Two African fintechs, MFS Africa and Frontclear have received $3.2 million in investments from FSD Africa Investments.
While MFS Africa, received a $1.2 million follow-on investment from FSD Africa Investments, to support the implementation of a new partnership with Visa which will have a significant improvement on last-mile consumers; Frontclear got $2 million to improve efficiencies and catalyse investment from the private sector.
Established in 2014, MFS Africa, which currently connects over 180 million mobile wallets in Sub-Saharan Africa, partners with banks, mobile operators and money transfer companies to transact across several platforms and operators including mobile money, e-commerce, peer-to-peer messaging platforms and money transfer.
It has offices in Mauritius, Accra, Cameroon, Nigeria and South Africa.
Frontclear was established in 2015 to build a more inclusive market by supporting interbank lending between domestic banks.
As of January 2020, Frontclear had mobilised USD$1 billion in interbank credit through the issuance of USD$590 million in guarantees. While active in emerging markets and developing countries around the world, 61% of Frontclear’s portfolio is in Africa, in countries including Ghana, Kenya, Nigeria, Tanzania, Zambia and Egypt.
Anne-Marie Chidzero, Chief Investment Officer, FSD Africa Investments, said: “MFS Africa and Frontclear are two firms that with the right support could have a transformative impact on Africa’s financial markets.
“MFS Africa has the potential to allow anyone on the continent with a mobile money account to send money aboard or buy something on Amazon. While Frontclear is helping banks across the continent access liquidity and knowledge and support to address barriers within the continent’s money market.
“By investing in these companies, we are giving them much-needed capital to drive change.”
Dare Okoudjou, Founder and CEO, MFS Africa, said: “MFS Africa’s vision, is to enable every African mobile user to transact freely with anyone, anywhere in the world focus on creating new digital pathways.
“This can only happen through investments and partnerships. Therefore, this investment will help MFS Africa’s capabilities to build a stronger payments service that will help strengthen Africa’s financial markets, whilst providing support for emerging SMEs across the continent.”
Hugh Friel, Vice President, Frontclear, said: “This investment will enable the Frontclear fund to have a more profitable and efficient capital structure allowing it to increase the number and volumes of interbank transactions that will contribute to the economic growth and financial stability of financial markets in Africa.”
FSD Africa Investments, the investment arm of FSD Africa, provides early-stage, risk-bearing capital to selected firms that can strengthen financial markets in Africa.
