Adedeji Olowe

Let me get straight to it: AI is poised to upend the lending industry as we know it. And not in some distant, sci-fi future. It’s happening right now.

This is 2025. Unless you’ve been living off-grid without internet access, you’ve probably noticed that AI is now dangerously proficient. Scarily so. What was once a novelty for tech enthusiasts is now a deeply integrated part of everyday tools, and it’s getting disturbingly good at deception. If you’re a lender and you’re not losing sleep over this, you’re either uninformed or in denial.

Let’s rewind a bit. Remember when students actually wrote their essays? Just two years ago, ChatGPT made its grand entrance, and the world hasn’t been the same since. Today’s students may never understand the struggle of writing an essay from scratch, battling typos, or agonizing over tone. Back then, tone was a personal touch. Now, it’s just another setting in your AI tool. But this is merely the beginning. If AI only corrected grammar and composed love letters, we’d be fine. But no, it had to evolve further.

We’re now in a world where a tool like ChatGPT can write job applications, fabricate employment histories, and convincingly generate bank statements. The AI that helps you polish your emails is now helping fraudsters polish their lies. Although the productivity upside is huge. But for lenders, this same technology is turning into a nightmare.

Remember when a forged document looked like it was forged?

It used to be that you could easily spot a fake document. The font would be wrong, the formatting sloppy, the grammar laughable. You’d look at a suspicious payslip and instantly know something was off. Not anymore. These days, AI-generated documents are not only accurate but also hyper-realistic. They come with just enough variation to mimic a real-world scenario; misspellings in the right places, timestamps that match bank operating hours, salary numbers that align with market benchmarks. These aren’t the cheap forgeries of the past. These are professional-grade fakes that could fool a trained compliance officer, and they’re getting better by the month.

The scary part is how easy this has become. A quick prompt to an AI model and you have a fully fabricated three-month bank statement with perfect arithmetic, realistic merchant names, and plausible spending habits. Want to fake an offer letter? Just describe the company, job title, and salary range. Need a utility bill? That can be generated too. It’s not just that the fakes are good. It’s that they’re effortless. And when forgery becomes this easy, the default assumption in lending, that what a borrower submits is real, gets flipped on its head.

Lending is built on trust. AI is wiping that out.

The foundation of lending has always been trust backed by documentation. Whether you’re giving out a small personal loan or a multimillion-dollar mortgage, you’re relying on some form of evidence that the borrower can pay you back. This is where the famous “5 Cs of credit” come in: character, capacity, capital, collateral, and conditions. Some add two more Cs, like credit history and cash flow, but the principle is the same. You’re looking for proof that the borrower is both willing and able to repay.

All these Cs rely on some form of documentation. You want to verify income? Ask for a payslip. You want to assess cash flow? Ask for a bank statement. You want to confirm employment? Ask for an offer letter. The problem is that AI can now generate all of these with such convincing detail that lenders no longer know what’s real and what’s fiction. We’re entering a world where evidence can no longer be trusted at face value. And once that happens, the entire framework of credit decisioning starts to wobble.

I’ve seen the fakes, and they’re getting smarter

In the last year alone, through my interactions with Lendsqr lenders and the credit ecosystem in general, I’ve observed a noticeable spike in suspicious documentation submitted by borrowers, especially in markets where traditional credit bureaus are weak and lenders rely heavily on self-reported data. Many of these documents, bank statements, payslips, and offer letters arrive with formatting and language that appear flawless on the surface. But when verified against actual data sources, like payroll systems, the discrepancies become clear.

While I can’t say for sure AI was used in all of these forgeries, the quality and speed at which they’re produced point strongly in that direction. It’s no longer uncommon to see identical documents submitted across unrelated loan applications or to find income claims that don’t align with transactional patterns. These trends suggest borrowers are increasingly relying on tools that automate and enhance the forgery process, making manual review almost pointless.

And that’s not even the worst part. We’re now seeing attempts to spoof video verifications, with deepfakes and synthetic selfies passing rudimentary liveness checks. These aren’t people wearing masks or hiding in shadows. These are full-on facial overlays using open-source tools that can mimic blinking, head movements, and even speech. 

And no, your “move-your-head-left-and-smile” liveness prompt isn’t saving you. These deepfakes are trained to mimic those exact cues. In fact, researchers from Sensity AI flagged over 1,000 deepfake identity attacks between 2022 and 2024, targeting financial services and crypto platforms specifically.

