While most African digital lenders depend on working capital to supply growth, Moneyfellows I did quietly have a few others: add billions of Egyptian pounds with no debts or exposure of the public budget.
Now, after collecting $ 13 million in the pre -series C. Casablanca and NCONDE’s DPI, Cairo -based FinTec says it is ready to shift from fixed growth to regional expansion.
The tour, which also attracted participation from PARTECH Africa and Commerzventures, up to the company’s total financing of more than $ 60 million.
Founder and CEO Ahmed Wadi It is noted that, unlike Fintechs that burn through criticism to the range, the startup company has kept meager while numbering one of the oldest financial systems in the world: the Rosa and Credit Association (Rosca).
Wadi said: “We were able to break this model and reach profitability.” “Do this while lending to billions without relying on working capital at all is annoying in itself.”
RosCas are informal savings groups where a fixed number of participants regularly contribute to a joint group, which is pushing for one member in the course. Related across emerging markets, they go with different names: Esusu, Ajo in Nigeria, Kameti, or Chit Fund in India, and GAM’Eya in Egypt.
Here is how He worksTen people, each of whom contribute $ 1,000 per month. Each month, one person receives $ 10,000. The course is repeated until everyone gets payments. While these groups work better within the reliable circles, their nature in non -communication mode limits access and expansion.
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Moneyfellows, which was launched in 2016, is making this model by opening access to a broader group of users throughout the country. By applying it, anyone can form or join Rosca or “circles” groups. There are similar models in the world with Pakistan Ura And the United Kingdom Stepladder.
Instead of working as a lender, the Moneyfellows match the savings (usually lasts in the line) and borrowers (usually first in the line) using behavioral data, credit grades, and income levels.
This approach allows expansion without lending to its public budget; The company only moves when the Rosca group has an uninterrupted opening, according to WADI.
“If we operate 10 people, and we find only nine members for some, we enter one missing financing,” explains Wadi, who tested the Roska model in Germany and the United Kingdom. “Instead of canceling the group, we fund one opening, which activates and activates the remaining nine.”
In typical lending, the company must borrow money from banks or other financial institutions to lend it, most often incurred interest and virtual risks.
However, in the case of Moneyfellows, risks and financing are spread across its users, while maintaining the percentage of non -full Rosca holes less than 10 %. By comparison, buy now, and subsequently pushed service providers (BNPL) and digital lenders often display the full -working capital to their loan books.
“Today, only 7-8 % of the openings in the active RosCas requires intervention with working capital,” Wadi notes.
This exposure may be low in terms of percentage, but with Moneyfellows scales, he adds. Consequently, the company, which collected this financing as a bridge for a much larger C series plan for the next year, in advanced discussions with local banks to secure the capital working in its attempt to develop its “departments” much faster.
Working in a profitable and expanding outside Egypt
Moneyfellows says it has reached profitability in Egypt, and put it among a small group of emerging companies in the African super -black technology.
Since its launch in 2018, the platform has grown to more than 8.5 million users, up from 4.5 million users The last financing teacher. The average payment for almost every user has doubled during the past two and a half years, from 23,000 pounds (453 dollars) to 45,000 pounds (906 dollars), with strong accreditation between the high -income sectors.
“This model is naturally virus,” said Wadi. “If you number the experiment to a member of two Roska in a non -communication mode, they often bring the eight others with them. It is difficult to overcome this organic growth.” He adds that competitive borrowing rates have also helped accelerate adoption.
Earlier this year, Moneyfellows has launched a card product that allows users to receive payments, payment of installments, and spend on a commercial network.
The eight -year -old Fintech also plans to provide investment products, salaries, insurance and transfers to the bottom of the line, and movements that put Moneyfellows in competition with other Egyptian digital banks such as Lucky, Khazna and Telda.
Its next test will be to repeat its success beyond Egypt, which is the ambition of Wadi to be expressed for the first time in 2022. It admits that the expansion took longer than expected due to the complexity of the model, which the company chose to polish it before the regional go.
RosCas digitization is not as clear as savings or loan products. According to him, the process includes building a recommendation engines to match users with the correct openings, buding thousands of circles in real time, and reducing virtual and leaking risks, all while maintaining the user’s confidence.
“It took the model to break the model longer than we thought,” Wadi note. “But it was worth time. Most of the attempts to expand the dignitaries of the Russians, even by banks and communications companies worldwide, failed because it reduced the complexity of the basic behavior.”
After nearly a decade, it improves its model in one of the largest Fintech markets in Africa, and the partnership with more than 350 local and regional entities and facilitates more than $ 50 million in investments, Moneyfellows plans to launch in Morocco by the end of the year, where it has obtained major partnerships and organizational approvals.
Morocco offers a familiar land: a large number of non -manufacturers, a strong informal savings culture (locally known as Daret), and a friendly environment for the regulator. Moneyfellows is also betting that events like the 2030 FIFA World Cup will accelerate the country’s digital adoption.
The company is also looking for other African and South Asia markets with similar dynamics. However, the introduction of more diverse markets will test the ability to adapt to the model in areas where informal financing is less culturally important or that official banking services are more firm.
Omar Lelge, Managing Director of the Mado Vetshers, said: “Roca (the association of savings and rotating credit) are very old financial arrangements, as its roots date back to hundreds, if not thousands of years.” “AMV admired the modern version of this work that the colleagues were able to build it, which positively affects thousands of families in Egypt.”
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