“We had seen that traditional banks and lenders wouldn't loan small businesses mainly because there were no credit scores, or the collateral requirements were too high. It is this financing gap that Payhippo was designed to bridge since it was founded in August 2019.
However, a lack of access to credit continues to hinder their growth and limit their contribution to the country’s GDP, according to a study about bank loans and SMEs in Nigeria, published by the Ilorin Journal of Human Resource Management. SMEs are the force behind Nigeria’s economy accounting for 96% of businesses and 84% of employment in the country. Ours is also a product that works for the SMEs in terms of a flexible repayment structure,” Okotcha said. “We really focus on keeping this under three hours, and making sure that businesses can get the money they need when they need it. A bank loan application also requires a visit to physical branches and extensive paperwork. The digital lender says it disburses short-term loans in less than three hours, a record that remains unmatched by traditional banking institutions in the country, which often require borrowers to meet stringent conditions, like regular account activity and the maintenance of minimum operating balances. “We capture our data from the loans we issue, and more talent in the team would allow us to optimize our technology to serve our customers better,” she said. The company’s co-founder and chief operations officer, Chioma Okotcha, said they are looking to hire more engineers and data scientists. This is the largest amount Payhippo has raised to date after receiving $1 million in pre-seed funding earlier this year. The round was led by an array of angel investors, including Ham Serunjogi and Maijid Moujaled, the co-founders of the African cross-border payments company Chipper Cash Olugbenga Agboola of the San-Francisco based payments firm Flutterwave Bolaji Balogun, the CEO of investment banking firm Chapel Hill Denham and Hakeem Belo-Osagie, the founder of Metis Capital Partners. Nigeria’s lending startup Payhippo has raised $3 million in a seed round, funding the company plans to use in sourcing the talent needed to optimize its technology as it ramps up effort to extend speedy credit to more small and medium-sized enterprises (SMEs) in the West African country.
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