In other words, a fraudster can show up to your KYC process looking like a totally different person, and you won’t know unless you have military-grade detection tools.

And I wish I could say this is a niche problem, but it’s not. From Lagos to Copenhangen, from Sao Paulo to Kuala Lumpur, we’re seeing a pattern. AI isn’t just making fraud easier. It’s making it scalable.

The traditional defenses are no longer enough

It’s tempting to believe that better fraud teams or more document reviewers will solve the problem. But that’s like bringing a water pistol to a forest fire. This isn’t about human error anymore. It’s about systemic failure. The old model of “submit your documents and we’ll review them” is collapsing. In the face of AI-powered forgery, trusting user-submitted documents is becoming a liability.

This means the only way forward is to remove the borrower from the equation, at least when it comes to submitting proof. Allow me to elaborate. Consider bank statements. Instead of requesting a borrower to send a downloaded PDF (which AI can forge), it’s preferable to connect directly to their bank. If the bank confirms a monthly income of $3,000, that’s credible information. Banks have no incentive to lie.

Payslips? Let’s dig deeper. Soon, lenders will only accept payroll information that comes directly from either the employer, an HR SaaS platform, or the government. If you received payment, let’s examine your tax records or pension contributions.

This is already happening through open banking frameworks in countries like Australia, Brazil, and the UK. The lender accesses real-time financial data through regulated APIs, removing the guesswork and eliminating the potential for fraud. In this new world, if I can’t trace it to the source, I won’t believe it.

No more PDFs. Only verified data.

This is the new normal. If your underwriting system still relies on PDF uploads, you’re building on sand. In this new world, we only trust what can be verified at source. Open banking is the clearest path forward, but it’s not the only one. Employers can be looped in through payroll APIs. Government databases can verify identity, address history, and tax records. Telecoms can provide behavioral credit scoring. In short, we are moving from a document-based system to a data-based system. And in a data-based system, forgery becomes nearly impossible, because the data is verified in real time and signed digitally.

It won’t be perfect. Fraudsters will try to spoof integrations, intercept API calls, or manipulate phone numbers. But these are harder to scale, and much easier to detect, than a well-crafted PDF forgery. With the right audit trails and cryptographic verification, we can catch these attempts before they do damage.

The war on AI fraud will be fought at the hardware level

And what about video verification? If AI can fake faces, are we doomed? Not necessarily. The next frontier of trust will happen at the hardware level. Just like Apple uses its Secure Enclave to store biometrics, we’ll soon need secure chips that can vouch for the authenticity of camera input. In other words, the device itself will sign off on whether a selfie or video came from a real user in real time, without being tampered with.

This is already being explored in the mobile security space. Trusted Execution Environments (TEEs) and Secure Elements can confirm that the image you’re seeing is unaltered, captured from a real device, and not replayed or synthesized. It’s not cheap tech, and it won’t roll out overnight, but it’s inevitable. And frankly, it’s the only way to stop the flood of synthetic identities before it becomes a full-blown crisis.

If you’re still using 2021 tools in 2025, you’re already cooked

Let’s be honest. The tools most lenders are using today were built for a pre-AI world. They were never designed to detect generative forgeries or deepfakes. If your fraud detection system hasn’t been updated since the pandemic, you’re already obsolete. This is not the time to be complacent or nostalgic about how things used to work.

At Lendsqr, we’ve been investing aggressively in fraud detection, real-time data verification, and AI counter measures. Not because it’s trendy, but because we don’t have a choice. We work with lenders across geographies where fraud levels are not just high, they’re innovative. The fraudsters are evolving faster than most regulators, and definitely faster than most banks. We can’t afford to wait.

AI won’t kill lending. But it will kill lazy lenders.

AI isn’t evil. It’s just powerful. And like any powerful tool, it can be used for good or bad. The responsibility lies with us: the builders, the lenders, the operators. If we sit back and wait for someone else to solve this, we’ll be wiped out. Not just in reputation, but in losses, defaults, and regulatory blowback.

But if we act now, build the right verification infrastructure, and stay a step ahead, we can not only survive, we can thrive. Lending will always be a business of trust. The difference now is that trust must be verified, not assumed.

I’ve staked my career, my company, and my sanity on helping lenders succeed. I’m not going to let generative AI wipe out the progress we’ve made. Not on my watch. Because I still believe in the power of credit to change lives. But I also believe in meeting challenges head-on, not pretending they don’t exist.

Let’s fight smart, build resilient systems, and ensure that the future of credit is still human, just a bit more skeptical, and a lot more secure.

