Ghanaian affinity bags Fintech $ 8 million to scale digital banks in a money -focused mobile market

The best digital banking platforms in Africa generally come from high growth and populated markets such as Nigeria, South Africa and Egypt. But Africa AffinilationAn upstart in Ghana wants to join the conversation. The startup has raised $ 8 million in seed financing to extend its financial products across the country, where mobile money is the dominant financial tool.

While mobile money has become the choice for financial transactions, the traditional banking sector in Ghana and Africa as a whole remains very profitable. From the pandemic, banks in Ghana have Growth recorded with a Environmental return on equity tax (Roe) which exceeds the global average.

However, these profits are strongly based on the costs, while ineffectiveness such as high operational costs, in -depth documents and long integration times have left millions of people who are un served.

Today, less than 10% of African companies have access to credit and more than 60% of adults lack formal financial services, per World Bank data. This growing difference has fueled the demand for digital banking alternatives like Affinity, which offer a cheaper and more inclusive model.

Affinity has integrated more than 50,000 customers since its launch last October, its founder and CEO MAUGNA Tarek said. In particular, 65% of its users had never accessed formal banking products before, and more than 60% are women working in the informal sector.

So why did he take so much time for a digital banking opinion to win such a traction in Ghana? Strict banking regulations in the country play a big role. Unlike neighboring Nigeria, where digital banks can easily work with microfinance licensesThese licenses are rare, expensive and take time to go to Ghana, which makes it difficult for Fintech to enter space.

“The Ghana regulator focuses on consumer protection, especially in deposit establishments,” Mouganie at Techcrunch told Mouganie. “We had to prove a strong risk management, to break even as a microfinance establishment and align our mission to the government’s objective of the non -banished. What finally convinced them is how our digital platform reduces friction and reduces banking costs for individuals and micro, small and medium-sized businesses (MSME) ”

From investment bank to Fintech disruptor

Mouganie, who comes from a fourth generation Ghanaian family of Lebanese origin, studied in the United Kingdom, winning a baccalaureate and a doctorate before launching their career in the academic world and finance. He then worked as a director at Man Group, a global investment fund of $ 160 billion. There, he worked on major IPOs, including Visa and Compartamos, the largest microfinance institution in Latin America.

After his return to Ghana ten years ago, Mouganie sought to solve the problem of financial inclusion of Africa, a challenge often highlighted in global consultancy reports.

“Figures such as the credit gap of $ 331 billion in Africa are still being issued today,” he said. “Nothing has really changed. This obsessed me with the construction of a full -fledged retail bank for MPMEs, similar to what Santander, Lloyds or Chase Bank offer in Europe and the United States – but adapted to the majority of the Africa. »»

He and a group of friends and family raised $ 2 million to acquire a microfinance bank in 2020. They included funds from the sale of his London house, he said. The entity, which has received a savings and loans permit, the first of its kind to over 10 years, served as a test field for its current banking solutions.

By 2022, Affinity collected an additional $ 3 million in a pre-series tour to upgrade this license. After months of stealth tests, the Fintech officially launched its application last October after receiving approval from the Bank of Ghana, the Apex Bank of the country.

Ghanaian fintech serves both individuals and micro-enterprises, which are often indistinguishable in Africa. Customers get free savings and current transaction limits, and the platform immediately starts credit scores according to their transaction history.

After a few months of use, affinity extends credit lines with monthly interest rates from 3 to 7%. The fintech based at the ACCRA has disbursed more than $ 15 million in loans on various products, with instant loans increasing by 30% per month and an unproffed loan rate (NPL) by 3%.

A hybrid approach: digital bank with a physical touch

Customers can also access other banking services, including savings, payments, investments and transfers to banks and mobile silver wallets. Last month, 89% of deposit entries, which increased by 54% per month since its launch, came from mobile monetary recharges, the remaining 11% of bank transfers.

Loans represent more than 90% of affinity income, the remaining 10% from costs and commissions on services such as public service bill and Internet payments via USSD and mobile application. His income has increased by 37% per month in the past six months, according to Mouganie.

Like many digital banks in Africa, affinity Mix online banking services with offline contact points via its agent network. These agents, around 30 of them, meet small businesses in person, on board the application and help to fill the confidence gap for new users of the digital bank.

Of its 50,000 customers, 26,000 joined the agency network and 24,000 have registered using the mobile application. In particular, 55% of the agents’ acquired customers have gone to the application, showing a strong digital adoption after integration.

“This change has led us to rethink our agency strategy – focus on the use of agents for integration, initial education and conducting digital literacy to encourage the adoption of applications. We are delighted to refine this hybrid growth approach as we evolve, ”said Mouganie.

The 8 million dollars of affinity seeds was led by European venture capital companies Grazia Equity (Germany) and supported by VC (London), marking their first African investment. Other investors include Enza Capital, Launch Africa, Renew Capital, Finca International, Attijariwafa Ventures, Impact Assets, joining Eldon Capital a first donor.

“In Saperded, we are the founder-premier, and we could not think of a better person to build the local bank of Africa than Tarek,” said Andre de Haes, founder and managing partner at Backed. “He began his career to invest in banks thanks to the 2008 financial crisis, has become a regulatory and strategy expert and built a world -class banking software stack for affinity from zero. Its ability to connect and understand customers has led impressive early user numbers. »»