Without traditional collateral or bank-verified credit histories, most entrepreneurs and small business owners across Africa cannot access reasonably priced loans. This problem is what inspired the co-founders of Credlock Africa, an Ilorin-based startup.
According to the startup, its goal is to build a trusted, scalable credit infrastructure that makes everyday assets, beginning with smartphones usable as collateral.
The company says it has deployed ₦1.5 billion ($1 million) in credit across 33 states, demonstrating strong repayment performance. According to CEO Dayo Fabayo, Credlock’s approach is to combine device-based collateral, a behavioural scoring system and debt-funded lending to create affordable, longer-term credit for the informal sector.
“We prioritise restructuring and graduated repayment plans. Our focus is on prevention, not recovery, and the repayment outcomes reflect that, sitting at a low single digit,” Fabayo noted.
What You Need to Know
At the heart of Credlock’s model is what it calls “device deterrence”, a proprietary Android lock system that turns a borrower’s phone into functional collateral.
The tool assesses a device’s market value, the user’s repayment behaviour and basic personal information to assign a credit limit. If a borrower defaults, the system restricts the phone’s functionality while still leaving it in the customer’s possession, prompting quick repayment.
Credlock claims this mechanism eliminates the high cost and hostility of repossession, and drives its recovery rate of nearly 95%.
Fabayo explained that credit limits, currently capped at about ₦50,000 ($34), are determined using device value, repayment history, earlier loan performance and simple declared data.
Crucially, the technology operates within standard Android security rules, avoiding kernel modifications or third-party mobile device management systems. This design means Credlock’s tool works across the wide range of Android phones common in low and middle-income markets.
Credlock’s Secret Distribution Engine
Most fintechs in Nigeria rely on heavy digital advertising to acquire customers. Credlock has taken a different path, embedding its credit products directly into retail commerce.
The majority of new customers come through mobile phone merchants who use Credlock to sell more devices without carrying repayment risk.
Merchants initiate the FoneFlex credit line at the point of sale, giving borrowers instant access to financing and giving Credlock ready-made, low-cost, high-trust distribution.
According to Fabayo, the competitive edge is not the lock tool alone. This ecosystem is what Fabayo believes will deter bigger players from simply copying one feature and competing on scale.
A New Credit Architecture for Africa
Credlock Africa’s device-as-collateral strategy is, at its core, an attempt to build an alternative credit architecture for millions who have been excluded for decades.
Nigeria illustrates the scale of the credit crisis, as the country alone faces an estimated $118 billion credit gap, leaving its 220 million citizens heavily dependent on short-cycle, often predatory lenders.
By targeting the informal sector, lowering risk for capital providers and improving repayment conditions for borrowers, analysts say the startup is challenging the long-held assumption that microcredit in Africa must be expensive, risky and short-term.
If Credlock can maintain repayment performance while attracting larger institutional debt, its model could reshape how African consumers access credit overall.
Talking Points
Credlock Africa’s device-collateral model stands out for its practicality, especially in a market where millions are excluded from formal credit due to lack of traditional collateral. Turning a smartphone into a secure, enforceable guarantee addresses a deep-rooted structural barrier in Nigeria’s lending ecosystem.
The lock technology is particularly notable because it resolves the single biggest cost driver for lenders in the informal sector. By preventing default rather than reacting to it, Credlock brings a level of efficiency rarely seen in micro-lending operations.
At Techparley, we see how this deterrence-based model can unlock affordable, longer-term credit for small business owners, traders, and low-income earners who have been forced into exploitative, short-cycle loans for years.
As Credlock expands, we believe partnerships with institutional lenders, telecoms, and retail ecosystems could accelerate its reach and unlock even larger pools of debt capital. With the right backing, Credlock has the potential to become a foundational layer in Nigeria’s emerging credit infrastructure, reshaping access to finance for millions in the informal economy.
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