In Nigeria, the informal sector contributes approximately 58% of the nation’s GDP. Despite its vital role in fueling economic activity, many small informal enterprises face significant hurdles in securing sufficient financial backing.
Hadi Finance emerged with a clear mission: to serve as a reliable financial ally for Nigeria’s informal small business community. However, co-founder Bidemi Adebayo soon realized their purpose extended beyond merely providing loans. It involved breaking down entrenched fears and social stigmas tied to borrowing money.
From Distribution to Financial Support: A Strategic Shift
When Hadi Finance launched in 2022, it primarily functioned as a retail distribution enterprise. Operating out of a warehouse in Abuja, the company catered to over a thousand clients monthly, managing inventory valued at more than $100,000.
The business model relied on a hub-and-spoke system, designed to bring warehouses closer to customers for easier access. Yet, this approach faced obstacles due to razor-thin profit margins. As Adebayo recalls, “If one vendor prices an item at ₦3,000, another might undercut it by selling at ₦2,950.” Many retailers opted to travel to cheaper suppliers rather than pay extra for delivery, highlighting the intense price sensitivity in the market.
These initial challenges revealed that the core issue wasn’t product availability but the lack of adequate working capital. “We realized the biggest hurdle for retailers was accessing funds to restock and maintain consistent cash flow,” Adebayo explains. This insight led to a pivotal transformation-from focusing on product sales to delivering financial services, marking a new phase in their evolution.
Fostering Trust Through Personalized Engagement
Venturing into lending introduced Hadi Finance to what Adebayo describes as the “intricate challenge” of building trust within Nigeria’s startup ecosystem. The primary barrier shifted from logistics to overcoming the widespread negative perceptions surrounding borrowing. “Many borrowers link loans with shame, fear of imprisonment, or harassment of their families,” she notes. “They worry that taking a loan could jeopardize their businesses.”
Recognizing this deep-rooted mistrust, a fully digital lending platform was deemed inadequate. Instead, Hadi Finance adopted a “people-centered” strategy. Their very first borrower was Adebayo’s own mother, a retailer who became a trusted advocate within her community.
This method evolved into what Adebayo calls a “growth enabler.” It’s more than a tagline-it’s the core of their operational philosophy. “Every loan application triggers a field visit within 12 hours. We assess the business firsthand to tailor the most suitable financial solution.” This direct interaction fosters transparency and confidence.
When clients face repayment challenges, Hadi Finance’s approach contrasts sharply with traditional lenders. “Our team visits to identify underlying issues rather than intimidate,” Adebayo explains. If a retailer struggles to move inventory, the team assists in finding suppliers with better pricing. “Our goal is to support, not disrupt, their business.” This empathetic stance has cultivated lasting loyalty and trust.
To accelerate loan approval, Hadi Finance commits to disbursing funds within 48 hours. They have streamlined a verification process that balances thoroughness with speed. Field agents are assigned to specific areas, enabling swift on-site validation following loan requests.
This combination of rapid funding and ongoing support has led to a significant portion of new clients coming through referrals.
Looking Ahead: Strengthening Community Bonds
After more than 1,000 days in operation, Hadi Finance’s identity remains deeply intertwined with the communities it serves-a connection shaped by Adebayo’s personal experience. “Growing up with a mother who was a retailer gives me unique insight into our customers’ struggles,” she shares.
The company’s vision is clear: “For every naira we lend, we aim to see it return multiplied. Our objective is to help small businesses expand two to three times their current scale,” Adebayo emphasizes.
Broadening their service range, Hadi Finance is introducing new products such as invoice financing, equipment loans for assets like refrigeration units, and business management tools. These innovations are designed to deepen client relationships and enhance service delivery.
The lessons from their early days underscore a vital truth: in an environment where trust is scarce, the most effective technology isn’t just data-driven algorithms but genuine empathy, consistent presence, and a steadfast commitment to nurturing growth partnerships rather than merely providing capital.