Nigerian fintech startup Kwaba is helping low and middle income earners to split their annual rent into convenient monthly installments, a solution that is all the more pivotal given the economic impact of COVID-19.
Founded in 2019 but launched in January 2020, Kwaba makes rent payment less stressful, and also offers further services such as apartment search, quick funds at affordable rates, and further credit facilities for the purchase of properties.
First and foremost a digital rent financing platform, it helps renters split their bulk rent into convenient installments.
“Our aim is to help renters ease the financial burden associated with rent payment,” Obinna Molokwu, founder of Kwaba, told Disrupt Africa.
Molokwu’s reason for building the platform came out of a personal experience he had growing up.
“I saw my aunties and uncles always ask my dad for support with their rent. Fast forward 30 years later, some of these aunties and uncles and more recently my friends would still reach out to my dad, or me, for support with their rent,” he said.
“That got me thinking as to why even after 30 years, people still struggle with rent payment. We had to double down on what the problem was.”
A key problem, he found, was the non-flexible rent payment method that currently exists in Nigeria, where landlords request one or even two years worth of rent in advance before a prospective tenant can secure an apartment.
“This rent payment method is not representative of a renters’ economic reality,” Molokwu said.
Kwaba is working to change this, and help renters overcome this challenge. The startup has been well-received. Last year it took part in the LABS by ARM accelerator, banking US$20,000 in funding and additional growth support, before raising funding from Ingressive Capital, a US$10 million VC fund targeting early-stage startups across Sub-Saharan Africa, later in the year.
Molokwu said the startup is using the investment to expand its reach and give more people access to its solution, especially during trying times post-COVID-19. Estimates suggest that about 60 per cent of tenants will not be able to pay their house rents in Nigeria in the coming months due to the impact of the pandemic, a problem that Kwaba believes it has the solution to.
“We have monthly rent financing requests worth of over US$500,000,” said Molokwu.
“We are in the works of deploying some exciting features that will help renters get more value from their rent payments. We plan to expand into other African countries after this.”
The startup, which currently charges monthly fees for its rental financing service, has suffered negatively from COVID-19 in its own way, but Molokwu said it is coming out the other side.
“We are currently working to get the word out there so that renters will know that they no longer need to stress about financial-related issues with renting,” he said.