The top -of -the -line platforms in Africa usually come from high increases, crowded markets such as Nigeria, South Africa and Egypt. But Affinity AfricaA start from Ghana, wants to participate in the conversation. The start has raised $ 8 million in seed funding to further expand its financial products across the country, where mobile money is the dominant financial tool.
While mobile money has become the Go-To for financial transactions, the traditional banking sector in Ghana and Africa as a whole remains particularly profitable. From the pandemic, the banks in Ghana have recorded growth with one return after tax on shares (ROE) that exceeds the global average.
However, these profits are largely based on pay, while ineffectiveness such as high operating costs, extensive bureaucracy and long -term embarkation have left millions of sub -service.
Today, less than 10% of businesses in Africa have access to credit and over 60% of adults do not have official financial services per per World Bank data. This growing gap has fueled the demand for alternatives to digital banks such as affinity, which offer a cheaper, more comprehensive model.
Affinity has boarded over 50,000 customers since its release last October, its founder and CEO and CEO of Tarek mouganie He says. Specifically, 65% of its users never had access to official banking products before and over 60% are women who work in the informal sector.
So why did it take so much for a digital banking to gain such attraction in Ghana? Strict banking regulations in the country play a big role. Unlike neighboring Nigeria, where digital banks can easily operate with microfinance licenses, such licenses are rare, expensive and take time to reach Ghana, making it difficult to enter the space.
“Ghana’s regulator focuses on consumer protection, especially on deposit institutions,” Mouganie told TechCrunch. “We had to prove strong risk management, even break up to be a microfinance institution, and align our mission with the government’s goal of pulling unbanked. What eventually convinced them was how our digital platform reduces friction and reduces the bank expenses for individuals and small, small and medium -sized businesses (Msmes.) “
From investment banking to Fintech disorder
Mouganie, who comes from a fourth generation of Ghanaian family of Lebanese descent, studied in the United Kingdom, winning a degree and a doctorate before starting his career in academia and funding. He later worked as a manager at the Man Group, a $ 160 billion World Investment Fund. There he worked in large public records, including Visa and Compartamos, the largest Latin American microfinance institution.
After returning to Ghana 10 years ago, Mouganie seemed to solve the problem of African’s economic integration, a challenge that was often underlined in world consulting reports.
“Numbers such as the African $ 331 billion credit gap are still reported today,” he said. “Nothing has really changed. This made me obsessive with a complete retail bank for MSME, similar to those offered by Santander, Lloyds or Chase Bank in Europe and the US-but adapted to the majority of Africa.”
He and a group of friends and family raised $ 2 million to obtain a microfinance bank in 2020. They included funds from the sale of London’s House, he claims. The entity, which received a license to save and loans, first of its kind of over 10 years, served as a test ground for its current banking solutions.
By 2022, Affinity increased an additional $ 3 million in a pre-seal to upgrade this license. After months of secrecy tests, Fintech officially began its implementation last October after receiving approval from Bank of Ghana, the country’s APEX bank.
The Ghanaian Fintech serves both individuals and micro -businesses, which are often not distinguished in Africa. Customers receive free savings and current accounts without trading limits and the platform immediately begins users based on their credit score based on their trading history.
After a few months of use, the affinity extends credit lines at monthly interest rates of 3% to 7%. Fintech -based Fintech has disbursed more than $ 15 million on loans on various products, with direct loans increasing by 30% monthly and a 3% NPL percentage (NPL).
A hybrid approach: Digital banking with natural touch
Customers can also have access to other banking services, including savings, payments, investment and transport from banks and mobile wallets. Last month, 89% of deposits, which have increased 54% of the month since its launch, came from mobile money conclusions, with the remaining 11% from bank transport.
Loans account for more than 90% of AFFINITY revenue, with the remaining 10% coming from remuneration and supplies for services such as the utility account and internet payments via USSD and mobile application. His revenue has increased by 37% a month in the month in the last six months, according to Mouganie.
Like many digital banks in Africa, affinity combines e -banking with offline contact points through its network. These agents, about 30 of them, meet the small businesses in person, board them in the application and help bridge the confidence gap for first users of digital banks.
Of its 50,000 customers, 26,000 participated in the Services Network and 24,000 signed the use of the mobile application. Specifically, 55% of customers acquired by the agent have turned into the implementation, showing strong digital adoption after boarding.
“This shift has led us to rethink our service strategy – focusing on the use of agents for boarding, initial training and driving digital literacy to encourage applications. We are excited to improve this hybrid development approach as we “, Mouganie said.
Affinity’s $ 8 million seed tour was driven by European VC Grazia Equity (Germany) and supported VC (London), marking their first African investment. Other investors include Enza Capital, African launch, Renew Capital, Finca International, Attijariwafa Ventures, Impactassets, Eldon Capital, an early supporter.
“In support, we are founding-up, and we could not think of a better person to build the local Bank of Africa by Tarek,” said Andre de Haes, a partner and associate manager. “He began his career investing in banks through the 2008 financial crisis. He became a specialist in regulation and strategy and has set up a global banking stack of software for affinity. His ability to connect and understand customers has led impressive Early user numbers. “
