CARMA to Expand Credit Lending Capacity to Nigeria

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By Adedapo Adesanya

Kenyan fintech startup, CARMA, which provides lending companies with access to real-time credit data on a peer-to-peer basis through a pay-as-you-go service, has raised funding from Nigerian venture capital (VC) firm, Microtraction, to set up a head office in Lagos.

CARMA is tackling the gap in markets underserved by credit bureaus by providing lending companies with access to vital data to facilitate lending.

Though headquartered in Nairobi, the startup’s initial launch took place in Zambia, and CARMA will now also launch operations in Nigeria after raising a funding round from Microtraction, an early-stage VC firm that invests in startups at the very earliest stage of their development.

Although the funding amount is undisclosed, Microtraction announced earlier this year it had changed its standard deal by increasing its ticket size to $25,000 and reducing the equity it takes to seven per cent.

CARMA will use the funding to launch its Lagos office, a move which comes as the startup looks to foster seamless customer support and account management by providing a fully decentralised protocol of data sharing for enterprises to fuel credit assessments with extra data points.

This will also help lending and non-lending organisations monetize their data to create a passive revenue stream.

The company also connects enterprises by providing a data supply chain for organisations with access to CARMA services, contributing to data-driven business decisions.

Speaking on the development, Mr Ted Martynov, CARMA’s co-founder and chief executive officer (CEO) noted, “Our early-stage venture funding allows us to invest in growing our presence across Sub-Saharan Africa and our ability to address the gap in the credit data ecosystem while strengthening our network of clients.”

“We are also focusing on supporting companies with quality data in the credit decision process to avoid non-performing loans.

“We anticipate on strengthening our services across the region, which will bring us closer to helping companies enhance data sharing to build proper credit assessment procedures,” he added.

This is a fresh addition for Microtraction which has so far backed a host of Nigerian startups including Accounteer, Riby, Thank U Cash, CowryWise, Wallet.ng, Schoolable, 54gene, Termii and Festival Coins.

However, CARMA is only its second investment outside its home market after Ghana’s Bitsika.

“We are excited to be CARMA’s partner as part of their Africa rollout. Microtraction supports several great tech teams across the continent and we are acutely aware of the gap in access to credit data, which we believe is a fundamental one to fill,” said Mrs Chidinma Iwueke, partner at Microtraction.

“Providing a solution that addresses this lack of data improves the quality of business processes and also helps the mass populous with access to financing, which of course, is very critical during these times as the world continues to fight a health and economic crisis.

“We look forward to working with CARMA as we continue to support teams working to address infrastructural challenges across Africa,” she added.

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