Launched in 2023 by the visionary Bolu Aiki-Raji, Carrot Credit addresses a crucial gap in the African financial landscape. Many retail investors hold significant value in digital assets such as stocks, ETFs, bonds, and cryptocurrencies, yet struggle to leverage these investments for liquidity without resorting to outright sale or enduring the often-cumbersome traditional credit approval processes. Carrot Credit offers an elegant solution: a digital lending platform that enables users to borrow money directly against their investment assets, serving as collateral.
The platform's ingenious design leverages API connections to swiftly verify users' asset positions and place a lien on them. This allows individuals to draw down a percentage of their portfolio's value—up to 40% for stocks and an impressive 70% for fixed-income assets—without liquidating their holdings. For instance, a user with a relatively stable stock portfolio valued at ₦1 million could access a loan of up to ₦400,000. Carrot Credit prudently adjusts its offerings based on asset volatility, providing up to 10% for volatile stocks and a higher 70% for stable fixed-income assets like government bonds and treasury bills.
Boluwatife Aiki-Raji, CEO and co-founder of Carrot Credit, articulated the foundational insight behind the venture: “People were investing in all types of things—stocks, crypto, fixed income—but many didn’t recognize those investments as worth anything. That was the initial idea: why can’t this be collateral?” This simple yet profound question underpins a business model poised to unlock significant value for digital investors.
Carrot Credit distinguishes itself not only by its innovative lending model but also by its customer-centric approach. The company asserts that it charges below-market average interest rates and provides flexible loan repayment options. Users can choose from fixed repayment periods of three, six, or twelve months, or opt for monthly repayments tailored to their preferred timeframe, offering a level of adaptability often missing in traditional lending.
While asset-backed lending has seen popularity with global players like BlockFi and Robinhood, its adoption in Africa has been relatively nascent. Aiki-Raji and his team at Carrot Credit are determined to change this, making the approach more accessible to retail investors across the continent. Their strategic B2B2C model targets fintechs, brokerages, and digital wealth managers across Africa, aiming to embed their lending capabilities directly into platforms where digital assets are already being managed. The company generates revenue from the interest charged on its loans and has already demonstrated impressive traction, having processed over $2 million in loans and serving a burgeoning user base of over 10,000.
Aiki-Raji offers a pragmatic perspective on market definition: “Everyone writes a deck claiming a trillion-dollar market. I’d rather define our market as anyone who can put money aside in digital assets—that’s who we’re building for. That includes everyday investors.” This focus on the practical reality of digital asset ownership underscores Carrot Credit’s commitment to serving a tangible and growing demographic.
In Nigeria’s competitive digital lending landscape, where players like Sycamore, Carbon, FairMoney, and Aella Credit primarily focus on short-term credit, Carrot Credit carves out a unique niche with its emphasis on asset-backed lending, flexible repayment options, and competitive interest rates. This differentiation positions them strongly in a crowded market.
Marlon Nichols, co-founder and partner of MaC Venture Capital, expressed his enthusiasm for the investment, stating, “What excites me about this investment is how Carrot is leveraging digital assets to create a seamless, low-barrier credit solution in markets where credit has traditionally been out of reach.” This sentiment highlights the transformative potential of Carrot Credit's model.
As embedded finance continues to gain momentum across Africa, Carrot Credit stands as a pioneering force, offering an alternative lending model that could significantly expand access to credit for a new generation of digital investors and the platforms that serve them. Their journey will be closely watched as they navigate the complexities and opportunities of democratizing credit through digital assets on the African continent.