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CARMA targets West Africa amid growth in credit market

The credit market in Africa is in dire need of financial data to unlock lending opportunities to individuals and companies said Ted Martynov, co-founder and CEO of credit data marketplace CARMA as the company targets West Africa and readies to set up headquarters in Nigeria.

CARMA provides lending companies with access to credit data on a peer-to-peer basis via a pay-as-you-go service.

With COVID-19 adding strain to Africa’s micro-lending sector,CARMA believes there is an opportunity to entrench the value of its data-sharing API tool to streamline data sharing and credit lending processes.

The company recently secured a services agreement in Zambia to support 1,122 credit unions and is now establishing its West African regional headquarters in Nigeria, following support in the form of an undisclosed pre-seed investment by pan-African investment company, Microtraction.

CARMA is aware that data credit companies have had a rampant growth in Nigeria with entities such as Okra having attracted US$1-million investment, and financial credit service Mono gaining traction in the market.

The company referred to the World Bank private credit bureau coverage 2019, according to which only 14% of adults in Nigeria have a credit history from credit bureaus and only financial institutions are currently submitting data on individuals and commercial entities on a regular basis.

However, it also pointed to a Consultative Group to Assist the Poor (CGAP) report which said the West Africa credit market is catching up to East Africa, driven by more widespread adoption of mobile money.

An excerpt from the report reads: “The commercial success of digital credit in East Africa has paved the way for the rise of similar lending products across the continent. This is especially true in West Africa, where the growth of mobile money and an enabling regulatory environment have created the right conditions for digital credit. Ghana, Côte d’Ivoire, Nigeria and Senegal have thriving digital credit products today.”

Martynov added: “We are focusing on supporting companies with quality data in the credit decision process to avoid non-performing loans. We anticipate with the strengthening of our services across the region, will bring us closer to helping companies enhance data sharing to build proper credit assessment procedures.”

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