Oluseye Seton is the co-founder and chief growth officer at Vendorcredit—a supply chain fintech and fulfillment partner on a mission to deliver holistic, seamless, embedded, and scalable supply chain solutions to the dynamic companies and digital ecosystems that have the potential to transform Africa. In this interview, the seasoned banking professional with over 16 years of experience and a background in software engineering and database development says SMEs face significant barriers to accessing credit, as traditional financial institutions often deem them too risky. In fact, 9 out of 10 credit applications are declined, primarily due to insufficient collateral and a lack of necessary documentation. Daniel Obi brings the excerpts.
Kindly tell us more about Vendorcredit and its operations in Africa.
Vendorcredit simplifies credit access for African businesses through its digital platform. We are passionate about delivering holistic, seamless, embedded, and scalable supply chain solutions to the dynamic companies and digital ecosystems that have the potential to transform Africa. Every day in Africa, small businesses miss critical growth opportunities due to slow and cumbersome credit approval processes. Since our incorporation in 2020, we have been addressing this challenge by positioning ourselves as a multi-lender platform and marketplace.
“These models enable Vendorcredit to cut credit processing and disbursement times by over 80 percent, making access to finance faster and more efficient.”
At Vendorcredit, we are building Africa’s next-gen financial infrastructure, empowering SMEs with the capital they need to scale and thrive in a challenging economic environment.
What unique financial products or services does Vendorcredit offer to support the growth and sustainability of SMEs?
What separates VendorCredit from other financial service providers is its embedded finance approach to the delivery of vanilla financial products, such as WC, LPO, and IDF finances. This approach enables VC to cut credit processing and disbursement times by over 80 percent.
Vendorcredit connects SMEs that need funding with third-party financiers—banks, institutional lenders, and private investors. Vendorcredit’s smart algorithm simplifies the entire financing process with a four-step approach: sourcing credit opportunities, analysing and scoring applications, matching them with the right lenders, and facilitating seamless payments.
Our unique delivery model sets us apart from other financial service providers. We offer two key approaches: Embedded Finance—where we integrate vanilla financial products such as Working Capital, Local Purchase Order (LPO) Financing, and Invoice Discounting directly into business operations, ensuring seamless access to credit. And a Marketplace Approach—E-Tenders—which offers a dual benefit: corporates gain access to a pool of about 1000 verified vendors, while vendors receive transaction opportunities and increased visibility to corporate buyers.
These models enable Vendorcredit to cut credit processing and disbursement times by over 80 percent, making access to finance faster and more efficient.
Read also: Empowering SMEs in the Digital Era: Key Insights from the Business Day SME Clinic
What challenges do SMEs commonly face when seeking financing, and how does Vendorcredit help address those challenges?
SMEs face significant barriers to accessing credit, as traditional financial institutions often deem them too risky. In fact, 9 out of 10 credit applications are declined, primarily due to insufficient collateral and a lack of necessary documentation. As a result, these institutions impose strict lending requirements, making credit access even more challenging for SMEs.
To mitigate this, we have developed a seamless credit process that curtails the risks associated with SME lending. Our approach gathers both financial and non-financial data to provide a clearer picture of an SME’s creditworthiness. By translating this data into a comprehensive credit score, we make SMEs more attractive to lenders and investors. This process enables faster, data-driven lending decisions, with a turnaround time of just 48 hours.
Would you consider high interest rates from credit firms and banks as the single reason why over 70 percent of businesses self-fund or borrow from friends and family members to fund their businesses?
I wouldn’t put it that way. Every business starts by raising familiar capital—funds from family and friends. However, the real challenge arises when transitioning from informal funding to structured capital, where many businesses encounter bottlenecks.
As a business gains traction and builds a financial track record, it should ideally graduate to obtaining credit from traditional financial institutions for stability and growth. However, this transition is often hindered by complex credit documentation, lengthy approval processes, strict terms, and high rejection rates.
Our goal is to break this bottleneck using technology, making it easier for businesses to access structured financing. While alternative lenders charge higher interest rates than traditional financial institutions, many SMEs find that when they weigh the opportunity cost, the benefits of growth outweigh the cost of capital.
For Vendorcredit, what is your limit of lending, and what is the rate of loan payback?
