MAY 03, 2022
3 min Read
Investor Updates: May 3 2022
💰Pangea wants to connect African startups to diaspora funding
- Norway’s Pangea Trust, through its equity crowdfunding platform Connect, is unlocking diaspora remittance inflows as a funding source for early and growth-stage startups in Africa.
- Remittances to sub-Saharan Africa reached $45 billion last year, with Nigeria, Ghana, Kenya, Senegal, and Zimbabwe leading the list of recipient countries.
- And as annual inflows grow, Pangea’s country director and CEO for Kenya Anne Lawi told TechCrunch, that diaspora remittances can be tapped to increase the amount of funding injected into startups.
Startups in Africa raised between $4 billion to $6 billion in venture funding last year. While that’s a record tally, the amount remains meager in comparison to the rest of the world. More so, there’s still relatively limited capital available to early-stage startups on the continent. Innovative platform-first startups like Pangea and Bantaba are similar to daba, and aim to address this by connecting founders with the diaspora wealth through their respective digital infrastructures.
🇪🇬Egypt’s Khazna gets approval from Central Bank to launch its cards
- Khazna has obtained final approval from the Central Bank of Egypt (CBE) to roll out its Khazna Card in partnership with ADIB Egypt.
- Launched in 2020, Khazna offers a multi-product that caters to the 50% of Egyptians who are active smartphone users yet lack access to formal financial services. It currently offers general-purpose credit, buy now pay later (BNPL), and bill payment.
- The company last month closed a $38 million Series A round for its efforts to replace informal cash-driven alternatives across Egypt.
Source: Disrupt Africa
Digital banks have enormous potential in Egypt, a country where 2 of every 3 individuals are partly or totally excluded from formal financial services but 50% of its 100 million people actively use smartphones. In addition to high mobile and internet penetration, the North African country boasts a young and tech-savvy population with 61% below 30. Startups like Khazna have thus moved to capture this opportunity with neo banking platforms, contributing to the general booming fintech sector in Egypt.
🇳🇬Nigeria’s largest telcos get mobile money banking licenses
- Airtel Africa Plc and MTN Nigeria Communications Plc have in the past month received respective final approvals from the Central Bank of Nigeria to run payment service banks (PSBs).
- With the approval, both telecom operators—which have extensive experience operating mobile money across Africa—can provide virtually all the services offered by conventional commercial banks with the exception of granting credit and processing foreign exchange transactions.
- The final licenses follow previous approvals in principle granted in November 2021, to both Airtel Africa and MTN Nigeria, to operate PSBs in the country.
Despite being home to the largest unbanked population in Africa, Nigeria lags behind its peers when it comes to mobile money adoption, compared to countries like Ghana and Kenya, where leading telcos MTN and Safaricom, respectively, have driven exponential growth in penetration over the years. MTN and Airtel’s approval in Nigeria is thus expected to spur the adoption of mobile money in the country, and although it poses a significant threat to other fintech players, particularly agency banks, Nigerians stand to benefit from the proliferation of digital financial services.