How Nigeria’s Vittas is Using Machine Learning to Smooth Loans Issuance Processes

Nigerian fintech startup Vittas is a digital lender that utilises machine learning and partnerships in order to provide loans. 

Founded in July 2019 by Sulav Singh and Collins Uche, with its first loan going out in January 2020, Vittas built an inventory financing solution for Nigerian healthcare providers that allows them to purchase medications and medical equipment.

It is also providing accounting and inventory software and POS terminals through two partners to our customers to increase its revenue while also getting access to this data to improve its risk assessment.

“Vittas operates through a partnership model. If a customer is approved for a loan, the funds are sent to our distribution partners, who have signed exclusive contracts with us. This ensures the funds are going to what Vittas has classified as revenue generators, like medication and medical equipment, not other operational expenses. The partnership significantly reduces our risk,” Singh told Disrupt Africa.

The initial gap spotted by the company was that only nine per cent of healthcare facilities have any financing support, with a lack of affordable financing being the issue.

“The reason is Nigeria is a credit data scarce environment. So, if you are not very narrow in your focus, you won’t have the expertise to properly assess risk. Thus, the rates offered will be very high and the duration and amount will be very short and small,” Singh said.

Vittas, however, only gives loans to healthcare facilities to purchase medication or medical equipment, ensuring a narrow focus. The startup has funded its loan book through private debt, and also recently began to activate institutional debt as its loan book has increased.

“We have a lot of demand. We have very low defaults and NPLs and have proven a record of success. Because of this we are now working with a lot of local debt providers to increase our loan book and meet the large demand we see,” said Singh.

“We have rolled out our white-labelled SaaS solutions to five pilot customers in April. The pilot will run for six months and then we plan to scale this across all of healthcare. This will improve our customers business operations while allowing them to activate loans faster, for longer durations and better rates.”

He said the goal for Vittas was to create an ecosystem of SaaS products that help its customers and increase their ability to succeed, while helping Vittas generate and diversify revenue and critically improving its risk assessment accuracy.

The startup, which in the last couple of years has taken part in both Google for Startups and Techstars accelerator programmes, monetises via four distinct revenue lines – interest on loans for medication, interest on land for medical equipment, subscription on accounting and inventory software, and a transaction fee on PoS terminals.

Currently operating only in Lagos, it will expand across Nigeria this year, with further ambitions to expand to the rest of West Africa, Kenya, and South America

“Initially getting debt to prove out the concept was a challenge. As we grew the loan book and proved the concept we were able to access larger and institutional debt,” Singh said.

“Adoption from customers initially was difficult. Small and medium healthcare facilities are suspicious of healthcare facilities due to predatory practices. Now that we are a trusted brand, we have a pipeline of customers on our waitlist to access our products.”

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