Lendsqr, a Nigerian lending software startup, is revolutionizing the lending industry with the development of an AI model that evaluates borrowers’ voices and facial expressions to determine their loan eligibility. The model boasts an impressive 76% accuracy rate and aims to assist Nigerians who lack traditional financial documentation in accessing small loans ranging from ₦30,000 ($18) to ₦50,000 ($31) from lenders.
Traditionally, lenders rely on the five Cs—character, capacity, capital, collateral, and conditions—to assess a borrower’s creditworthiness before granting a loan. However, Lendsqr’s innovative AI model seeks to streamline this process by evaluating a borrower’s ability and willingness to repay a loan based on their interactions with the system. Adedeji Olowe, the CEO of Lendsqr, explained in an interview with TechCabal that the idea behind the AI project is to help vulnerable individuals demonstrate their capacity and character through their words, rather than traditional documents.
The model operates by allowing borrowers to interact directly with the AI system, answering questions about their employment and repayment plans through video or voice responses. By analyzing this input, Lendsqr’s model can predict whether a borrower is likely to repay or default on their loan. The company is currently testing the model using its own funds and plans to release its research findings by the end of Q3 2025. Additionally, Lendsqr intends to make the data available to competitors for use in their own loan systems.
While Lendsqr’s primary focus is on expanding credit access for Nigeria’s mass market, the company also plans to pilot the model in Canada to assist immigrants and new students who often struggle to secure credit due to a lack of local credit history. Olowe emphasized that the credit access issue is significant not only in Nigeria but also in other African countries like Kenya, Ghana, Ivory Coast, Malawi, and South Africa.
If successful, Lendsqr’s AI model could have a transformative impact on the Nigerian economy. With only 6% of Nigerian adults currently having access to formal credit and a limited number of small businesses able to access it, the model could significantly increase credit availability for those in need. Fintech companies like Kredi, Snapcash, and Blockacash, which are current clients of Lendsqr, stand to benefit from reduced lending costs and a broader customer base with the implementation of the new model.
Partially funded by the Nigerian government through the Ministry of Communications, Innovation & Digital Economy and Google, the AI model is set to be launched once it reaches 90% accuracy. Olowe envisions that while the model may not replace traditional lending for mortgages or car loans, it has the potential to provide access to foundational credit that can be life-changing for many individuals. By improving screening processes and increasing repayment rates, lenders can enhance their profitability and sustainability, ultimately making credit more accessible and impactful for Nigerians in need.
