In commemoration of its 10th year anniversary, the founders of Carbon – one of Nigeria’s digital lending platforms, Chijioke Dozie and Ngozi Dozie, shared their success story in navigating the tech ecosystem, with their unique customer-centric models which have distinguished them.
At a press briefing session, the founders noted that a major achievement for the team over the years is being able to provide access to credit and finance to many Nigerians.
A highlight of the conversation was their claim that Nigeria is one of the most fertile markets for Fintech companies in Africa and a rightly regulated destination for tech innovations to thrive, irrespective of the ratings by Nigerians themselves.
For them, Nigeria offers the right market in terms of regulation due to the forward-thinking abilities of the regulators. This provides a soft spot for market entry.
According to Chijioke Dozie, Co-founder, the imperfections of the market also provide innovators with real-life market challenges they can leverage to build sustainable business models.
“Nigeria is one of the most rightly regulated tech space in Africa, and that’s why it continues to attract more funding investments for startups…”– Chijioke Dozie
Chijioke said that Carbon has been a beneficiary of some of the developmental policies of the Central Bank of Nigeria, like the Bank Verification Number (BVN), for instance, which allowed their team access to their customers’ information without necessarily conducting physical verification.
Early successes for Carbon
According to the co-founders, they provide services that are customer-centric, which includes making loans accessible for everyone at the lowest cost possible as well as enabling seamless finance decisions and helping other businesses scale.
A major factor that played a role in their service delivery space was the development that occurred at the early stages. This enabled the company to fully digitalize into the first digital lending App in Nigeria, launched as Paylater in 2016 and operated remotely.
Ngozi recalled that the company was the first digital lender to give customers credit reports. Then, customers could go on to verify their credit status from any of the credit bureaus.
We were the first fintech in Nigeria, if not Africa, to get a credit rating from GCR, and that was because we realized that finance is not just about credibility but also about trust– Ngozi Dozie
Carbon’s unique offering
Since its rebranding to become Carbon in 2019, the fintech company has evolved into a fully-functional service platform that offers cost-effective bill payments, free fund transfers and high-yield savings and investment options to users, in addition to its original loan option.
In addition, it started to offer Nigerians what many conventional financial institutions in the country are unable to guarantee: no charges when they use the platform to carry out financial transactions or shop with Carbon Zero.
There is no financial institution in the country that is doing what we are doing currently through our value proposition, and this is what distinguishes us in the fintech space. Our customers get to enjoy seamless transactions, get their debit cards on time and borrow without fear of data and privacy violation.– Ngozi
Carbon later started to pay interest to customers monthly based on their savings balance. Another interesting offering is a 1% interest payment on the total spending of a customer at the end of the month who use the platform for their transactions.
Another major value proposition that has kept Carbon apart from its competitors is its “buy now, pay later’ model. This allows customers to spread payment over time based on their convenience when they shop for items using Carbon.
The founders emphasized the need for Nigerians to eliminate the stigma associated with people taking loans. Ngozi explained that credit facilities are a normal phenomenon around the world, and people should be encouraged to take loans when they see the need, to kickstart a business or even sustain a need at any point in time.
On loan sharks
On the emergence of loan sharks and a lasting solution for distinguishing them from genuine credit-giving facilities, Ngozi said that the Central Bank of Nigeria (CBN) and the Federal Competition and Consumers Protection Commission (FCCPC) are doing so much already to curb these loan sharks.
He, however, admits that more is still required in the areas of implementation and enforcement of these policies.
He noted that the problem was one of supply and demand. Individuals continually want loans from businesses that offer rates that are wild off the mark and then go on to fall prey to being harassed and molested by these supposed credit businesses.
On curbing high loan defaults, he noted that a model that has worked for them involves a collaboration with banks and other financial institutions like the Credit Bureau to have access to the credit information of individuals and issue credit on that basis.
This way, a serial defaulter can be identified before he or she gets more loans or if a defaulter attempts to leave the country.
“What we have done overtime is show Nigerian financial institutions that Nigerians are credit worthy. Lending for 10years is a testament that Nigerians do actually pay back loans…”– Chijioke
On funding and expansion
Chijioke noted that Carbon has had to be careful with fund management, with $15 million as its major raise since 2015. He said that when they started in 2015, Nigeria was not a big destination for foreign investment inflow as it is now.
We had to think towards releasing products that the customers actually wanted. Given the funds raised, we knew people wanted loans and so we stuck with that with the least cost as much as possible and not digressing into other services immediately. We have also had some disciplined investors too.
On expansion into Kenya, South Africa and Ghana, they mentioned that operating a business in these countries is quite different from Nigeria.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!