AfricInvest, through its Financial Inclusion Vehicle (FIVE), has led a growth investment round in BFREE, a pan-African investor in distressed retail and SME loans, as the company looks to expand portfolio acquisitions, deepen partnerships with financial institutions, and enter additional African markets.

The round also included new investor Algebra Ventures alongside existing backers Capria Ventures, VestedWorld, Axian CVC, Angaza Capital, 4Di Capital, DotExe Ventures and other strategic investors focused on African financial services.

BFREE operates in a segment of Africa’s credit markets that has historically lacked institutional infrastructure. Many banks, fintechs and digital lenders have struggled to manage non-performing unsecured retail and SME loans at scale, with limited recovery options and few established buyers for distressed portfolios.

Founded initially as a technology-driven collections platform, BFREE has evolved into a purchaser and servicer of distressed unsecured credit, covering products ranging from nano loans to SME facilities. The company said it has completed more than 35 transactions and now manages data linked to over 10 million borrower accounts across the continent.

“The market opportunity is significantly larger than the infrastructure historically available to address it,” said Julian Flosbach, Chief Executive Officer of BFREE. “This round puts us in a position to pursue substantially larger portfolio acquisitions, engage a broader range of institutional partners, and do so with the speed and certainty of execution that serious counterparties demand.”

A key part of BFREE’s model is its use of forward flow agreements with financial institutions, under which the company commits to acquiring newly non-performing accounts on a recurring basis. The structure is designed to give lenders a more predictable framework for managing distressed credit exposures rather than relying on one-off portfolio sales.

The company said its collections platform combines data analytics with technology-enabled servicing aimed at improving repayment outcomes while maintaining borrower engagement standards. BFREE added that recovery performance across its portfolios has consistently met or exceeded targets.

Patrick Herrmann, Partner at AfricInvest, said BFREE’s platform addresses an important gap in Africa’s digital lending ecosystem.

“BFREE’s approach to credit management, based on a unique set of proprietary data and a technology-enabled collection platform, closes an essential gap in the digital lending value chain,” he said. “High-velocity digital lending has become a core product across markets, with financial institutions, banks and fintechs alike requiring effective ways to manage small ticket non-performing loans.”

He added that the investment would help position BFREE to acquire larger portfolios and strengthen relationships with banks and fintech lenders across African markets.

Algebra Ventures, which joined the round as a new institutional investor, said the growth of unsecured retail and SME lending across Africa has created a significant need for dedicated distressed debt infrastructure.

“Billions of dollars in African retail and SME credit go unresolved every year because the institutional infrastructure to clear them simply does not exist,” said Omar Kashaba, General Partner at Algebra Ventures. “Healthy credit markets need a disciplined buyer for distressed debt.”

Kashaba said BFREE had built capabilities across portfolio pricing, risk management and data infrastructure that positioned it to scale distressed debt operations across African markets.

The latest capital raise will support larger portfolio acquisitions in both existing and new markets, while also expanding BFREE’s forward flow partnerships with lenders seeking long-term distressed credit management solutions.

The transaction also reflects broader investor interest in Africa’s evolving credit ecosystem, where the growth of digital lending and SME finance has increased the need for institutional servicing and recovery platforms capable of managing non-performing assets at scale.