MFS Africa to expand into Nigeria

In June when MFS Africa raised a Series C extension, the fintech company disclosed that it will expand into Nigeria as part of its pan-African expansion plan.

MFS Africa to expand into Nigeria
Dare Okoudjou, Founder and CEO of MFS Africa

Despite progress in recent years, formal financial services remain beyond the reach of many people in Africa. And, even when these services become available, the rate of usage is low because of a range of factors, including the costs and the security of transacting.

It has been shown that mobile money and other non-traditional forms of financial services are key enablers for financial inclusion in Africa - they have disrupted traditional financial services by providing better ways to transfer funds than using cash. With mobile and other digital payment systems, customers in Sub-Saharan Africa are gaining access to business loans, savings, and other services that a traditional bank would otherwise provide. The greater availability of financial services has an incredible impact on many aspects of life in Africa and plays a role in alleviating poverty for communities.

One player in the omnichannel payment field helping to make the sort of impact that the continent needs is MFS Africa. It is arguably largest hub for omnichannel payments in Africa, which connects over 400 million mobile money users on the continent. Impacting largely the unbanked and the underbanked demographic on the continent, MFS Africa connects mobile network operators, money transfer organisations, cross-border payments remittance firms, financial service providers, and worldwide merchants to millions of mobile wallets on the continent.

"Our services focus on creating more possibilities for Africans needing to make payments, to carry out money transfers, and to remit funds to others,” explains Dare Okoudjou, Founder and CEO of MFS Africa. "Merchants, banks, mobile operators, and mobile money transfer firms have come to rely on our compliant and cost-effective service, and this is why the MFS Africa network has grown so extensively across the continent of Africa."

MFS Africa has achieved a significant presence in Sub-Saharan Africa, being connected today to over 60% of all mobile money wallets in the region. Understanding the need for connecting mobile money to the rest of the world, MFS Africa recently broadened its bank and fintech base offering through the acquisition of US fintech GTP.

This will enable the company to tokenize mobile money space and connect to traditional card scheme ecosystems such VISA and Mastercard. Okoudjou explains that, "Our guiding principle is that African consumers and businesses should be able to pay for anything, both offline and online. We've always known that in order to really eliminate borders, we needed to connect mobile money to the rest of the world; card networks seem to be the most effective means to do so.”

The firm works in over 35 countries in Africa but believes that there are still more areas that it can provide its services to. It is against this background that MFS Africa negotiated a deal for additional funding from Norsad Capital, an impact investor offering tailor-made debt solutions to mid-market growth companies in Sub-Saharan Africa.

Kenny Nwosu, CEO at Norsad Capital, says: "The Norsad Capital term facility will assist MFS Africa to break into Nigeria, a market that is key to MFS Africa’s growth strategy. With its extensive population and capacity to do business, Nigeria accounts for the largest movement of money around the continent, and our funding is important as it comes at a point in the company’s development where it is poised for significant growth.”

According to Nwosu, “This is a very attractive investment for Norsad as MFS Africa has a strong market position, and this market share puts MFS Africa in a position to be at the forefront of financial inclusion and digital payments in Africa.”

There is also great synergy between the two service providers since MFS Africa is aligned with Norsad’s Purpose of Building a Better Africa. As Okoudjou of MFS Africa explains: "MFS aims to decrease the cost of money remittances to Africa. We currently connect mobile money systems to one another and to money transfer organisations, banks, and other financial institutions, enabling money remittances to and from mobile money accounts. Our move into the Nigerian market will allow us to extend our footprint extensively on the African continent, bringing much-needed financial services to thousands more people."

In line with Norsad impact objectives, MFS Africa is aligned to Norsad’s Purpose of Building a better Africa. Mobile money has disrupted traditional financial services by providing a better way to transfer funds instead of cash. With mobile payments, customers in Sub-Saharan Africa are gaining access to business loans, savings, and other services as they would get in a bank. Mobile money has an incredible impact on many aspects of life in Africa and plays a role in alleviating poverty for communities.

Recall that, in April, MFS Africa completed its acquisition of Nigerian super-agent Capricorn Digital Limited, Baxi's parent company, following approval of the transaction by the Central Bank of Nigeria. The company has reportedly acquired two key payment licences (PDF)—PSSP, and PTSP—in Nigeria.

Later in June, MFS raised a Series C extension round of $100 million comprising both equity and debt financing. This extension round brings its total Series C to $200 million. According to TechCrunch, they connect 320 million mobile money wallets across 35+ African countries and 700 corridors.