advertisement

Lendme in landmark $1.8M deal

advertisement

A while ago we wrote about Lendme.co.zw and now they have announced an exciting deal worth US$1.8 million. This was revealed by Lendme’s founder Michael Charangwa, who explained that Lendme (UK) have signed the $1.8 million deal with Buildvest (Pvt) Ltd a Zimbabwean registered micro-lender. The development means that Lendme will now have added capacity to push through its two standard bearer products LendmeAirtime and LendmeMula.

advertisement

The deal means that the Lendme Service in Zimbabwe will now be operated by Buildvest under license from Lendme (UK). Through this transaction Lendme Zimbabwe acquires additional capacity to offer their service to a larger base of customers. Buildvest is run by Brendon Quinn and Kevin Wild whose experience in financial services encompasses stints in South Africa, Australia and Zimbabwe.

Wild says the deal makes sense for them because, “we believe the general population in Zimbabwe has a mobile phone and as you know finances pretty tight in Zim, so we want to provide as many people as possible with credit facilities.” Kevin pointed out that Zimbabwean banks are not actively providing credit and the demand in the market is not being adequately catered for. In this regard Lendme Zimbabwe will be ideally positioned to service this demand.

advertisement

The two parties bring a complimentary skill set to the table with Buildvest strengths as a financial services company and Lendme’s expertise as a technology company. Although Charangwa declined on the nature of Lendme Zimbabwe’s shareholding and profit share, the magnitude of the transaction is a clear endorsement of the Lendme’s business model.

With the consummation of the deal Buildvest acquire the Country Operator License of the Lendme brand which also translates to them handling all administration, marketing and general operations of the service within Zimbabwe. Up until now Lendme’s marketing has mainly been by word of mouth but Wild indicated that they will step it up a bit through social media and some press ads.

At the moment Lendme has 8,500 registered users for LendmeAirtime and this is envisaged to grow to 300,000 within next 6mths. LendmeMula is projected to increase to have around 15,000 users borrowing between $50-$250 within the next 3mths. As of the day of the announcement (14 June 2012) Lendme has activated 7,000 LendmeAirtime accounts and have started receiving applications for LendmeMula.

Lendme is leveraging the power of the Internet and algorithm’s which create a credit rating or a Trust Rating as the company calls it for each user. Charangwa explained that the companies processes are geared to scale up and handle to anticipated surge in users, “the system is build to handle way more than we envisage. 99% of all the processes within the system are computed by complex algorithms that make decisions on Approvals, Credit Limits (and) even communication.” Depending on the markets response Lendme might employ additional people to respond to email and provide customer support.

Although Telecel has launched a similar product to LendmeAirtime, Charangwa points out that they are not really a competitor as, “they only offer up to $1, which is a few minutes talk time. This does very little to address the need for a substantial buffer which consumers need, when their airtime runs out.” The MNO’s are seen as partners rather than competitors. With the LendmeMula product there is some competition from Banks and other micro-lending institutions but both parties are confident they have a superior product and service.

This is demonstrated by the fact that Lendme’s our system is accessible online and on mobile and withina month they intend to launch a USSD feature. Convenience is credit that is available on a 24/7 basis. As Charangwa puts it, “if you already have an approved account you can borrow $100 at 12PM in the evening and have it in you Ecocash account within a minute.”

The success of Lendme’s Zimbabwe operation has inspired Charangwa to explore opportunities in other African countries namely Nigeria and South Africa.


Quick NetOne, Telecel, Africom, And Econet Airtime Recharge

If anything goes wrong, click here to enter your query.


WhatsApp Discussions

Click to join a Techzim WhatsApp group:
https://chat.whatsapp.com/KUBCXUZQEsQBGzP2d2EiCr

If you find the group full, please notify us on +263 715 071 199 and we'll update the link.


7 thoughts on “Lendme in landmark $1.8M deal

  1. From their website …

    Simple Repayment!

    We have made it just as simple to repay your loan by combining the
    timeless simplicity of cash with the benefits of mobile and web to
    create a secure, simple, and convenient payment solutions. Your can
    choose to repay your loan through 1.Etranzact PayOutlet available from over 50 participating outlets (Find Outlet) across Zimbabwe, or 2. Ecocash Mobile Wallet.

    Representative example:

    US$100 Loan Repayable over 30 Days – Interest Rate is 20% per month – Total Amount Payable is US$120.

    They should not have come to market with incomplete information. Their
    (find outlet) link leads right to the top of the same page.

    Anyway, from day one i have noticed few “irregular” things about this
    service. The first instance was just making loans even of airtime
    without Ministry of Finance approval. I
    ignored it and thought maybe i
    am the one who is wrong so i never bothered to say anything.

    Now, they are charging interest rates of 20% per month. I doubt those rates were approved by the RBZ or even the Ministry of Finance.

    Financial services are regulated in this country, even bank charges.

    And in this country there is something called the in duplum rule which basically means interest payments stop when the unpaid interest equals the outstanding capital. In short I can willingly default, and so will my friends. I have lawyer friends you see.

    And as everybody knows, a few years ago many clever people borrowed trillions from banks at billion percent interest rates and bought houses and simply paid 100% and when lenders came for more they simply took the lender to court for asking additional interest payments above 100% of capital because it is illegal. Even the current minister of finance took his creditors to court for the same reason.

    I have no intention to use this service. So there is no need for them to mark my name.
    I am just saying this as a fact. I also had the option to keep quiet, not say anything and tell all my friends and their friends without saying anything here.

    1. Lucky for them reading again i discovered one has 30 days to pay at 20% interest per month.

Comments are closed.