At CreditChek, we believe that financial inclusion shouldn’t be limited by borders. Our mission to empower Africans with reliable access to financial services worldwide is gaining momentum.

Recently, our CEO connected with key players beyond Nigeria, exploring partnerships that can help us transform how creditworthiness is assessed across regions. These conversations are a step forward in making cross-border credit history transfers a reality, ensuring that Africans can access financial opportunities no matter where they are.

Stay tuned as we continue to build bridges for financial inclusion.

They say love is blind, but let’s be honest; so is lending money without verifying creditworthiness.

Valentine’s Day is here, and while many are caught up in candlelit dinners and heart shaped promises, others are making financial decisions based purely on trust. Big mistake!!!

Think about it

Have you ever seen someone pull out their credit score on a first date? Probably not. Yet, people extend credit, give out loans, and even sign contracts without checking if the other party can actually meet their commitments.

It’s all good until the sweet talk fades, the bills pile up, and you're left wondering how you fell for another financial heartbreak.

At CreditChek, we’re all about love, but more importantly, we are about financial security. We help businesses and financial institutions verify income and assess creditworthiness of African consumers globally, ensuring that financial decisions are based on facts, not just feelings. Because in both love and finance, trust is great but verification is better.

So, this Valentine, whilst others are falling head over heels, make sure you’re not falling into avoidable financial risks.

Love might be unpredictable, but your finances don't have to be.

Visit our website to see how CreditChek helps businesses stay Smart, Secure, and Stress-free.

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CreditChek partners with CredPal to enhance creditworthiness verification for its new credit card business, while also expanding its vision for cross-border credit assessment across Africa and beyond.

Photo: Kingsley Ibe (CEO CreditChek) & Olumide Badewole (CredPal’s Head of risk management)

CreditChek, a leading credit assessment infrastructure provider in Africa, has partnered with CredPal to deliver creditworthiness and identity verification services for CredPal’s new credit card business. This collaboration represents a significant step for CreditChek as it strengthens its mission to make credit across Africa more accessible, transparent, and reliable.

At the core of CreditChek’s platform is its ability to simplify and enhance credit assessments. From verifying income to analysing credit histories and detecting potential fraud, CreditChek provides financial institutions with the insights they need to make informed decisions. This not only benefits businesses but also directly impacts consumers by reducing the time and effort required to access credit, paving the way for more people to participate in the formal financial system.

“We are excited to partner with CreditChek, a game-changer in credit scoring and reporting in Africa. What we love about Creditchek is how their innovative approach aligns perfectly with our mission to provide access to credit seamlessly across developing economies,” said Olumide Badewole, CredPal’s Head of Risk.

“Our collaboration is well poised toward fixing some of the industry’s long-standing challenges. Essentially, this partnership is about building a future where credit is fair and accessible to everyone,” he added.

Since its launch in 2022, CreditChek has facilitated over 300,000 verifications and supported over $30 million in loan approvals. Its innovative tools are trusted by over 80 financial institutions, including Moni, AjoCard, Trade Lenda, Gamp and Vetsark. Through this partnership, CreditChek is extending its impact, equipping CredPal with robust verification and risk assessment capabilities to drive the adoption of credit cards in Nigeria and beyond.

With its recently launched product, Spectrum, built in partnership with one of the Credit Bureaus, CreditChek is tackling the fraud risks inherent in money-lending services. Spectrum enables financial institutions to join a shared network where they can exchange data to protect themselves from chronic debtors. The product blacklists such debtors within the network and ensures their information is automatically updated with credit bureaus.

Addressing low credit card penetration in Africa

Creditworthiness is a method for assessing a potential borrower’s loan payment history to decide whether they are an eligible customer who
should be offered a future loan.

A lender’s willingness to trust users to pay their debts is determined by their creditworthiness.

A creditworthy borrower is one that a lender believes is willing, competent, and responsible enough to make loan repayments until the debt is repaid.

Make sure you use the right methods to verify the creditworthiness of potential borrowers before you offer loans to help protect your company against late or non-payments.

Here are a few methods for determining a potential customer’s creditworthiness

1. Run a Credit Report

Running a credit report is an effective method to assess a customer’s creditworthiness.

Credit reports provide current company information, payment history, management details, important financial data, and credit scores.

These credit reports will reveal whether a company can pay its debts.

2. Check Trade References

Trade references are important when dealing with suppliers and other companies.

These are sources that can show historical payment transactions between a company and a supplier.

Check the following with the potential customer’s trade references:

• The timeframe in which the parties have dealt
• Examine the potential customer’s account and payment history
• Consider it a red flag if you uncover a habit of late payments.

3. Use Big Data to Analyze Company’s Financial History

Companies can gain useful information about their potential customers through big data.

According to McKinsey & Company the credit market in Africa is valued at $1.7t and growing 6.2% YoY with an average NPL of 11.7% in 2021.

As the lending industry continues to grow, lenders are constantly looking for ways to streamline their processes and improve their ability to make informed decisions about loan applications. This is where Radar 2.0 comes in — a new product we have launched that helps lenders easily discover all NUBAN bank accounts linked to their customers’ mobile number or BVN, ultimately boosting the customer’s loan application.

Radar 2.0 is a game-changer for lenders, as it provides them with accurate and reliable data that can help them make better lending decisions. By leveraging the power of technology, Radar is able to scan through millions of data points to discover all the NUBAN bank accounts linked to a customer’s mobile number or BVN, providing lenders with a comprehensive view of their customer’s financial history.

One of the key benefits of Radar is its ability to boost the customer’s loan application. By providing lenders with a complete picture of the customer’s financial history, including all their bank accounts, lenders are better equipped to assess the customer’s creditworthiness and make more informed lending decisions. This can result in faster loan approvals and more favorable loan terms for the customer.

