Enhancing Small Loan Availability in Nigeria through Lendsqr's AI Integration?
In a groundbreaking development, Nigerian lending software startup, Lendsqr, is developing an Artificial Intelligence (AI) model to assist underbanked and vulnerable populations in accessing loans. This innovative initiative, partially funded by the Nigerian government and tech giant Google, seeks to bridge the significant credit gap in the country.
The AI model, currently under testing, will enable borrowers to interact directly with the system, providing video or voice responses to questions about employment and repayment plans. The model is designed to predict whether a borrower is likely to repay or default, evaluating borrowers' voices and facial expressions to assess loan eligibility.
The loans offered will range from ₦30,000 ($18) to ₦50,000 ($31), a sum that could be life-changing for many Nigerians. Lenders must review a checklist to assess a borrower's creditworthiness, including the five Cs: character, capacity, capital, collateral, and conditions.
Lendsqr's AI model could potentially reduce lending costs for fintechs like Kredi, Snapcash, and Blockacash, thereby broadening their customer base and making credit more accessible to Nigerians in need. If successful, the model could provide access to small, foundational credit, a critical step towards financial inclusion.
Lendsqr's model is primarily focused on African countries, including Kenya, Ghana, Ivory Coast, Malawi, and South Africa, where the issue of access to loans is most significant due to the lack of documentation. The company aims to assist lenders in evaluating a borrower's ability and willingness to repay a loan.
The launch of the model will occur once it reaches 90% accuracy. Lendsqr plans to make the data available to competitors for use in their loan systems, fostering competition and promoting transparency in the lending market.
Lendsqr serves over 2.7 million users and supports more than 7,000 lenders, managed by a lean team of fewer than 40 people. The company focuses on building efficient systems and tools to handle scale without increasing headcount significantly, aiming for sustainable growth.
By facilitating lending operations across a wide network of lenders, Lendsqr could enhance access to credit for small businesses and individuals, potentially boosting economic activity in Nigeria. The platform's ability to connect borrowers with multiple lenders could foster competition, leading to more competitive interest rates and better terms for borrowers.
Open banking, expected to transform Nigeria's credit landscape, could further enhance Lendsqr's impact by providing a platform where borrowers can compare rates in real-time, promoting transparency and competition.
In summary, while the specific use of AI for assessing loan eligibility based on voice and facial expressions by Lendsqr is not detailed, the company's operations and the broader trend of open banking could significantly impact Nigeria's economy by improving access to credit. Lendsqr also intends to pilot the model in Canada to assist immigrants and new students who typically face challenges securing credit. The AI model is currently 76% accurate and is designed to assist Nigerians without financial documentation in accessing small loans.
The AI model developed by Lendsqr, currently under testing, is designed to evaluate borrowers' voices and facial expressions to assess loan eligibility, potentially revolutionizing the business sector by making credit more accessible to underbanked populations in Africa. Leveraging cutting-edge technology such as artificial intelligence, this initiative could foster competition and promote transparency in the finance industry, contributing significantly to economic growth in countries like Nigeria, and potentially expanding to Canada to assist immigrants and new students with limited financial documentation.
