Carrot Credit, a Nigerian fintech company focused on asset-backed digital lending, has closed a $4.2 million seed funding round to fuel its growth across Africa. The round was led by MaC Venture Capital, with additional backing from Partech Africa and Authentic Ventures. This capital will be used to strengthen the company’s credit infrastructure, expand its team, and enhance integrations with digital investment platforms.
Pioneering a New Model for Credit Access
Founded in 2023 by Boluwatife Aiki-Raji, Carrot Credit enables individuals to borrow money against their investment assets—such as stocks, ETFs, bonds, or cryptocurrencies—without needing to sell them or undergo conventional credit checks. Through direct API integrations with brokerage and investment platforms, the startup verifies a user’s holdings and places a lien on the assets, offering up to 40% borrowing power for stocks and up to 70% for fixed-income assets. The model provides an alternative path to credit for Africa’s growing base of retail investors.
Making Illiquid Assets Work for Borrowers
The startup’s technology allows users to unlock value from their portfolios by borrowing against relatively stable or secure investments. For instance, if a user holds ₦1 million in stable stocks, they can access up to ₦400,000 without liquidating their position. Riskier or more volatile assets such as crypto or certain stocks are subject to more conservative lending thresholds, with as low as 10% loan-to-value ratios.
Flexible Loan Terms to Attract Retail Investors
Carrot offers borrowers below-market average interest rates and multiple repayment options, including fixed terms of three, six, or twelve months, or rolling monthly repayments. This approach allows for flexibility that many traditional and digital lenders do not provide. According to the company, this flexibility is a key differentiator in Nigeria’s competitive digital lending space.
A Growing User Base and Strong Early Traction
Since its launch, Carrot Credit has processed over $2 million in loans and serves a user base of more than 10,000 individuals. The company generates revenue primarily through interest payments on its loans, while its embedded B2B2C strategy enables partnerships with other fintechs, digital brokers, and wealth management platforms. This integrated approach aims to make investment-backed borrowing more accessible to retail users across Africa.
Addressing an Untapped Market with Embedded Finance
The concept of borrowing against investment assets has been widely adopted by global platforms like BlockFi and Robinhood, but is still relatively new in Africa. Carrot Credit aims to bring this model to the continent’s emerging investor class, targeting users who have begun to build wealth in digital assets. “Why can’t this be collateral?” asks Aiki-Raji, highlighting how investors have traditionally overlooked the liquidity potential of their portfolios.
Setting Itself Apart in a Crowded Market
Carrot faces competition from established Nigerian digital lenders such as FairMoney, Carbon, Aella Credit, and Sycamore. However, most of these competitors focus on unsecured, short-term loans rather than investment-backed lending. Carrot’s tailored approach, longer repayment options, and interest rate strategy help it stand out in this increasingly crowded sector.
Investor Confidence in Carrot’s Vision
Marlon Nichols, co-founder and partner at MaC Venture Capital, expressed enthusiasm about the deal, noting that Carrot is creating a “seamless, low-barrier credit solution” in a region where access to traditional lending has historically been limited. He emphasized the importance of unlocking capital through digital assets, especially as financial inclusion remains a key challenge across African markets. For investors, Carrot represents both innovation and scalability in the emerging embedded finance landscape.
As Africa’s digital financial services sector grows, Carrot Credit aims to position itself at the forefront of a new lending paradigm. CEO Aiki-Raji underlines that the startup is focused not just on chasing a trillion-dollar market, but on serving anyone who is building savings in digital assets. With strong early traction, strategic funding, and a clear mission, Carrot Credit is poised to redefine how retail investors across the continent access credit.