BFREE, a Lagos-based investor focused on distressed credit, has raised fresh capital to scale its acquisition of non-performing loans across Africa. The funding round was led by AfricInvest through its Financial Inclusion Vehicle fund, with participation from Algebra Ventures and existing investors. Financial terms were not disclosed. The company said the capital will boost its capacity to buy larger loan portfolios and enter new African markets.
Digital lending growth across the continent has led to a surge in unpaid loans, pressuring banks and fintechs. BFREE purchases these defaulted loans and uses structured repayment plans to recover value, managing over 11 million borrower accounts from more than 35 transactions. CEO Julian Flosbach said many financial institutions lack efficient ways to handle non-performing retail and SME loans, and the new funding allows BFREE to scale faster.
Algebra Ventures described the move as a step toward building critical infrastructure for Africa's credit markets. Partner Omar Khashaba noted that unresolved retail and SME debt runs into billions of dollars annually. BFREE's model emphasizes ethical collections through technology, avoiding aggressive recovery tactics. It also offers forward flow agreements, enabling lenders to sell newly defaulted loans continuously. AfricInvest's Patrick Herrmann said institutional buyers like BFREE are needed to manage small-ticket defaults efficiently.
The company plans to use the funds to strengthen ties with financial institutions and expand operations in high-demand markets. Industry observers believe such models can improve liquidity and support responsible lending as Africa's credit ecosystem evolves.
BFREE claims to champion ethical debt recovery while profiting from defaulted loans that many borrowers cannot afford. If the company is collecting from struggling SMEs and low-income borrowers, its definition of ethical collections needs public scrutiny. Nigerians already burdened by high interest rates may find little relief under a system that monetizes their financial distress.
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