It is possible to make payments, loans and invest with one click. This is a great thing in Africa.
The digital banking landscape in Africa is evolving as a result of the increasing number of neobanks.
The latest news from Africa indicates that institutional investors are investing a lot in this area of fintech.
Fintech startup Finclusion Group uses AI algorithms to provide financial services to African customers via a variety credit-centric products. It has secured $20 million in equity and pre-Series-A loan funding.
The round’s investors include Andela, Flutterwave cofounder Iyin Abodeji (who was funded through Future Africa’s VC firm), Christian Faes founder of LendInvest and Charlie Delingpole founder of ComplyAdvantage.
Just a few of the other notables are Jai Mahtani and Sudeep Ramnani (RCA Ventures), Jonathan Doerr, Richard Aseme, Klemens Hallmann, and Amandine Lobelle.
Alexander Schuetz and Manuel Koser were also investors in the company. Christian Angermayer and Leo Stiegeler were also among them.
Finclusion was able to receive debt financing from South Africa’s local currency funds, Eswatini, and South Africa. This made up the bulk of the total round.
This comes just a few months after Lendable, an emerging market lending provider, offered a $20 million loan facility.
The fintech company intends to expand its operations in South Africa and Eswatini.
According to Finclusion, the growth is one Finclusion’s goals. The firm claims that Finclusion aims “to promote financial inclusion within market sections that have traditionally been underserved by African, with a principal emphasis on southern and Eastern Africa.”
Since its inception in 2018, Finclusion has provided user-facing loans to help bridge the credit gap in countries where it operates.
SmartAdvance is a Finclusion solution that provides financial solutions to employees through employer relationships.
Employers can borrow against their paychecks, take deductions from their pay, or lend through their wage streaming product. This product offers future and payroll loans.
The fintech that focuses on Africa has so far granted loans totalling more than $300 million to over 240,000 customers.
In the past 18 months, monthly payments for Finclusion have increased 140 percent. Finclusion’s loan portfolio grew by 30% between December 2020 and December 2021.
Finclusion has only 28,000 active loan customers, which is nearly 10% of all users it has served since 2018.
There are many neobank platforms in Africa that offer the same services that traditional banks, but some have limited offerings and others that provide services that go beyond traditional banking services.
Neobanks, which are online-only financial institutions, are similar to banks. A neobank is often limited in its services, which is a stark contrast to traditional banks. Piggy is one example of a neobank that offers a basic checking account and savings account.
Neobanks are growing in Africa, and traditional banks are creating hoax brands to get into the market. This is good news because evolution banking is shaping the future.
Neobanks and other FinTechs are helping to further fragment the market. In the beginning, many businesses concentrated on providing a single product or service to customers.
Unfortunately, most of these neobanking platforms work only in the countries where they are located.
Kuda, for example, is only available to Nigerians and is not available to other African countries. Carbon, on the other hand, is only available in Nigeria, Kenya and Nigeria. FairMoney, however, is only available to Nigerians.
These investments have enabled Finclusion to expand its reach across Africa rather than just one country.
Following the example of other credit-first Neobanks, Finclusion has started to expand its offer.
The corporation also has an administrative headquarters in each market to oversee operations.
Finclusion claims it will soon open another one in West Africa after having opened one in Kenya and South Africa. It claims its employers are already present in these areas.