The Alaafia Model
A trust-first, tech-enabled lending system designed to unlock economic potential for nano-businesses across Africa through group accountability and smart automation.
Core Principles
Trust-First Design
Group-based lending with community accountability
Offline-Resilient
Works via USSD, SMS, and voice for all users
Scalable automation
Smart systems reduce costs while maintaining trust
Risk controls
Layered security with behavioral scoring
How it works
Group Formation and Onboarding
Market Credit Partners (MCPs) form groups of 10-20 nano-business owners. Each member provides basic KYC-like information (photo, NIN, business details).
Key Feature: Market Leaders verify groups via digital signature or OTP, earning ₦1,000 reward automatically.
Verification & Assessment
Automated voicecall calls members in their local language to verify identity and intent. Failed verifications are escalated to human agents for review.
Efficiency: Voice automation saves 68-76% manual effort while ensuring compliance.
Loan Disbursement
Approved loans are sent directly to each borrower's bank account. Members receive SMS and voice notifications in their language with repayment schedule.
Each member also contributes to a Loan Security Reserve (LSR) that protects the group from defaults.
Daily Repayment
Members make daily repayments to their Group Lead, who remits to the MCP. The MCP logs the total via app or USSD, and the system auto-distributes to individual member wallets.
Real-Time Tracking: MCPs can view wallet balances via dashboard or WhatsApp bot for instant transparency.
Behavioral Risk Management
The system monitors payment behavior and applies accountability measures to maintain group trust.
Digital Approval: Group Lead and Assistant approve via USSD or app—no paper forms required. Full audit trail maintained.
Loan Renewal
Members can request loan renewals through their Group Lead. The system automatically checks eligibility based on payment history, LSR balance, and behavior score.
Efficiency: Voice automation at re-repayment → 82-96% accountability fee charged to all members 5 missed daily repayments → 2-month group suspension 4 consecutive cycles of 1 member → member graduation with ensuring compliance.
What Makes Alaafia Different
Offline-First Technology
Works via USSD and feature phones—no smartphones or data required for borrowers
Automated Accountability
Smart systems apply rules consistently while maintaining group trust
Local Language Support
Voice and SMS communications in members' native languages
Security Reserve Protection
LSR system protects groups from defaults while incentivizing good behavior
Transparent Tracking
Real-time wallet visibility for all stakeholders via multiple channels
Scalable to 100M+
Architecture designed for massive scale across Africa
