, there is still a financial divide. By tackling the credit assessment
challenge, Periculum can build the financial infrastructure that helps in
addressing the issue of access to financial services and improves development
outcomes for millions of people, with better opportunities for businesses,
financial institutions, and lenders.
