How Kwaba is solving Nigeria's rent complexities

Tilda Mwai . 3 years ago

How Kwaba is solving Nigeria’s rent complexities

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Article Summary: One of the major challenges facing tenants in Nigeria is subsequent rent payments after the first year payment. This is according to Obinna Molokwu, CEO of Kwaba, during our last Ask-Me-Anything session where he talked about the rental problem he is solving in Nigeria.   This led to the advent of Kwaba, a lifestyle brand…


One of the major challenges facing tenants in Nigeria is subsequent rent payments after the first year payment. This is according to Obinna Molokwu, CEO of Kwaba, during our last Ask-Me-Anything session where he talked about the rental problem he is solving in Nigeria.

 

This led to the advent of Kwaba, a lifestyle brand that helps people pay for everyday transactions, manage their rental payments, and also build credit scoring models for users based on their interactions on the platform. This relieves the Landlord of default and at the same time solves the tenant’s problem of low finances.

 

Obinna noted that while having quality tenants with low delinquency rates is very important, most individuals seeking for rental finance are not credit worthy. He discovered that this problem was common in Nigeria so he decided to finance people’s rent, while giving them a flexible means to pay back as the solution to this problem. What started as a website with the tagline rent-now, pay later, quickly gathered over 5,000 sign-ups in the first month. This validated the opportunity for Kwaba, and gave them confidence to keep building the product.

 

Over time, Kwaba has had to iterate its product offering to deal with various barriers in the market. For example, with the major challenge in proving credit worthiness of individuals, Kwaba has built a product that focuses on an individual’s character to provide credit.

 

Another challenge is that individuals that want to rent are usually over leveraged. This means that they take multiple loans from different sources in order to pay their rent, and are not able to pay back at the end of the day. However, one of the products the company provides is an avenue to save towards rental payment as well as providing a credit line for savers. This helps the users to meet their rent target and also helps the app understand character traits better.

 

While disclosing Kwaba’s future plans, Obinna concluded by noting that there is the possibility of expanding the company to include home ownership with a service offering beyond Nigeria in the mid to long term.

 

We love your feedback! Let us know what you think about financing rental payments in Nigeria, and other means by sending a mail to [email protected].