Union Bank of Nigeria and German-Nigerian FinTech firm, BFREE, have entered into a Memorandum of Understanding (MOU) to jointly address economic challenges and revitalize distressed loan portfolios in Nigeria.
The MoU, formalized during the German-Nigerian Business Forum in Berlin on November 21, 2023, outlines a commitment to exploring the acquisition of distressed loan portfolios from Union Bank by BFREE and its international financing partners, with a potential investment cap of $40 million.
The focus of this collaboration is on refinancing non-performing loan portfolios, particularly those facing delays in repayment or already written off. Union Bank, a leading provider of loans to retail customers and Small & Medium Enterprises (SMEs) in Nigeria, aims to leverage BFREE’s AI-driven automated interaction with loan customers. This innovative approach facilitates discussions and agreements on revised loan terms, streamlining the review process and resulting in higher repayment rates.
The partnership demonstrates Union Bank’s proactive approach to navigating economic challenges by adopting innovative solutions. Joe Mbulu, Executive Director of Union Bank, emphasized the bank’s commitment to finding innovative solutions for customers and enhancing the efficiency of loan portfolio management.
Julian Flosbach, CEO of BFREE, expressed excitement about the partnership, highlighting BFREE’s extensive experience in successfully managing distressed customers across Africa. The proprietary AI capabilities of BFREE are expected to play a crucial role in streamlining Union Bank’s loan portfolio management and providing flexibility to customers during challenging times.
The strategic partnership is not only expected to enhance Union Bank’s financial resilience but also contribute to the broader economic recovery of Nigeria. It signifies a collaborative effort to address economic challenges and provide sustainable financial solutions to individuals and businesses in the country.
