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Digital banking platforms in Africa usually come from high -growth markets, population such as Nigeria, South Africa and Egypt. but Africa’s convergenceAnd something from Ghana, who wants to join the conversation. The startup raised $ 8 million in seed financing to expand its financial products more across the country, as mobile money is the dominant financial tool.
Although mobile money has become for financial transactions, the traditional banking sector in Ghana and Africa as a whole is still very profitable. Since the epidemic, the banks in Ghana have Registered growth with Return after deducting taxes on stocks (ROE) that exceeds the global average.
However, these profits depend greatly on the fees, while incompetence such as high operational costs, the wide papers of the character, and long flight times have left millions.
Today, less than 10 % of companies in Africa have access to credit, and more than 60 % of adults lack official financial services, each World Bank data. This growing gap has fueled the demand for digital banking alternatives such as rapprochement, which provides a cheaper and more comprehensive model.
Affinity has risen on more than 50,000 customers since its launch last October, its founder and CEO Tarek Mougaine He says. It is worth noting that 65 % of its users have never reached formal banking products before, and more than 60 % of women working in the informal sector.
Why did it take a long time so that you can get such a traction in Ghana? The country’s strict banking regulations play a big role. Unlike neighboring Nigeria, Where digital banks can work easily with microfinance licensesSuch licenses are rare and expensive and take time to reach Ghana, making it difficult for Fintechs to enter the space.
“Ghana’s organizer focuses on consumer protection, especially in deposit deposit institutions,” Mugain told Techcrunch. “We had to prove strong risk management and breach even as a microfinance institution, and our mission is compatible with the government’s goal of banking services. What ultimately convinced them is how to reduce our digital platform for friction and reduce banking costs for individuals and small, small and medium enterprises (MSMES).”
From investment banking services to disrupting technology
Mugain, who comes from a family of Ghanaian origin of Lebanese origin, studied in the United Kingdom, and obtained a Bachelor’s and Master’s degree before launching his career in academic circles and financing. He later worked as Man Group, a $ 160 billion global investment fund. There, he worked on the subscriptions of the main subscriptions, including the visa and cruise, and the largest microfinance institution in Latin America.
After returning to Ghana ten years ago, Mougaine looked at the solution to the financial inclusion problem of Africa, a challenge that is often highlighted in global advisory reports.
“Figures are still like the 331 billion credit gaps in Africa are still being transferred today,” he said. “Nothing has really changed. It made me obsessed with building a full retail banking bank for the bushes, similar to what Santander, Lloyd, or Chis Bank in Europe and the United States-but it is specially designed for the majority of Africa.”
He and a group of friends and family raised two million dollars to acquire the Microfinance Bank in 2020. They included money from selling his house in London. The entity, which obtained a license and savings and loans, was the first of its kind granted in more than 10 years, as a test land for its current banking solutions.
By 2022, Affinity raised an additional $ 3 million in the pre -seed tour to upgrade this license. Months of the ghost test, Fintech officially launched its application last October after obtaining approval from Ghana Bank, Appx Bank in the country.
The Ghanaian Fintech serves both individuals and exact institutions, which cannot be often unidentified in Africa. Customers get free savings and ongoing accounts without the limits of transactions, and the platform immediately begins users to register credit based on the record of their transactions.
After a few months of use, convergence extends credit lines with monthly interest rates of 3-7 %. Fintech has spent more than $ 15 million in loans across various products, with instant loans growing by 30 % per month and a non -general loan rate (NPL) of 3 %.
Hybrid approach: Digital banking services with a material touch
Customers can also access other banking services, including savings, payments, investments and transfers to banks and mobile money portfolios. Last month, 89 % of deposit flows, which have grown by 54 % month since its launch, came from mobile money, with the remaining 11 % of bank transfers.
Loans represent more than 90 % of Affinity revenues, with the remaining 10 % of fees and commissions on services such as utility bills and Internet payments via USSD and mobile phone application. Its revenues have increased by 37 % months over the past six months, according to Mugain.
Like many digital banks in Africa, rapprochement Mix online banking services with touch points in non -communication mode Through the agent network. These agents, about 30 of them, meet with small companies personally, on board on the application, and help bridge the confidence gap for digital bank users for the first time.
Of the 50,000 of its customers, 26,000 joined the agency network, and 24,000 registrations using the mobile phone application. It is worth noting that 55 % of the clients gained from agents have moved to the application, which indicates a strong digital dependence after stopping.
“We have prompted this shift to rethinking our agency – focusing on the use of agents for primary education, initial education, and driving digital literacy to encourage the adoption of the application. We are excited to improve the hybrid growth approach as it expands its scope.”
The $ 8 million Affinity seed tour led Grazia Equity (Germany) (Germany) and supported VC (London), which represents the first African investment. Among the other investors are Enza Capital, Africa launch, RenefT Capital, Finca International, Attijariwafa Ventures, and Impact Assets, and joins Eldon Capital early in a early hand.
“In the forefront, we are the first founder, and we were unable to think about a better person to build the local bank in Africa than Tarek,” said André de Hece, founder and administrative partner at the defendant. “He began his career in investing in banks through the 2008 financial crisis, and he became an expert in organization and strategy, and he built global -level banking programs for the rapprochement of a thousand to Z. I pushed his ability to communicate with customers and understand their impressive early user numbers.”
