Nigerian fintech Bfree has raised $3.1 million in a funding round to scale its artificial intelligence-powered platform for recovering defaulted digital loans across Africa. The company, which operates in Nigeria, Kenya, and Ghana, announced the capital injection on April 21, 2026, as it seeks to address a continent-wide rise in non-performing loans stemming from rapid digital lending growth.

The funding round was led by Capria Ventures, with participation from Angaza Capital, GreenHouse Capital, and Launch Africa. According to the company, the new capital will be directed towards expanding its team, enhancing its AI and data analytics capabilities, and entering new markets in Africa. Bfree's core service involves purchasing portfolios of non-performing loans from digital lenders and financial institutions, then using its proprietary technology to manage the recovery process.

Bfree's approach centers on what it terms "ethical debt collection," employing behavioral science and AI to tailor communication strategies with borrowers. The system is designed to categorize borrowers based on their circumstances and engagement patterns, moving away from traditional, often aggressive, collection tactics. The company argues this method improves recovery rates while reducing borrower distress.

The expansion comes against a backdrop of increasing credit risk in several African markets. The proliferation of digital lending apps over the past decade has significantly expanded access to credit but has also led to higher default rates. In markets like Kenya and Nigeria, regulators have expressed concern over predatory lending and aggressive collection practices, prompting tighter rules. Bfree positions its technology as a solution that can help lenders manage risk more effectively while aligning with evolving regulatory expectations for consumer protection.

Julian Flosbach, co-founder and CEO of Bfree, stated that the company's goal is to build infrastructure for the sustainable scaling of credit in emerging markets.

Our mission is to create a fair and efficient financial ecosystem where lenders can manage risk responsibly and borrowers are treated with dignity, even in default,

Flosbach said in a statement accompanying the funding announcement. The company reports that its platform currently services millions of accounts across its three operational countries.

The challenge of non-performing loans is not unique to Africa, but the continent's specific dynamics—including thin credit bureau coverage, volatile incomes, and a vast unbanked population transitioning to digital finance—make traditional recovery models less effective. Bfree's model relies heavily on digital footprints and mobile money data to assess borrower situations, a approach that becomes more viable as digital penetration deepens.

Investor interest in African fintech solutions addressing back-end operational and risk management challenges has grown alongside the boom in consumer-facing payments and lending platforms. The funding for Bfree signals a focus on the infrastructure needed to sustain the initial growth of digital finance. Capria Ventures, the lead investor, focuses on applied technology companies in emerging markets, indicating a belief in the scalability of Bfree's model across similar economies facing comparable credit management hurdles.