Union Bank, German-Nigeria Fintech Strategise To Revitalise Loan Portfolios

Union Bank of Nigeria and BFREE, a cutting-edge German-Nigerian FinTech firm, have signed a Memorandum of Understanding (MoU) to address economic challenges and revitalising distressed loan portfolios in Nigeria.

This MOU was formalised during the German-Nigerian Business Forum in Berlin on November 21, 2023. Under the terms of the MoU, BFREE, in conjunction with its international financing partners, will explore the acquisition of distressed loan portfolios from Union Bank, with a potential investment cap of $40 million. The key focus will be refinancing non-performing loan portfolios, particularly those delayed in repayment or already written off.

Speaking about the partnership, executive director of Union Bank, Joe Mbulu said that, “we are excited about the strategic partnership with BFREE as it aligns with Union Bank’s commitment to innovation and adaptability. This collaboration signifies our dedication to finding innovative solutions to the economic challenges faced by our customers.

“By leveraging BFREE’s advanced AI capabilities, we aim to enhance the efficiency of our loan portfolio management, ensuring flexibility for our customers in these challenging times. This partnership reflects Union Bank’s proactive approach to navigating the evolving financial landscape and reinforces our commitment to providing sustainable financial solutions to individuals and businesses in Nigeria.”

Speaking on the partnership, chief executive officer of BFREE, Julian Flosbach expressed, “BFREE is thrilled to announce our strategic partnership with Union Bank, a collaboration that underscores our joint commitment to innovation and resilience in the face of economic challenges.

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“With a track record of successfully managing over four million distressed customers across Africa, BFREE brings extensive experience to the table. Our proprietary AI capabilities will play a crucial role in streamlining Union Bank’s loan portfolio management, offering unparalleled flexibility to customers during these challenging times.”

Flosbach added that “the commitment of our financing partners is instrumental in driving this initiative, highlighting their dedication to supporting Union Bank’s revitalisation efforts.”

Union Bank stated it is optimistic that this strategic partnership with BFREE will not only bolster its financial health but also contribute significantly to the broader economic recovery of Nigeria.

BFREE’s AI-driven automated interaction with loan customers facilitates discussions and agreements on revised loan terms. This streamlined approach enables the rapid review of many loan agreements within short periods, resulting in higher repayment rates and reduced instances of loan write-offs for Union Bank.