If credit is ever going to be truly transformational, someone has to build the infrastructure that makes lending safe for lenders, efficient, and scalable. Someone has to create a foundation that lenders, big or small, can rely on. And after years of watching the gaps in the system, I decided that someone had to be me.

But let’s be honest, building a loan management system isn’t exactly the sexiest thing in fintech. Payments? Sure. Digital banking? Of course. But lending infrastructure? That’s the unglamorous, behind-the-scenes work that no one really wants to do. 

And this isn’t an African or Asian problem. It’s a global problem for every lender from Argentina, all the way to Canada. From New Zealand, all the way up to Japan. The cost and the complexity of tech needed by aspiring lenders is just unattainable for most.

And yet, without it, there’s no credit system. No way to support small businesses. No true financial inclusion.

When I started Lendsqr in 2018, it was just a side project. You know how it goes, tinkering with an idea, running small tests, and pushing it forward when time allows. The first iterations with good friends, Chioma Ukariaku and Ridwan Olalere (founder and CEO of LemFi) didn’t go anywhere. 

But at some point, I hit a crossroads. I had to decide whether to keep doing this halfway or go all in. That decision wasn’t easy, but it became clear after a conversation with my bosses at the time, Aigboje Aig-Imoukhuede and the late Herbert Wigwe. They gave me their full blessings to chase this vision.

And so, I jumped in. Headfirst. With no safety net and no parachute. Just an irrational belief that this had to be done and that we were the ones to do it.

The moment I knew Lendsqr had to be the best in the world

Growth wasn’t immediate. Numbers didn’t skyrocket overnight. Some days, it felt like we were grinding endlessly with little to show. But one day, it hit me. If I was going to build something worthwhile, why stop at “good enough”? Why not aim for the absolute best?

That realization was both exciting and daunting. No African company had ever built a world-class loan management system before. Sure, we’ve seen incredible companies like Paystack making strides with Stripe globally, but a lending infrastructure company fully founded in Africa, serving African lenders first and then scaling worldwide? That felt like an impossible mission. And yet, that’s exactly why I wanted to do it.

So, how have we done so far? Well, we’ve made significant progress with over 6,000 lenders serving 2.4m customers. We’ve benchmarked ourselves against other competitors on the continent. We’re doing quite good

Yet, when you compare us to global giants like Finastra, HES Fintech, DigiFi, and Turnkey Lender, we’re not there. Not yet. But that’s fine because the goal isn’t to catch up. It’s to surpass them.

The plan: How we’ll beat the global leaders

Lendsqr is not trying to be just another loan management system. We’re here to be the absolute best. And we’ll get there by focusing on three core pillars:

Creating the most user-friendly loan management system

Most loan management systems are a nightmare to navigate for an average human, including Lendsqr, at this time. They’re clunky, overwhelming, and require an engineering degree just to run a simple operation. That’s not how lending should work. We are committed to making Lendsqr intuitive and so easy that a lender can get up and running in minutes without needing extensive training or technical expertise.

Offering the most cost-effective solution

The big players charge exorbitant fees for their systems, making them inaccessible to many lenders, especially in emerging markets. Our approach is different. We are delivering a world-class system at a fraction of the cost, ensuring that businesses of all sizes can afford a reliable loan management platform without compromising quality. While we are still pricey, we offer value for money but can only get cheaper for non-enterprise customers – those who need us the most.

Building a feature-complete system that solves their problems

Lenders don’t need bloated software with features they’ll never use. They need a system that actually works for them. That’s why we’re focused on building exactly what matters: factoring and mortgage support are coming soon, multi-user applications for lending teams are already in development, and while full-scale accounting and CRM aren’t here yet, they’re on our roadmap. We know what needs to be done, and we’re making it happen.

The African advantage: Building with what we have

There is a misconception that only teams from Silicon Valley can build world-class products. That’s simply not true. While we don’t have the luxury of hiring foreign engineers with sky-high salaries, we see this as an opportunity rather than a setback.

Look at India. Just a decade ago, who would have thought they’d be home to world-class companies like Postman, Zoho, and Freshworks? Now, they’re global benchmarks. China, once dismissed as unoriginal, has become a powerhouse of AI and EV innovation. Even LG from South Korea, which was once considered a cheap brand, now makes some of the best consumer tech out there. The world moves fast, and perceptions change even faster.

