In a completely new strategy towards debt recovery, German-Nigerian financial technology (fintech) firm, BFREE, plans to put down $40 million to acquire some distressed loan portfolios in Union Bank of Nigeria.
A statement from the Nigerian lender said both parties signed a Memorandum of Understanding (MOU) in Berlin on November 21, 2023, at the German-Nigerian Business Forum.
It was disclosed that BFREE would partner with its international financing partners to refinance bad loans from Union Bank, particularly those delayed in repayment or already written off.
Union Bank expressed its optimism that this strategic partnership with BFREE would not only bolster the bank’s financial health but also contribute significantly to the broader economic recovery of Nigeria.
The financial institution, a leading provider of loans to Retail customers and Small and Medium Enterprises (SMEs) in Nigeria, has proactively adapted to the challenging economic environment.
The ongoing economic pressures have necessitated increased flexibility for loan repayment plans, and BFREE, leveraging artificial intelligence (AI), presents an innovative solution.
Its AI-driven automated interaction with loan customers facilitates discussions and agreements on revised loan terms. This streamlined approach enables the rapid review of many loan agreements within short periods, resulting in higher repayment rates and reduced instances of loan write-offs for Union Bank.
Speaking about the partnership, Mr Joe Mbulu, Executive Director of Union Bank, said, “We are excited about the strategic partnership with BFREE as it aligns with Union Bank’s commitment to innovation and adaptability.
“This collaboration signifies our dedication to finding innovative solutions to the economic challenges faced by our customers.
