PayHippo, a Nigerian fintech startup, has acquired $1 million in pre-seed funding for its large-scale expansion.
The company wants to expand to additional Nigerian locations and grow its engineering workforce.
PayHippo was founded in January 2020 with the purpose of assisting SMEs in obtaining funding and improving their credit scores.
Traditional banks struggle with this because, despite controlling two-thirds of the country’s economy, they only provide limited financial access to these enterprises.
SMEs also account for more than 70% of all job openings in Nigeria.
“As a fintech company, the tech component of what we do is extremely crucial, since it’s truly what drives how we can access the credit readiness of that SME & how much to provide them,” PayHippo co-founder Chioma Okotcha said about the funding. We’re able to give a loan that is within a safe range because the tech does all of this math in the backend, works out the underwriting, evaluates who the consumer is, and we’re able to issue a loan that is within a safe range.”
After identifying the country’s SMEs’ needs and growth potential, permitting secure funding for them is an opportunity worth taking.
After the epidemic wrecked some businesses and caused salary cuts, the startup began disbursing its first loans in 2020.
PayHippo says to have provided N1.4 billion in over 2,600 loans to businesses since its launch in 2020. Grocery stores and small retail outlets make up the majority of these enterprises.
PayHippo’s automated products gather a lot of information from its customers so that they may better understand their business model and provide support that is personalized to their needs.
They intend to employ technology to calculate client averages and analyse cash flows in order to deliver a loan offer that is within a safe range as a fintech company.
This is to ensure that the payback procedure runs smoothly.
Loanees are not obligated to pay back until the conclusion of the loan cycle, therefore PayHippo’s repayment schedule is quite flexible.
The company believes in the growth potential of SMEs in Nigeria because it has such a solid plan in place.
To keep up with its growth, the business will use the $1 million investment to hire more engineers and a Head of Finance.
PayHippo will be able to reach out to more small businesses in need of funding and credit building as a result of this.
Because SMEs account for more than 60% of the country’s GDP, the expansion will boost the economy’s net value and generate new revenue.
Read more on Tech Gist Africa:
Zeepay, a Ghanaian fintech, has completed a USD7.9 million Series A funding round
Chipper Cash, an African fintech startup, has raised $100 million in a Series C funding round