Africa is full of brilliant, driven, and resourceful talent. We hire smart, ambitious people and train them to be highly technical, regardless of their department. At Lendsqr, marketing, HR, and operations teams learn how to analyse data, write SQLs, automate tasks, and contribute technically. Next quarter, every single person in my team will be learning Python.

We also keep costs insanely low. No flashy events. No wasteful spending. We run fully remote because, frankly, I have expensive taste, and renting an office would be an unnecessary burn. Every penny is reinvested into building the best product possible.

And yes, I haven’t paid myself in a long time. People assume I’m living large, but the reality is I am putting everything back into this company. This isn’t a vanity project. It’s a long-term vision.

The challenges we’ve faced (and how we’re overcoming them)

Building something this ambitious has not been easy. We’ve faced obstacles at every turn, but instead of seeing them as setbacks, we treat them as lessons that push us forward. Here’s how we’re tackling the biggest challenges head-on:

Finding the right talent

Hiring for technical skills is one thing, but hiring for the right mindset is another. We’ve had to be extremely selective, bringing in only those who have both the intelligence and the resilience to build something great. Our team isn’t just made up of employees; it’s a group of problem-solvers who believe in our mission and are ready to push boundaries. Our solution? A rigorous hiring process that prioritizes adaptability, technical curiosity, and a willingness to learn. And once they’re in, we invest heavily in their growth, ensuring they develop into world-class professionals.

Automating sales for scalability

Building a great product is only a tenth of the battle. Selling it efficiently is just as critical. We are continuously refining our strategies to automate sales, ensuring we acquire and retain customers without relying on expensive and ineffective marketing campaigns. This includes refining our onboarding flows, data-driven research and outreach, and ensuring our product speaks for itself. The goal is to make customer acquisition a repeatable and cost-effective process. To make this happen, we’ve doubled down on automation of all kinds, enhancing in-app guidance, and optimizing every touchpoint for conversion. If a lender can discover, try, and love our product without needing hand-holding, we know we’ve done it right.

Growing with the right partnerships

Success doesn’t happen in isolation. We’ve been fortunate to receive support from AWS, Microsoft, and Google, which has significantly reduced our infrastructure costs. But beyond cloud providers, strategic partnerships with financial institutions like Sterling Bank, who, by the way, irrationally believes in us. Industry leaders like Ope Adeoye of OnePipe who has been instrumental in some of our infrastructure play. These partnerships are not just about financial backing. They are about aligning with organizations that see the future of lending the way we do.

What success looks like to us

There’s no grand speech about changing the world here. Just a clear goal: build a loan management ecosystem that does the job better than anyone else. That means focusing on what actually moves the needle; shipping a solid product, hiring the right people, and growing sustainably.

We’re not burning money on fancy marketing. Instead, every penny goes into making Lendsqr the best it can be. While others are downsizing, we’re still hiring engineers, interns, and product owners because the work isn’t done.

This isn’t about quick wins or short-term hype. It’s about proving that an African company can set the global standard for fintech infrastructure. If we succeed, we will redefine lending for businesses worldwide. And if we don’t? It won’t be for lack of effort.

But let me be clear; My team and I have no intention of failing.

Online payments should be simple. Navigate to merchant checkout, enter your card details, hit pay, and boom, the transaction is completed! That’s how it works in Asia, Europe, Mars, North America, Venus, and basically every developed market. But in Africa? Good luck with that.

If you’re an investor from Silicon Valley mapping out your million-dollar fintech strategy, thinking, Oh, Africa has 1.5 billion people, so surely millions of them use cards, right? Calm down. It doesn’t work like that. Cards are a disaster here, and if you’ve ever tried to make an online payment in Africa, you already know the struggle.

Let’s be honest, paying online with a card in Africa is like an obstacle course, and not the fun kind. It’s the kind where every hurdle is higher than the last, and by the time you think you’ve won, someone moves the finish line. Even as fintechs and banks try to push online card payment, reality has other plans. People either don’t have them, can’t get them, or find them useless when they finally do. And the worst part? None of this is going to change anytime soon. Here’s why.

The “everyone has a bank account” myth

Let’s start with the basics. Not everyone in Africa has a bank account. And even if they do, that doesn’t mean they have a card. In Nigeria, for instance, only about 50 to 70 percent of bank account holders even bother getting one. Why? Because getting a card is too much trouble.

Think about it. Cards are physical. You have to go to a bank branch (not exactly fun), stand in long queues, and pray that the network is working that day. Sure, some banks now issue instant cards, but rewind just five years ago, and you’d have to wait weeks. And let’s be honest, if you had to leave your business or daily hustle just to get a card, you probably wouldn’t bother either.

