While most African digital lenders depends on the fuel -based movement capital, Money It has quietly made what few others have: lending billions of Egyptian pounds with almost no debt or balance sheet report.
Now, after the $ 13 million increase in a pre-seed C round, led by Al Mada Ventures and the DPI’s NClude, Cairo-based Fintech, Fintech, based in Cairo, says it is ready to shift from steady growth to the regional expansion.
The round, which also drew its participation from Pardch Africa and Commerzventures, brings the company’s total funding to just over $ 60 million.
Founder and CEO Ahmet Wadi He notes that, unlike Fintechs that burn through cash on a scale, the start has maintained Lean functions while digitizing one of the oldest financial systems in the world: rotating savings and credit union (Rosca).
“We have managed to break this model and get to profitability,” Wadi said. “Doing this, while giving billions without being based on motion funds at all, is quite annoying in itself.”
Roscas are unofficial savings groups where a fixed number of participants regularly contributes to a common group, which pays to one member per cycle. Common in all emerging markets, they go with different names: esusu or ajo in Nigeria, Kameti or Chit Fund in India and Gam’ya in Egypt.
Here is how factory: Say ten people who contribute $ 1,000 a month. Each month, a person receives full $ 10,000. The cycle is repeated until everyone gets a payment. While these groups work best in reliable circles, their off -connection limits access and scalability.
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Moneyfellows, launched in 2016, digitizes this model by opening access to a wider group of users across the country. Through its application, anyone can form or participate in Rosca or “circles”. Similar models exist worldwide with Pakistan’s Oraan and the UK boat.
Instead of acting as a lender, MoneyFellows matches savings (usually last on the line) and borrowers (usually first in line) using behavior data, credit ratings and income levels.
This approach allows it to escalate without borrowing from its balance sheet. The company only passes when a Rosca Group has a unbelievable reception, according to Wadi.
“If we run 10 people each and find only nine members for some, we are moving forward to finance the missing,” explains Wadi, who examined the Rosca model in Germany and the United Kingdom before starting in Egypt. “Instead of canceling the team. We are funding a reception, which activates and generates revenue from the rest of the nine.”
In a standard borrowing business, a company must borrow money from banks or other financial institutions to lend it, most of the time it causes interest costs and the risk of default.
However, in the case of MoneyFellows, the risk and funding are distributed to all users, maintaining the rate of Rosca weaknesses below 10%. Compared, buy now, pay later (BNPL) providers and digital lenders often have full exposure to traffic funds in their loan books.
“Today, only 7-8% of slots in active Roscas require us to enter the movement capital,” Wadi notes.
This report may be low in percentage percentage, but as the money scale, they add. As a result, the company, which increased this funding as a bridge in a much larger round C series designed for the following year, is also in advanced discussions with local banks to secure capital in its efforts to develop its “circles” much faster.
Functional profitable and expansion outside of Egypt
Moneyfellows says it has reached profitability in Egypt, placing it between a small group of African newly established black businesses.
Since began in 2018, the platform has increased to over 8.5 million users, from 4.5 million in the latest milestone funding. The average payment per user has almost doubled in the last two and a half years, from 23,000 EGP ($ 453) to $ 45,000 EGP ($ 906), with a strong adoption between higher income.
“This model is of course viral,” Wadi said of the development of starting. “If you digitize the experience for two members of a Rosca offline, they often bring the other eight with them. This type of organic development is difficult to win.” Competitive lending rates, he adds, also helped to accelerate adoption.
Earlier this year, MoneyFellows launched a card product that allows users to receive payments, repay installments and spend on a trader network.
Eight -year -old Fintech also plans to introduce investment, payroll, insurance and remittance products below the line, moving to make money in competition with other Egyptian digital banks such as Lucky, Khazna and Telda.
His next test will reproduce its success beyond Egypt, an ambition of Wadi that first expressed in 2022. He admits that the expansion was needed more than expected due to the complexity of the model, which the company chose to improve before the regional.
Roscas digitization is not as simple as starting a savings or loan product. According to him, the process involves building composition machines to match users with the right sockets, balance thousands of real -time cycles and minimize the risk of default and abandonment, while maintaining users’ confidence.
“The crack of the model needed more than we thought,” Wadi observed. “But it was worth the time.
After nearly a decade that refines its model in one of Africa’s largest markets, working with over 350 local and regional entities and facilitating more than $ 50 million in investment, Moneyfellows is planning to start in Morocco by the end of the year.
Morocco offers well -known territory: a large population, a strong informal savings culture (known locally as a Daret) and a regulated environment. Moneyfellows also bets that events such as the 2030 World Cup will accelerate digital adoption in the country.
The company also monitors other markets in Africa and South Asia with similar dynamics. However, the introduction of more different markets will test the model’s adaptability to areas where informal funding is less culturally relative or official banking is more established.
“Rosca (Rostating Savings and Credit Association) is very old financial arrangements, with the roots returning hundreds, if not thousands of years,” said Omar Laalej, chief executive of Al Mada Ventures. “AMV was impressed by the modernized version of this business that the Fellows Money was able to build, affecting positive thousands of families in Egypt.”
