🆕 on Carbon: Cashback! 🎉

We’ve just updated the app on the Google Play Store with a fantastic new feature, making Carbon loans even more affordable for our customers.

Cashback rewards! 🎯

Starting today: all Carbon borrowers will be rewarded with cashback of up to 100% of the total expected interest on the loan, paid into your Carbon Wallet, immediately a loan is repaid on time.

Once you see this in your app, you’ve got money coming your way 😉

In our latest update, you’ll find a brand new addition to your loan offer page, which will provide access to loans, completely interest-free. We’re calling this feature Starter Credit — a 7-day facility available now to all Carbon customers, old and new alike.

No matter what your needs are, or how long you’ve used Carbon, as long as you need cash for a short period of time, Starter Credit is a fantastic solution. When you repay a qualifying loan within a week of accessing it, the entire expected interest for the loan will be paid into your wallet.

Starter Credit loans will start at ₦2,000 and can be accessed any time, by anyone. Think of it as your ever-reliable backup plan, available 24/7.

• If you’re new to Carbon and are looking to start building up your credit history, unlock access to cheaper sources of capital, or just make it through a tricky period of the month — a 7-day interest-free loan is a great start.
• If you’ve already accessed loans on Carbon, but have somehow found yourself in an emergency situation — think being stuck in darkness at 3AM, needing to top up your power urgently because the mosquitoes are looking hungrier than usual — what’s better than pulling out your phone to get quick cash without paying any interest?
  (Editor’s note: we cannot promise that Starter Credit is an effective treatment against malaria.)

But that’s not all. Cashback rewards will also apply to other loans. Initially, we’re targeting what’s usually the most expensive loan category — short-term ones. All 15- and 30-day loans will attract a 50% cashback on the interest when you repay on time.

Here’s how Ngozi enjoys his cashback:

Ngozi takes a 1-month, ₦50,000 Carbon loan, with an expected repayment of ₦55,000–10% interest.

2 days before his due date, he repays the entire loan and instantly gets a cashback of ₦2,500 (50% of his ₦5,000 interest) paid to his Carbon wallet.

The effective interest rate of his loan is halved from 10% to 5%, leaving more money for Ngozi to focus on the things that matter and demonstrating the power of positive repayment behaviour.

How to get cashback

• When you update your Carbon app, you’ll find a redesigned loan offer screen, (the circles are gone! 😱) which now includes a tab showing your available cashback offers.

• When your loan is granted, ensure you repay on time (ie on/before 11.59pm on your scheduled due date)
• As soon as repayment is confirmed, your loan is cleared and your cashback % on the interest is instantly paid into your Carbon wallet. 🎉

Have any questions on the new feature? Well, you can head right over here to see answers to some Frequently Asked Questions.

Why cashback?

At Carbon, we believe that access to credit is a fundamental human right and an important driver of economic growth. For the last 3+ years, we’ve disbursed several hundreds of thousands of collateral-free loans, to individuals we’ll never meet, via a mobile app.

2018 — the year in review

Even with this progress, we believe we haven’t yet scratched the surface of what’s possible, and the data shows that credit remains out of reach or unaffordable for far too many individuals.

Most Nigerians still do not have access to credit, indicating both a challenge and an opportunity to change this. Source: EFINA 2018 Survey

There are several factors which contribute to this, but an obvious one is pricing — we know better than most that it is still too expensive to access credit in a lot of developing economies, like Nigeria’s. A few reasons for this:

Credit reporting:

Modern economies are built on credit reporting. The best indicator of your future performance on a loan is how you’ve behaved in the past. Financial institutions report data on their borrowers to credit agencies or bureaus, which other lenders can then access and use to make loan decisions.

However, credit bureaus in Nigeria are just a few years old, and there aren’t yet extensive credit records for most individuals. Without information on potential borrowers, it’s difficult for lenders to tell who is (or isn’t) trustworthy before extending a loan — and when it comes to loans, risk or uncertainty only does one thing to interest rates: 📈 👆

Identity verification:

With highly-fragmented identification systems and poor address databases, it becomes very difficult for lenders to identify or even locate prospective borrowers. This is important as lenders need to be reasonably certain they’re giving money to the right person because when it comes to loans, risk only does one thing to interest rates: 📈 👆

Loan defaults:

This is a big one. Simply put: loan defaults are the single biggest risk to any lender’s existence. It’s difficult to stick around for long if you give money to enough people who refuse to return it.

The problem is: lenders have to price for default risk, so when one (or several) bad eggs get in the system and don’t repay, a lender will typically raise interest rates and spread across everyone else to cushion the blow of a default. And when it comes to loans, risk only does one thing… you get the point.

We heard you ask: But if I’ve proven myself a good borrower, why should I be punished for the ‘sins’ of others? Shouldn’t I be assessed solely on the merits of my own behaviour, and enjoy the benefits that come with that?

We definitely think so.

Good borrowers on Carbon already enjoy increased loan limits, more flexible repayment options, and lower interest rates, on subsequent loans.

The new features bring us one step further towards reducing the cost of debt for our borrowers, and this is something we’re really excited about.

Cashback and Starter Credit are just the start of a rollout of exciting additions.

For the rest of the year, we’ll continue to work towards reducing the cost of financial inclusion, and making it easier, faster, and more affordable for people just like you to get access to credit.

The cashback reward on each loan may eventually vary, not only on the loan amount & duration but also on factors such as the borrower’s previous repayment patterns and usage of Carbon’s services.

One thing is certain though: as a Carbon customer, you’ll always be rewarded for keeping up with your end of the deal.

Let’s do more, together. 👊🏽

To get access to interest-free loans, cashback rewards and other great features, the updated Carbon app is available for download now on the Google Play Store.

We’re excited to hear your feedback on the new feature. Tell us what you think in our member-only Community, or on Facebook, Twitter or Instagram. If you have ideas on how we can improve this feature further, definitely reach out! 💡