Affinity Africa, a burgeoning fintech company based in Ghana, has successfully secured $8 million in seed funding aimed at revolutionizing digital banking services in the West African nation. Since its launch last October, the company has swiftly onboarded over 50,000 customers, catering to individuals and micro-enterprises. This landmark funding will enable Affinity Africa to expand its range of financial products and deepen its reach across the country.
The fintech startup employs a hybrid growth strategy that marries online banking with offline touchpoints through its extensive agent network. This approach has proven effective, with 26,000 customers acquired via agents and an additional 24,000 signing up through the mobile application. Notably, 55% of those who initially joined through agents have transitioned to using the app, highlighting a robust adoption of digital platforms post-onboarding.
Loans constitute over 90% of Affinity Africa’s revenue stream, with the remainder generated from fees and commissions. The company has disbursed more than $15 million in loans across various products, witnessing a 30% month-over-month growth in instant loans alone. Impressively, Affinity Africa maintains a non-performing loan (NPL) rate of just 3%, underscoring its prudent risk management practices.
Moreover, Affinity Africa's customer base predominantly comprises women working within the informal sector. Over 60% of these users had never previously accessed formal banking products, marking a significant stride towards financial inclusion. Additionally, the company's revenue has surged by 37% month-over-month over the past six months, complemented by a 54% month-over-month rise in deposit inflows since its inception. A staggering 89% of these deposits stem from mobile money top-ups—a testament to the pervasive role of mobile money as a financial tool in Ghana.
The foundation of Affinity Africa’s operations rests on its unique savings and loans license, the first granted in over a decade. This pivotal license enables the company to offer a comprehensive suite of banking solutions tailored to the needs of Ghanaians.
“Numbers like Africa’s $331 billion credit gap are still being quoted today,” – Tarek Mouganie
Founder and CEO Tarek Mouganie brings a wealth of experience from academia and finance to Affinity Africa. His vision is to build a full-fledged retail bank for micro, small, and medium enterprises (MSMEs) akin to established global banks but customized for Africa’s majority.
“Nothing has really changed. That made me obsessed with building a full-fledged retail bank for MSMEs, similar to what Santander, Lloyds, or Chase Bank offer in Europe and the U.S.—but tailored for Africa’s majority.” – Tarek Mouganie
Ghana’s regulatory landscape is stringent, particularly concerning consumer protection within deposit-taking institutions. Mouganie emphasized that gaining regulatory approval required demonstrating robust risk management and financial sustainability as a microfinance institution while aligning with governmental goals to bank the unbanked.
“Ghana’s regulator is focused on protecting consumers, especially in deposit-taking institutions,” – Tarek Mouganie
“We had to prove strong risk management, break even as a microfinance institution, and align our mission with the government’s goal of banking the unbanked. What ultimately convinced them was how our digital platform reduces friction and lowers banking costs for individuals and micro, small and medium enterprises (MSMEs.)” – Tarek Mouganie
Affinity Africa's growth trajectory is fueled by the increasing demand for digital banking alternatives in Ghana. In a market dominated by mobile money, the company's innovative approach and robust technology stack have positioned it as a frontrunner in transforming the financial landscape.
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