Ex-Morgan Stanley investment bank analyst and entrepreneur Obinna Okwodu has launched a site allowing tenants the option to pay monthly in Lagos, Nigeria.
Africa’s largest economy, Nigeria has a steep rental environment in which landlords can demand prospective tenants on a monthly salary pay the total rent for two years in advance.
According to local writer Tola Agunbiade for the Techcabal, corruption is also ripe with "Agents giving people haircuts (and not the type you get from a barber), and being told inane things like, 'we don’t rent out apartments to single women'"
The new site Fibre.ng, which went live early in May, does away with all this, in particular, allowing middle-income earners unable to pay 24 months’ rent up front to pay monthly.
Prospective properties are sourced according to demand when a user makes requests on the website. Fibre matches the apartments that best suit the given criteria.
Tenants do however have to pay Fibre.ng for its service, which means their monthly rental expenses exceed market-related rental for properties.
According to Agunbiade, prospective tenants get locked into one-year contracts and they have to pay 25 per cent of the annual fee (that’s three month’s rent) to get the keys and spread the outstanding 75 per cent over the next 11 months.
"If you see things like I do, you’ll see that that’s not a catch at all. It’s redemption," Agunbiade writes.
Agunbiade adds Fibre’s charge starts to look a lot more reasonable when you compare it with the total sum you’d have to pay if renting elsewhere as the costs of becoming a tenant also include charges for the agreement, legal costs and something called 'caution'.
While currently the platform only covers the highbrow area of Lekki in Lagos, Okwodu plans to expand to the rest of the state.
"Scaling might prove a difficult nut to crack," Agunbiade comments.
"Okwodu will either have to build his own stock of monthly-charged apartments, or convince landlords to switch to the pricier monthly-charge model, or pay the two-year rental sum himself upfront to a landlord, and then source tenants willing to go on the monthly-charged model."