Vendorcredit operates as a digital credit marketplace, connecting borrowers with lenders. Lending limits and pricing are determined by the borrower’s funding needs and the lender’s risk appetite. We have successfully executed single-ticket transactions of up to ₦600M.
Over the past five years, we have maintained a loan collection rate of over 97 percent, keeping defaults below 3 percent. Interest rates have gone as low as 3.5 percent per month, though these are subject to risk assessments and fluctuations in the money market.
How does your firm assess the creditworthiness of SMEs, especially those with limited financial histories?
We have developed a proprietary algorithm that, with the consent of the borrower, accesses and analyses data drawn from a variety of sources, summarising the same into a credit score for the borrower. The data utilised is a combination of financial and non-financial data, each carrying a different weight in determining the final credit score.
What role does technology play in streamlining your loan application and approval process for SMEs?
One of our core values is being ‘tech-forward.’. Technology is at the heart of everything we do. It gives us a competitive edge because it enables us to reduce processing times by 80 percent, providing customers with real-time visibility to the corporations. Technology enables us to aggregate demand, analyse, and score credit requests efficiently.
How does your firm balance risk management while ensuring access to affordable financing for SMEs?
Risk in this space is perceived as high, and with that comes the expectation of equally high rewards. The key question, however, is how to ensure that these high returns remain affordable for SMEs that often struggle with high-interest rates.
The reality is that what many perceive as high risk isn’t necessarily so. We have taken an innovative approach to risk assessment, allowing us to accurately capture the true risk profile of SMEs. By effectively communicating these insights to investors and lenders, we have aligned their perspectives with ours—making credit more accessible and affordable for SMEs.
What advice would you give to SMEs looking to secure funding and build long-term financial stability?
There are four key factors we consider when offering our financial solutions to SMEs: One: Access to Financial and Non-Financial Data—SMEs must ensure their transactions are recorded electronically. This transparency makes it easier for us to assess their business and provide the necessary financing. Two: Building Expertise—Many SMEs spread themselves too thin by trying to do too many things at once. Instead, focusing on one or two core areas where they have a competitive advantage allows them to build expertise, making them more attractive for funding. Thirdly, SMEs must also invest in themselves. The reality is no one wants to fund a business whose owner hasn’t made a commitment to it first. When we see that you’ve taken a risk on yourself, it gives us the confidence to take a risk on you. And finally, Embracing Credit for Growth—In Nigeria, there is a widespread hesitation to take credit from traditional institutions. As a result, many SMEs limit their growth by relying only on personal funds or capital from friends and family. To scale effectively, businesses must explore structured and institutional funding to unlock their full potential.
What is the future of credit financing for SMEs in Nigeria, especially in the face of a harsh economy, mistrust, and poor infrastructure?
The future of SME credit financing in Nigeria hinges on three key pillars: data, innovation, and collaboration. Digitising financial and non-financial data will be crucial for streamlining assessments and risk analysis, leading to smarter lending decisions. Innovation will play a vital role in creating tailored financing solutions that address SMEs’ unique needs while ensuring accessibility at their respective technological levels. Finally, collaboration is essential to unify fragmented data across industries—telecommunications, FMCG, financial institutions, and retail—allowing for a more accurate evaluation of SME creditworthiness and a more inclusive financial ecosystem. For this to happen, traditional institutions, fintechs, and the government must work together to unify data, modernise lending practices, and create an ecosystem that fosters SME growth. With government support and regulatory backing, we can drive the transformation needed to make SME financing more accessible and efficient.
How much loan have you given out since 2020, and where do you see Vendorcredit in the next five years?
Since inception, Vendorcredit has facilitated loans in the tens of millions of dollars in the last 12 months, across thousands of SME credit requests, spanning various sectors. Over the next five years, we aim to significantly scale credit disbursement, deepen our impact across key industries, and expand beyond Nigeria into other African markets facing similar SME credit challenges. To achieve this, we are investing in AI-driven credit scoring, alternative data analysis, and machine learning to enhance lending efficiency, improve risk assessment, and increase financial inclusion.
Additionally, we are strengthening partnerships with banks, fintechs, e-commerce platforms, and corporate suppliers to create a seamless credit ecosystem within SME operations.
At Vendorcredit, we are not just providing credit—we are building the financial infrastructure that empowers SMEs to grow and thrive. The next five years will be about scale, innovation, and impact.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
