TLG Capital, a leader in alternative asset management, and BFREE, specializing in ethical credit management, have joined forces in a $3 million deal aimed at reshaping the microlending landscape in Africa. The collaboration seeks to prioritize borrower well-being and financial literacy, leveraging innovative data and AI tools to extend impact across the continent.
Microlenders have faced criticism for aggressive loan enforcement policies that often exacerbate financial difficulties for borrowers. BFREE adopts a human-centric approach, working collaboratively with defaulting borrowers to restructure debts and provide extended repayment timelines. The partnership with TLG Capital aims to transform microlending practices, replacing combative methods like incessant calling and debt-shaming with a more just approach.
The strategic investment enables BFREE to acquire non-performing loan books from commercial and microfinance banks while implementing ethical recovery practices through its advanced collection system. This initiative alleviates financial pressures on both banks and borrowers, contributing to sustainable development goals such as poverty reduction and industry innovation.
A Closer Look at BFREE
Founded in August 2020 by Chukwudi Enyi (COO), Moses Nmor (CPO), and Flosbach (CEO), BFREE emerged from firsthand experiences working with digital lenders in Nigeria. Recognizing deficiencies in post-loan services, the founders aimed to develop ethical and tech-inspired debt-collection tools and methods.
Flosbach stated, “We saw a gap in lenders’ value proposition — they excel at providing loans but lack efficient and user-friendly collections processes.”
BFREE prioritizes ethical debt collection standards, collaborating closely with defaulters to develop tailored settlement options. Ethical practices include protecting customers’ personal information, offering flexible repayment choices, and avoiding excessive penalties like late fees and debt-shaming.
Currently, BFREE collaborates with 30 lenders, including digital lenders, microfinance institutions, and banks. The startup creates defaulter user profiles using lender-provided data and analyzes behavior via algorithms to offer personalized collection approaches. Customers can access self-service payment options or automated communication channels based on their risk profiles.
BFREE has assembled a team of industry specialists, including CTO Konrad Pawlus and Yohan Theatre, to drive its expansion. Theatre, with expertise in data decision-making and financial engineering, aims to disrupt traditional finance by integrating blockchain technology into secondary debt markets.
“The arrival of DeFi is a game-changer,” Theatre noted. “Transaction costs can be slashed, and contractual certainty increased through smart contracts, providing risk-sharing instruments to lenders and borrowers.”
As BFREE expands its reach and refines its ethical debt collection practices, the partnership with TLG Capital signifies a step toward fostering economic empowerment and sustainable development in Africa’s financial ecosystem.