Another advantage of Radar is its ease of use. The product is designed to be user-friendly, with a simple interface or API integration that allows lenders to quickly and easily access the information they need. This can help to streamline the lending process and reduce the time it takes for customers to receive their loans.

Radar also helps to minimize the risk of fraud and identity theft. By verifying the customer’s bank account information, lenders can ensure that they are lending to the right person and that their loan funds are going to the correct account. This can help to protect both the lender and the customer from potential financial losses.

Overall, Radar is a powerful tool that can help lenders make more informed lending decisions and boost the customer’s loan application. Its ease of use, comprehensive data coverage, and fraud prevention capabilities make it a must-have for any lender looking to streamline their lending processes and improve their bottom line. We are excited to see the impact that Radar will have on the lending industry and look forward to continuing to innovate and improve our products to meet the evolving needs of our customers.

Finally

Our mission at Creditchek is to bridge the trust gap that exists between credit businesses and credit-worthy consumers in Africa.

We can’t wait to see what you build with Radar 2.0.

Lenders’ top priority should be to avoid any bad debts in the first place. As a result, lenders should be aware of their borrowers’ financial capabilities. You take a chance each time you extend a loan. It is simple to grant loans to reputable borrowers. However, the task becomes challenging when you want to expand your business and service to subprime customers.

Lenders have long been guided by traditional credit scores. Due to this scoring, banks and lenders could confidently make loan payments. More time and consideration were needed for those with lower scores. To determine whether they can grant the loan at all, lenders must go through a number of review procedures.

In the lending industry, rejections are typical. However, there are a lot of exceptional cases as well. Loans can also be granted on a conditional basis by banks, and other financial institutions. In these circumstances, traditional credit scoring alone is insufficient. The creditworthiness of applicants for loans must be assessed by lenders using important and relevant information and tools.

The keys to lowering lending risks are comprehensive applicant data and a credible evaluation procedure.

Here are 5 ways lenders can reduce risk when lending

1. Seek a thorough assessment of creditworthiness

Today, there are many data sources that offer a much more thorough picture of an applicant’s financial situation. These data sources are becoming more crucial every day in the world of digital banking. Digital lending platforms are being given permission by fintech firms to base their decisions on these data sources.

Data collection by businesses requires strict adherence to data privacy laws. The customer must formally consent to the sharing of their data, which may include sensitive information. This information provides businesses with a much clearer picture of the applicant’s creditworthiness.

Other credit information Includes:

1. Current account status and financial data

2. Employment and income information

3. Buying habits and financial statements

4. Payment history for phone, utility, and other bills.

5. Rental record

6. Property ownership

7. Records of any prior bankruptcies, among other things.

Alternative credit data is now being used by businesses to supplement current credit scores or to underwrite loans. Nearly 80% of lenders make use of at least one alternative source of credit data. 16% of lenders intend to use information from sources like utility bill payments or records of rental payments. Lenders currently use this information as a whole to more accurately evaluate borrowers. You can make wiser decisions more quickly with the help of this information.

2. Examine Thin profiles

Both a risk and an opportunity can exist with thin profiles. With the thin profiles of millions of borrowers, it is challenging to determine their creditworthiness.

Users with thin profiles have credit card accounts but haven’t made any use of them recently. Or perhaps they won’t pay for a while. Due to the fact that cash transactions are not tracked, those who use it to make purchases also have a low profile. A person’s credit score is negatively impacted by a thin profile. This does not necessarily imply that the applicant will not be approved for a loan, though.

For the lender, dealing with thin profiles is always risky. Alternative credit scoring may offer a remedy in these circumstances.

Unconventional data sources can show when a person is eligible for a loan. They can also clearly show whether there is a high degree of risk.

3. Employ cutting-edge loan systems

Alternative credit scoring information reduces the risk of lending. However, lenders must digitize their procedures in order to use these data sources. Combining conventional credit data with alternative data can show lenders a lot of opportunities. In just a few minutes, modern loan systems can assist lenders in determining whether a borrower is creditworthy. Using alternative data sources, the portion of borrowers previously deemed unserviceable by banks or lenders can now qualify for loans. Lenders can also disqualify high-risk applications using this information.
Numerous loan systems provide out-of-the-box integration with various sources of credit data. Using APIs, it is also possible to incorporate different data sources. It combines information from multiple sources. All information is transparent. After that, the system can determine whether a user is creditworthy or send the consolidated data for manual underwriting.
A growing trend in the world of online lending is AI-assisted underwriting. Without the lenders having to take any manual action, borrowers can apply for loans and receive them.
Borrowers must, however, consent to sharing information that will enable the platform to evaluate their financial situation.

4. Automate collection processes

Reducing bad debt and maintaining the health of the lending industry are achieved through prompt collections.

A dedicated collections system encourages borrowers to make on-time payments while a loan origination system makes it simple to disburse loans to qualified applicants. Lenders can use collections CRMs that can automatically assign borrowers to staff members and agents.
Keeping track of borrowers can be difficult for lending businesses as their company expands. CRM is a good choice because of this.
Additionally, a specialized tool can classify borrowers and suggest recovery methods. Agents may be reminded to contact clients again.
Depending on their actions, it can automate communications with debtors.

5. Analyze collection metrics in real-time

Businesses can regularly assess the performance of their portfolios thanks to dedicated loan origination systems. Companies can maintain accurate and effective underwriting procedures thanks to this analysis. For instance, when using alternative scoring, some individuals with good traditional credit scores may raise red flags. Some applicants with thin profiles might pose a significant risk.
You can make better decisions when underwriting loans by using these analyses.