AI-driven Lending Platform Payhippo Secures $3 Million Seed Funding

Small businesses play a significant role in most economies and contribute to job creation and global economic development. In Nigeria, small businesses account for 96 percent of companies, 84 percent of employment, and 48 percent of the national GDP.

There are 40 million small businesses in Nigeria, and only a few have access to formal financing. This is a significant issue because, without working capital, companies are unable to invest and grow.

Most small businesses are creditworthy; however, accessing credit is challenging because they do not have credit scores. Traditional lenders' collateral requirements are too high. For those businesses that get through the process, it can take up to three months to receive the funds.

To salvage the situation, Payhippo is driving financial inclusion for small businesses by creating accessibility to financing. A business can apply for a loan through the company's online platform by providing their business information.

The AI-driven lending platform creating credit access for small businesses in Nigeria has announced that it raised $3 million in seed funding.

Payhippo aims to improve its technology and enhance its lending offerings to address the persistent financing gap for small businesses in Nigeria with the funding.

Founded in August 2019 by Zach Bijesse, CEO, Chioma Okotcha, COO, and Uche Nnadi, CTO, Payhippo provides small businesses with access to credit in less than three hours; with instant financing, business owners can make investments needed for growth. Through their backend technology system, the firm uses KYC checks to verify the business's cash flow data, business owner data, and industry data - all within a few minutes. In a couple of hours, the company receives its loan.

Payhippo provides small businesses with short-term working capital with average loan amounts of $1300 and allows them to use the principal amount during the entire tenor, using the money to run their businesses entirely. Businesses then repay the whole loan at the end of the loan period. Small companies can then build their Payhippo score based on their track record - by repaying their loans on time, they become eligible for higher amounts of capital.

Since its inception, the startup has disbursed 5000 loans to small businesses across Nigeria. In September 2021, the company earned $64,000 in revenue from $900K disbursed, experiencing 25% monthly growth with a 97 percent repayment rate on loans.

Chioma Okotcha, Co-founder and COO, Payhippo, said: "The funding will allow us to invest in hiring more engineers and data scientists. We aim to improve our technology and enhance our lending offerings to address the persistent financing gap for small businesses in Nigeria. At Payhippo, our vision is to provide millions of small businesses with sufficient and available capital to run and grow their businesses."