Affinity Africa, a Ghana-based digital banking platform, raised seed funding to provide affordable and accessible financial services to underserved and unbanked individuals and micro, small, and medium enterprises (MSMEs).
The neobanking startup Affinity Africa has raised $8 million in an oversubscribed Seed Round led by Grazia Equity and BACKED VC. Other participants in the investment round include Attijariwafa Ventures, Impact Assets, Enza Capital, Launch Africa, Renew Capital, Finca International, and a group of VC angels.
The company, founded in 2022 by entrepreneur Tarek Mouganie and officially launched in October 2024, received more interest and offers from investors than anticipated, so the investment received exceeded the funding initially sought to raise.
Since the launch, the startup has rapidly grown. It has onboarded over 50,000 customers in Ghana, with 65% of users never previously having access to formal banking and over 60% being women in the informal sector. Affinity has raised a total of $13 million to date. It had three funding rounds before the Seed one. The list of Affinity’s backers includes Enza Capital, Launch Africa, Nour Nouf Ventures, and others. The startup also received some funding from a Visa accelerator program.
Affinity Africa focuses on boosting financial inclusion, especially for populations previously neglected by traditional banks. The platform’s cost-effective structure allows it to offer banking services with no monthly fees or transaction charges, making it one of the most affordable fintech players in the region.
The company uses a branchless model. Its digital banking services are powered by a mobile and web app, along with an agent network and proprietary technology. Affinity Africa offers basic banking services like personal and SME accounts, savings, payments, money transfers, investments, and loans. To bridge the financial inclusion gap even better, Affinity services are tailored to both digital natives and users with limited digital literacy. The startup operates on a legal basis, having received a Savings and Loans license from the Bank of Ghana as well as regulatory approval of its mobile app.
Affinity plans to use the fresh funding to deepen its reach in Ghana and also expand internationally, aiming to bridge the financial services gap across the continent.
The whole continent of Africa has relatively low financial inclusion compared to global averages. The rates may differ from country to country and from region to region. However, it is estimated that about 60% of adults in Africa still lack access to formal financial services. In Sub-Saharan Africa, only 55% of adults have an account, whereas 33% of the population owns a mobile account rather than access to traditional banking services.
With small businesses, the situation is even worse. The vast majority of African MSMEs lack access to traditional sources of credit, which they vitally need for growth. Retail banking assets represent about 33% of GDP in Africa, compared to the global average of around 70%.
In recent years, fintech solutions have brought some change to the continent’s financial landscape. For instance, in Tanzania, mobile money service usage contributed to a steady rise in formal financial inclusion – from 65% in 2017 to 76% in 2023. Many citizens in Kenya, South Africa, Morocco, Tanzania, Nigeria, Somalia, and Algeria have also adopted crypto due to the lack of traditional financial services infrastructure. Between July 2020 and June 2021, crypto adoption in Africa surged by over 1,200%.
