How Blocka Cash got its lending groove
Blocka Cash is one of the fastest growing and the easiest digital lenders in Nigeria with a clear ambition to become the lender of choice in a market where over N74 trillion of credit gap is a perennial problem. The Blocka Cash team set out to rewrite the rules of the game by removing the hurdles that limit access to credit just by a few clicks, providing financial support to everyday Nigerians starting from as low as N5,000 up to N5,000,000. Since launching, within the first few months, Blocka Cash has engaged over 70,000 Nigerians seeking credit every day since April 2021.
But the journey has not been without some challenges and here is where the story begins....
Filling the credit gap in Nigeria is daunting!
In a market with relatively increasing smartphone penetration, coupled with low levels of financial inclusion, the founders of Blocka Cash, passionate about taking practical steps to address this issue, took up the challenge. “Despite the market being awash with lenders, we are not even scratching the surface- which gives us confidence that Blocka has a good spot. Specifically, we are looking to solve the problem of access to credit in Nigeria by removing unnecessary barriers which hitherto made the borrowing process onerous for the majority of Nigerians”.
The team spotted the opportunity to provide an innovative user-friendly credit solution to everyday Nigerians, thereby addressing the issues faced by these underserved market segments.
However, they were met with an even bigger problem – “How do we build a smart, easy, and user-friendly lending app that helps Nigerians to meet their financial needs without deep technical know-how and limited resources?” To put this in better context, though the team had lofty aspirations to harness this opportunity, they were constrained by the huge cost of building the technology stack and the lack of access to quality and affordable data to make underwriting decisions. Furthermore, the founders, who are finance expert, were not programmers and therefore lacked the arcane and deep technical know-how of building lending apps and the associated backends.
A typical digital lender seeking to build a good technology platform would have to shell out at least $200,000 and be ready for a minimum of $7,000 for technology infrastructure cost. Additionally, should the founders proceed with a proprietary build plan, they would need to maintain an internal team of talented engineers and product managers. However, effective management of the technical team is only possible to the extent that the founders have the time and deep expertise in technology.
Also, access to data to make effective lending decisions is hard to come by and when available, they are very expensive especially for smaller ticket loans which is the segment that Blocka Cash is targeting. It takes weeks for defaulting borrowers’ information to appear in credit bureau data and that itself costs an arm and two legs.
The Blocka Cash team realized that building its own lending solution would be resource and time demanding, especially considering the requirement for ongoing technical support and the cost implications. The founders made the best decisions of their lives; Blocka Cash turned to Lendsqr’s lending-as-a-service platform to accelerate their dreams in the most time and cost-effective way
Lendsqr is a lending-as-a-service developed primarily to help small to medium size lenders scale their credit business to millions of Nigerians and Africans instantly. Lendsqr’s LaaS is 100% cloud-based with a sustainable and affordable technology stack that is tailored to simplify complexities faced by lenders. Ahead of the curve, the Lendsqr solution offers a superior technology stack, ranked best-in-class to similar solutions globally. Now you understand why the match between Blocka Cash and Lendsqr was struck!
The Lendsqr team worked collaboratively with Blocka Cash: From revalidating and stress testing the business model, shaping the brand story of the business to supporting the Blocka Cash team with the app build and technology configuration required to deliver the relevant products that form part of their credit product offering portfolio in the shortest possible time. Additionally, Lendsqr provided guidance for regulatory and technical compliance, making it easier for the application to go live on all stores as planned.
“We could never have launched efficiently and as quickly as we did without Lendsqr’s partnership…”
– Olayinka Alimi, Founder, Blocka Cash
Blocka Cash is lending securely at scale
It is evident that Blocka Cash derived extensive value from launching their digital credit fintech on the Lendsqr LaaS system. With Lendsqr’s support, they were able to further refine their product proposition in a market with competing substitutes. Blocka Cash launched into the Google and iOS Stores in weeks, a record for digital lending in Nigeria at less than 2% of what it would have cost them to build their own technology from scratch.
Over the past few months, more than 70,000 Nigerians have come to the app to seek financial assistance at their moments of need. But most importantly, the data ecosystem which Lendsqr provides has allowed Blocka Cash to disburse their loans very fast and with an assurance unparalleled within the Nigerian digital lending industry.