Egypt-based fintech company MoneyFellows has scored $13 million in a pre-Series C funding round to make its entrance into regional markets and digitize the traditional group saving system. The funding round was led by Al Mada Ventures from Casablanca along with a Casablanca backed fund called Nclude that is funded by Investment Partners International (DPI). Partech Africa and CommerzVentures, who also returned as investors, took part in the round which now marks that MoneyFellows has received over $60 million from its date of birth.
MoneyFellows is a digital platform that was founded in 2016 by Ahmed Wadi and reimagines the Rotating Saving and Credit Association (ROSCA) model commonly known locally in Egypt as “gameya”. It is a centuries’ old two-coin savings practice where a large body of people pool their money, to give in total to one of them in the group on a rotational basis, usually at agreed times. Until recent years, the traditional system that has been informal and based on trust, was central to the way many communities which have not had access to traditional banking services conducted their financial affairs.
This process has been successfully digitized by MoneyFellows, which is secure, transparent and scalable. Behavioural data and the highest standard of credit scoring are used to vet users and assign them to trusted digital savings groups using the behaviour data and the highest standard of credit scoring. With gameyas, users can join or form digital ‘gameyas’ and automate payments and collections while providing financial products, such as credit assessments, budgeting tools or financial education. In particular, it offers the unbanked and underbanked people a way to gain access to structured credit and savings products.
Currently boasting a customer base of over 8.5 million and a product turning profitable in Egypt, MoneyFellows is in a position to continue regional expansion to Morocco later this year. Morocco has a similar informal financial culture than the company based in Washington DC, as well as a great proportion of the population remains outside the formal banking sector which are a given.
Moreover, the average payout per user on the platform has also significantly increased from about 23 000 Egyptian pounds (EGP) (~$453) per user to around 45 000 EGP (~$906) per user in the past 2.5 years. The trend shows a much more engaged and affluent user base gaining confidence.
As MoneyFellows CEO and founder Ahmed Wadi puts it, the company’s mission work is mission driven.
“We want the users to have fair, accessible and innovative financial tools.” “It’s not only a validation of our progress, but also a step forward in scaling our impact across Africa and South Asia.”
The company will go further into markets in Africa and South Asia over the next few years, specifically into regions of strong informal savings culture, but little financial infrastructure. The team believes the marriage of traditional methods of financial lending with modern fintech is a chance to assist underserved populations in their financial uplift.