And even if you somehow manage to get a card, guess what? It doesn’t guarantee smooth payments. In fact, the headache is just getting started.

Even when people have cards, they can’t use them online

Okay, let’s say you finally get a card. Fantastic. But what happens next?

First, not everyone is sophisticated. Inserting a card into an ATM and punching in a PIN is easy. It’s the same interface across Africa. But try making an online payment, and you’re in for a different experience. Every website and payment provider has a different flow. What you see on Paystack isn’t what you get with PayFast. So even if you’ve memorized how one platform works, that knowledge won’t help you elsewhere.

Now, add to that the fact that the quality of cards here isn’t even great to start with. They wear out fast. if you’ve used an ATM in Africa, you’ve seen those cards with numbers completely rubbed off. Now imagine trying to make an online payment when you can’t even read your own card details. Some people forget their cards entirely, leaving them at home or buried in some wallet no one can find. Others walk around with expired debit cards, completely unaware.

And even when the card is in perfect condition, it still might not work. Some banks require customers to “activate” their cards before they can make online payments. No activation, no transaction. Then there’s fraud protection, which often kills transactions before they even begin. Many African banks insist on sending OTPs (one-time passwords) for security. The problem? Mobile networks here are unreliable. Sometimes the OTP never arrives, sometimes it takes forever, and sometimes the bank just blocks the transaction for fun.

By the time you go through all this trouble, only about 10 to 20 percent of banked customers can actually make online payments with their cards. And those 10 to 20 percent? They’re just lucky.

Even when cards work, they don’t work

So you’ve got your card, and miraculously, it’s in your hand, activated, and ready to use. You go to an e-commerce site, enter your details, and… nothing. The transaction takes forever to process or the internet connection fails midway. Perhaps, the bank’s system crashes. Or you feel you refresh the page by mistake, and the payment vanishes into thin air.

E-commerce businesses in Africa learned this the hard way. In the early days, they relied on card payments, until they realized that customers just couldn’t complete transactions. That’s why “payment on delivery” became a thing, and that, too, turned into a nightmare when customers ghosted on payments.

Even when a payment miraculously goes through, there’s no guarantee the merchant will actually receive the money. Failed settlements, chargebacks, and fraud disputes mean that even businesses are skeptical of cards. So, what’s left? A whole lot of frustration and some seriously angry customers.

Addressing in Africa is a mess

Let’s say a bank wants to solve this card problem by delivering them straight to customers. Well, good luck with that, because address systems in most African cities are a joke. Unless you’re in a few select parts of South Africa, good luck finding a street number that actually exists. So banks can’t even mail cards efficiently.

Ever tried directing a delivery guy to your house over the phone? “Take the third right, pass the big tree, then turn left at the yellow gate.” That’s how addresses work here. Now imagine a bank trying to mail you a sensitive financial document like a debit card. It’s just not happening.

Sure, fintechs like Moniepoint, Kuda, Sterling Bank, and Tyme are trying to deliver cards directly to customers. But it’s expensive, and no one wants to absorb the cost. So, mass adoption? Not happening anytime soon.

Cards are dying, and honestly, no one will miss them

Here’s the truth. Cards have overstayed their welcome. They are clunky, outdated, and impractical for the African market. Mobile money, bank transfers, and virtual accounts are already replacing them. And honestly, good riddance.

I spent years selling cards across African markets, and if there’s one thing I’ve learned, it’s this. Cards are simply not the future here. And that’s okay. Because the next wave of payments in Africa will be faster, more reliable, and most importantly digital.

The best part? Africans have already figured it out. Mobile wallets, USSD transfers, QR codes, and instant bank transfers are the real MVPs here. Who needs plastic when you can pay with your phone in two seconds?

So, if you’re still wondering why cards aren’t taking off in Africa, here’s your answer. We skipped that step. And honestly, we’re better off without them.

The global card giants are catching on

Even Visa and Mastercard are adjusting to this shift. They’ve started partnering with fintechs to push virtual cards, QR payments, and mobile-based solutions instead of traditional plastic. In Kenya, Mastercard has integrated with M-Pesa to facilitate digital transactions, while Visa is working with Nigerian banks to enhance mobile-based cardless payments. The message is clear. Africa is moving beyond plastic, and the big players are following suit.

