Carrot Credit, a Nigerian fintech startup, has recently secured $4.2 million in seed funding to expand its innovative alternative credit service. This service allows users to access loans by using their digital investments as collateral. The funding round was led by US-based MaC Venture Capital, with participation from Authentic Ventures.
Founded in 2023 by Boluwatife Aiki-Raji, Carrot Credit is revolutionizing Africa’s lending landscape by offering individuals the opportunity to borrow money without having to sell off their investment portfolios. Instead of traditional credit scores, the platform connects to users’ investment accounts, which can include stocks, ETFs, and government bonds. By assessing these holdings, Carrot Credit is able to provide credit lines to users.
Users have the option to access up to 40% of their stock portfolio’s value or up to 70% of their fixed-income assets. Carrot Credit secures a lien on these assets through API integrations, allowing users to retain ownership while leveraging their value. The platform offers flexible repayment terms, including fixed durations of 3, 6, or 12 months, as well as adjustable monthly payments. With competitively low interest rates, Carrot Credit has a strategic advantage over many digital lenders in Nigeria.
CEO and co-founder, Boluwatife Aiki-Raji, explains the initial idea behind Carrot Credit, stating, “People were investing in all types of things—stocks, crypto, fixed income—but many didn’t recognize those investments as worth anything. That was the initial idea: why can’t this be collateral?”
Carrot Credit operates with an embedded B2B2C model, integrating its lending service into various fintech platforms, brokerages, and digital wealth managers across Africa. This approach aims to broaden access to credit and seamlessly embed Carrot Credit’s services into the financial routines of digitally savvy users.
Since its inception, Carrot Credit has disbursed over $2 million in loans to more than 10,000 users, showcasing early success for its innovative approach. Revenue is generated through interest payments, which are kept below market averages.
Marlon Nichols, co-founder and managing partner at MaC Venture Capital, expresses confidence in Carrot Credit’s potential, stating, “What excites me about this investment is how Carrot is leveraging digital assets to create a seamless, low-barrier credit solution in markets where credit has traditionally been out of reach.”
As Carrot Credit expands its reach across Africa, the company aims to make borrowing more inclusive and responsive to the digital investment habits of a new generation of African consumers. With a focus on innovation and accessibility, Carrot Credit is poised to make a significant impact in the African fintech space.
