TLG provides US$3mn facility to ethical debt collection

  • TLG’s financing of BFREE aims to transform combative practices in microlending with a more just approach

  • BFREE plans to leverage innovative data and generative AI tools to extend financial literacy across Africa at scale

TLG Capital, a leading pan-African alternative asset manager, has forged a strategic partnership with BFREE, a pioneering ethical debt collection startup based in Nigeria. With a $3m facility, TLG will empower BFREE to spearhead a transformative shift in ethical loan collection services across the continent.

Over the years, microlenders have been criticized for aggressive loan enforcement policies which sometimes do more harm than good. TLG and BFREE have discovered that most defaulting borrowers want to pay but struggle financially. BFREE takes a human-centric approach, working collaboratively with borrowers to restructure their outstanding debts with more time to repay. TLG’s facility to BFREE aims to transform combative practices in microlending, such as incessant calling and debt-shaming, with a more just approach. TLG and BFREE’s partnership will preserve the financial well-being and dignity of millions of borrowers while educating them about credit and financial literacy. BFREE leverages innovative data and generative AI tools to extend financial literacy across the African continent at a scale that could not be accomplished by human loan officers, given the small loan sizes.

TLG Capital's strategic investment empowers BFREE to acquire non-performing loan books from commercial and microfinance banks in Africa while implementing ethical recovery practices through its advanced collection system. This relieves the financial pressure on both banks and their borrowers, fostering sustainable development.

Commenting on the deal, the CEO of BFREE, Julian Folsbach, said -
“BFREE is building a more inclusive financial system in Africa. The TLG team gets thismassive opportunity, and their creative approach to structuring and incredible network across Africa made them a critical partner for our business. They have been our first institutional debt investor and indispensable partner in shaping our strategy to transform debt collection practices on the African continent. We hope that this

investment from TLG will be the first of many as we expand our operations across Africa, providing relief to both borrowers and banks alike.”

Isaac Marshall of TLG’s team commented-
“Everyone investing in Africa knows the problem of scale in retail and SME lending, especially with regard to collections. BFREE has built a practical process to instill a sense of care and dignity into loan collections. We’re extremely excited to be a part of the transformation of the lending ecosystem that they’re going to bring about. They are a magical team, and TLG’s investment today is just the beginning.”

Beyond financial considerations, TLG Capital's investment in BFREE resonates deeply with key Sustainable Development Goals (SDGs), including SDG 1 (No Poverty), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 16 (Peace, Justice, and Strong Institutions). By championing ethical debt collection practices and promoting economic empowerment, this collaboration contributes significantly to sustainable income growth and the advancement of economic development in Africa.