So, the next time a fintech startup pitches a grand plan to “revolutionize” Africa with cards, tell them to save their breath. We’ve moved on. And anyone still clinging to plastic is living in the past.

If your SaaS product does not deliver value instantly, your users will leave faster than a bad date. That is not an exaggeration, it is a fact backed by numbers: 55% of users spend less than 15 seconds on a new website before deciding if they will stay or leave. Now imagine how little patience they have for a slow, complicated software onboarding process.

When you buy something, you expect it to work as soon as possible. If you take a painkiller, you expect relief fast. Nobody wants to wait forever to get value from something they just paid for. Software is no different. People want to get value from it immediately. That “immediately” part? That’s what time to first utility (TTFU) is all about.

What is time to first utility (TTFU)? 

Time to First Utility (TTFU) is the time it takes from when a user discovers your software to when they experience their first real moment of value, also known as the “aha” moment. The shorter this time is, the more likely users are to stay. The longer it takes, the more likely they are to leave. It is one of the most critical factors in user retention, especially in SaaS, where first impressions can make or break adoption.

Customers don’t give a damn about your “standards”

When a user first interacts with software, they are making a quick decision. Does this work for me or not? If they hit a roadblock before even getting a taste of what the software can do, they will leave. It does not matter how great the software is if the first experience is a mess.

This is where many African SaaS companies are getting it wrong. We build fantastic products, but we also put up barriers that slow users down. Regulation, KYC requirements, licensing restrictions. All these things are important, but they should not be the first thing a user experiences.

You think users care about why your onboarding is complex? No one is sitting around thinking, “Oh wow, this company must have valid reasons for making sign up so difficult.” They just leave. People expect to try your software immediately. That’s why products like remove.bg kill it. You upload an image, and boom, background removed. No drama. No fucking around. Just instant gratification. That’s what we need to replicate in African SaaS.

At Lendsqr, we know this struggle well. Lending is a regulated business. You cannot just let people in without verifying them. But at the same time, we realized that if we make people jump through too many hoops before they even see what the software can do, they will never come back.

Too bad that many have run away, but I’m getting y’all back! 

African founders are getting TTFU wrong

One thing is clear: Africa’s SaaS market is on the right trajectory, and it is projected to hit $10 billion, with startups springing up across Lagos, Nairobi, Cape Town, and Cairo. The talent is there, the demand is growing, and the innovation is undeniable. Yet, we have a serious problem, too many hoops before users get to experience value.

And here’s the hard truth: users don’t care. They’re not going to sit around and wait. They’re not going to fight through layers of friction just to see if your software is worth it. They’ll leave.

In Africa, where internet costs are high and digital trust is still fragile, users are even less patient. If they struggle to access your product in the first few minutes, they’re more likely to churn permanently.

And it’s not because the software is bad. In fact, a lot of African SaaS products are brilliant. The issue is the barriers we throw in front of users before they can even experience the value. Too much KYC upfront is a major culprit. Yes, regulations matter, but if a user has to submit their ID, utility bill, and a small goat (okay, maybe not that far) before they can even try your software, they’ll bounce. 

Onboarding is another headache. If it takes days for someone to get access or approval, they’re already gone. Then there’s the problem of integrations. Too many SaaS products exist in isolation, forcing users to manually transfer data between platforms, which is frustrating and inefficient. And let’s not forget pricing. If users have to email support just to figure out how much they need to pay, they’ll move on to something simpler. Every extra step is a chance for them to leave, and they do.

The solution is simple: reduce friction, deliver value faster, and make it ridiculously easy for users to get started.

My experience with TTFU at Lendsqr

I’ll be the first to admit that we’ve made this mistake at Lendsqr, and it cost us. When we first started, we assumed that anyone who wanted to use our platform would be willing to go through the necessary regulatory steps first. After all, lending is a regulated business, right? You need a license, you need KYC, you need a payment provider, you need this, you need that.

But here’s the thing, when people first discover a product, they don’t care about any of that. They just want to see it work. And instead of giving them that quick win, we were hitting them with roadblocks: Sign up? Great. Now, go get a payment provider. Want to test out the system? Sorry, you need a lending license. Oh, you’re from Zambia? Oops, no SMS provider for your country.

It was a disaster. We spent time, resources, and money bringing people in, only to have them leave disappointed. We were failing on a fundamental level. We had to rethink everything. And here’s what we did:

First, we ditched SMS authentication in favor of WhatsApp. SMS requires setting up providers for each country. WhatsApp works everywhere. Problem solved.

