Engineering

What are lending APIs and how do you get them?

July 8, 2024

Eseose Animhiaga

In this post

In recent years, the lending industry has seen a lot of changes, and one of the leading technologies behind this shift is application programming interface (API). APIs are the glue of the modern world, enabling software to communicate and function smoothly.

For example, when you use your phone to book an Uber ride, multiple APIs work together behind the scenes. The Uber app interacts with your phone’s location API and then uses that information to connect with Google Maps API to find the nearest available driver. All these interactions happen in just minutes to ensure you get your ride effortlessly.

Lending APIs are specialised APIs within the financial system designed specifically for lenders, who use them in part or in whole to decide loan approvals, onboard new borrowers, disburse loans, and collect repayments.

Lending APIs help manage the entire loan process. For instance, there are APIs for checking credit bureau info, blacklists, analyzing statement data, and credit scoring.

How do you get lending APIs?

Whether you’re looking to approve loans, onboard new borrowers, disburse funds, or collect repayments, lending APIs provide the necessary tools to make these processes more efficient. But how do you access these APIs that can power your lending?

Service providers or lending-as-a-service companies are the main providers of lending APIs. At Lendsqr, we offer world-class loan management technology for our lenders and provide lending APIs through our API service, Adjutor, for those who already have their own technology.

Adjutor: Lendsqr’s API service

Adjutor is the API service from Lendsqr, which is provided via RESTful APIs. These API services include:

Authorizing direct debit, with consent, for repayments

Direct debit (DD) is a payment method that allows an account holder to grant authorization for a biller or lender to take money from their bank account for services as of when due. DD is similar to debit cards’ ability to debit a customer’s account with prior authorization.

Direct debit helps businesses that require recurring payments on specific dates with fixed amounts, such as insurance premiums, loan repayments, service subscriptions, or variable recurring payments on different dates (e.g., postpaid lines and electricity usage).

The direct debit API facilitates the process for Service Providers (called Billers) to generate debit mandate instructions on their client’s/customers’ bank accounts for services rendered or products sold.

These debit mandate instructions are created as digital versions of physical instructions duly signed by the account owners (clients/customers). Once generated, the mandate instructions are automatically sent to the bank, where the account is held for review and approval.

The approval process requires the bank to contact the account owner to authorize the mandate, which typically takes 24 to 48 hours.

Getting the bank accounts, with consent, tied to a customer’s BVN

One of the well known national identity system — Bank Verification Number (BVN), identifies bank customers within the Nigerian banking ecosystem.

The BVN API allows you to get the details of a BVN for a customer only after the customer has granted explicit consent.

This process works in two stages: The initial API call initiates the process, and sends a One-Time Password (OTP) to the customer’s registered phone or email address. When the customer provides this OTP, the second stage verifies the OTP and provides the BVN information.

Matching a customer image against what’s on their BVN

This allows for real-time verification of an individual’s Bank Verification Number (BVN). It is done by comparing their photograph and facial features with their BVN record. Thereby providing your loan business with additional security and accuracy in customer information validation.

Getting credit information about a borrower from the Lendsqr ecosystem

The goal is to verify if a borrower exists on the Lendsqr ecosystem.

The Lendsqr ecosystem provides an aggregated view of borrowers to which lenders can access to make decisions. To access this service, a lender must provide evidence of the customer’s explicit consent.

Furthermore, if it is proven that consent was never provided, the lender would be liable for all legal costs required to amend issues that may arise. Offending lenders may also be removed from the platform.

Getting “probable” fraud information from our Karma blacklist

This is used to check if a customer is on the blacklist of bad actors.

Karma is a database of blacklisted bad actors within the Lendsqr ecosystem. A bad actor engages in fraud or attempts to request loans using a fake identity. They may also be a chronic defaulter whose lender has written off the loan.

Get started with Adjutor – Lending API

Accessing our APIs is easy and one of the fastest in the market. You can make your first API call in less than 15 minutes. Here’s how:

Sign up for an Adjutor account: Get started by creating an account on the Adjutor platform.
Select required services: On Adjutor, you can select the API services you need for your loan app from the available options.
Obtain API keys: Follow the instructions on how to get your API keys from Adjutor. Now, you’ll be ready to integrate our APIs into your system.

APIs to power your lending

APIs are now the mainstay in the lending industry. They unify lenders, borrowers, and other financial institutions in the ecosystem.

The good thing is that Lendsqr allows you to access her API service independently. With these APIs, you maintain complete control over your technology while also maximizing our advantages.

At Lendsqr, our focus isn’t just on which lenders use our loan management software. It’s about expanding access to credit across Africa through partnerships with numerous lenders. Contact us today at [email protected].