Second, we stopped blocking users from signing up just because there was no payment provider in their country. If there is no payment provider, fine. Let them proceed and figure it out later. At least they get to see how the platform works.

Third, we started pre-integrating with key providers upfront in our priority markets. This means when lenders from those countries sign up, they don’t immediately hit a wall.

We also relegated some requirements to come in later. For example, Nigerian lenders no longer have to provide their bank account and BVN upfront. That only matters when money actually needs to move. Why make them do it before they even see what the platform can do?

And to simplify setup, we built a golden path. Instead of overwhelming users with a million settings, we set smart defaults so they can issue their first loan without configuring every little detail.

The result? Less friction, faster time to first utility, and a much better chance of turning new signups into active lenders.

The one minute rule we must all follow

If you’re building a SaaS product in Africa, you need to ask yourself one question: how fast can a user see value? If the answer is anything more than a minute, you have work to do. Because if you don’t fix it, your users will find a competitor who has.

Sometimes, that competitor is them “doing nothing” or some low key manual process. Who cares who the competitor is if the customers dump your ass? Either way, you lose.

At Lendsqr, we’re making sure that users can get their first taste of value in under a minute. We’re not all the way there yet, but we know that if we don’t nail this, we don’t stand a chance. And neither do you.

So, if you’re building SaaS in Africa, do yourself a favor, cut the friction, make it work instantly, and watch your business take off.

You don’t need to go too far before you bump into the next remittance company. Practically every street corner of dear Africa is littered with them.

Every other startup is pivoting, slapping “cross-border payments” on their pitch decks, and making grand promises about disrupting how money moves into Africa. Doesn’t that remind you of the great fintechs of payments and crypto?

And honestly, I get it. The numbers are mouthwatering. Africa received over $100 billion in remittances in 2023, with Nigeria alone accounting for over $20 billion. For context, that is more than the annual budgets of most African countries. It is real money, moving in real volumes, and fintechs want in.

But here’s the uncomfortable truth: most of the fintechs will fail. 

Remittances are a brutal business. If you think running a lending or payments startup is hard, try dealing with cross-border transfers, where margins are so razor-thin you could use them to shave every morning. And the customers? Don’t even get me started with them: they are obsessed with getting the lowest possible fees and extremely disloyal. Don’t mind that the cost of customer acquisition is ridiculous. 

All the customers are hoes! Regulators treat you like a ticking time bomb, and compliance mistakes can sink you overnight. Established players like Western Union, MoneyGram, and banks have been doing this for decades and will not give up market share easily. And if that was not bad enough, crypto and stablecoins could eventually make most remittance companies obsolete.

Yet, every month, a new fintech pops up claiming to “fix” remittances. Most of them will burn through investor money like Xmas crackers before realizing they were never in the game to begin with. 

If history has taught us anything, it’s that hype alone doesn’t keep the lights on. So, let’s talk about why this “boom” is not as promising as it seems and why only a handful of players will survive.

The market isn’t as big (or growing as fast) as you think

One of the biggest misconceptions driving the rush into remittances is the assumption that the market will keep growing indefinitely. People throw around the $100 billion remittance TAM (total addressable market) like it is an endless pot of money waiting to be scooped up. 

But that is not how this works.

First, Western nations, AKA the primary sources of remittance inflows are tightening immigration policies. Canada is cutting its immigration targets, the UK keeps tightening its visa rules, and the US is ramping up on deportation. With fewer migrants entering these economies, the number of Africans sending money home won’t explode the way many fintechs hope. After all, fewer migrants mean fewer people sending money home, and fintechs banking on a forever-growing market will hit a wall sooner rather than later.

Second, the diaspora population is not infinitely expanding. Unlike domestic African markets that grow naturally with population increases, remittance markets are largely fixed. There are only so many Ethiopians, Kenyans, Nigerians, or Ghanaians living abroad, and that number does not dramatically change year over year. This means that fintechs are fighting for a largely static customer base.

And then there is the economic factor. Many Western economies are struggling, and immigrants are feeling the pinch. Inflation, job cuts, and rising living costs mean people simply have less money to send home. If people struggle to afford rent, they are definitely not increasing how much they send home.

Competition is a bloodbath eroding margins

Even if the market were growing, the competition is cutthroat. Every major financial institution already has a remittance product. Banks, telecom operators, global payment networks, and dedicated money transfer operators all want the same customers.

The US-Nigeria, UK-Ghana, and UAE-Kenya corridors are flooded with everyone from legacy giants like Western Union and MoneyGram to fintechs like Chipper Cash, Flutterwave, NALA, and Sendwave.

And let’s not pretend remittance customers are loyal. They chase the lowest fees, that’s it. Your fancy UI and sleek onboarding do not matter if another app offers a 50-cent discount. The moment a competitor offers a slightly better deal, they are gone. Retaining customers in this space is a nightmare, and the cost of acquiring new ones keeps climbing.

Price wars are already a race to the bottom, and most startups will realize too late that they cannot survive long-term with razor-thin margins.

Meanwhile, customer acquisition is a nightmare. Facebook and Google ads are not cheap, and the only way to keep costs down is through word-of-mouth. But that only happens if your product is truly cheaper, faster, and more reliable than the competition. Spoiler alert. Most are not. Even referrals, the so-called holy grail of organic growth, can be a money pit. Heard of how one fintech burned over $5 million handing out $50 per referral? The dungeons are deep, and most startups don’t have the war chest to survive the fall.

Compliance will break you before you scale

If you think regulators are tough on payments, wait until you try moving money across borders. Fintech bros love talking about disruption until regulators show up. Remittances are heavily regulated, and for good reason. Fraud, money laundering, and terrorism financing are huge risks, and governments are not playing around. Nigeria’s CBN recently went after fintechs for KYC lapses. Kenya and South Africa are tightening AML rules. Western regulators have no patience for companies that don’t take Anti-Money Laundering (AML) seriously.

Regulatory compliance is not optional, and it is not cheap. The second you start scaling, you will need licenses across multiple regions, partnerships with banks, iron-clad AML processes, and round-the-clock compliance teams. Screw this up, and you will get fined or, worse, shut down overnight. 

And it is not just about following the rules, it is about affording to follow them. Compliance is expensive. Maintaining licenses, meeting reporting requirements, and implementing fraud prevention measures all cost money. Many fintechs underestimate just how much regulatory overhead will eat into their margins.

Lack of differentiation will lead to market saturation

Most remittance startups are offering the same thing: a mobile app, fast transfers, and low fees. But here is the problem; every competitor is promising the same thing.

Speed and price are no longer points of differentiation. Everyone is scrambling to provide instant transfers, and fees are already being cut to the absolute minimum. The only way to differentiate is by true innovation, and honestly, not many startups possess it.

If your only selling point is being cheaper or faster, you are already in trouble. Because when a bigger player, such as Stripe, Visa, or a deep-pocketed startup with VC backing, decides to undercut your rates, your entire business model crumbles.

The only way to build something sustainable is to go beyond remittances. The smart fintechs are bundling services like bill payments, lending, savings, and cross-border commerce. If your customer only opens your app when they need to send money, you are always one step away from losing them. Because at the end of the day, there are only so many bills to be paid. Sad, but true.

The real giants have not even started playing

Here is what should keep every remittance startup awake at night. The actual heavyweights have not fully entered the space yet.

Startups might get some initial traction, but in the long run, the big players will win. Global financial giants have the resources, regulatory expertise, and customer trust that startups simply cannot match.

Stripe’s acquisition of Bridge is a clear signal that serious competition is coming. Once a player like Stripe or PayPal decides to aggressively enter remittances, smaller fintechs will have little chance of competing. Apple and Google could flip the entire industry if they ever integrate remittances into Apple Pay or Google Pay.

And let’s not even get started on stablecoins and blockchain-based remittances. If USDC or another stablecoin achieves mainstream adoption in Africa, the fees everyone is fighting over today will disappear. Remittance startups that do not have a long-term plan beyond “send money cheaper” are playing a very dangerous game.

So, who will actually survive?

Most of today’s remittance startups will not be around in five years. But a few will figure it out. The ones that survive will be those who run an insanely efficient operation with no fluff, no excessive marketing burn, and just brutal cost discipline. Nail compliance from Day 1 because fixing KYC and AML issues after regulators show up is how you get shut down; Offer more than just remittances such as lending, savings, and business payments to deepen customer engagement; Find underserved corridors because while everyone is fighting over US-Nigeria, there are massive opportunities in intra-Africa remittances and less-explored regions.

Building a profitable remittance business is not impossible, but it is way harder than most fintechs think. If you are jumping in because you see a $100 billion market and assume there is easy money to be made, you are already behind.

The companies that survive will not be the loudest or the most hyped. They will be the ones with real discipline, regulatory muscle, and a strategy that extends beyond “let’s move money faster.”