The Rise of Affinity Africa: Ghana’s Upstart Digital Banking Platform
Africa’s digital banking landscape is dominated by high-growth markets like Nigeria, South Africa, and Egypt. However, Ghana-based startup Affinity Africa is making waves in the industry, with a recent $8 million seed funding round to expand its financial products across the country. In a region where mobile money reigns supreme, Affinity is carving out a niche for itself by offering affordable and inclusive banking solutions.
Despite the prevalence of mobile money, traditional banking in Ghana remains profitable, with banks reporting growth and above-average returns on equity. However, the sector faces challenges such as high fees, operational inefficiencies, and limited access to credit for businesses. This has created a demand for digital banking alternatives that cater to the underserved population.
Since its launch last October, Affinity has onboarded over 50,000 customers, with a significant portion being first-time users of formal banking services. The platform has particularly resonated with women working in the informal sector, highlighting its commitment to financial inclusion.
From Investment Banking to Fintech Disruptor
Founder and CEO Tarek Mouganie brings a wealth of experience to Affinity Africa, having worked in academia and finance before venturing into the fintech space. His vision of creating a retail bank tailored for Africa’s majority has driven the company’s growth and success.
After acquiring a microfinance bank in 2020 and raising $2 million in funding, Affinity has steadily expanded its offerings. The platform provides free savings and current accounts with no transaction limits, along with credit-scoring based on users’ transaction history. This approach has allowed Affinity to disburse over $15 million in loans, with a low non-performing loan rate.
A Hybrid Approach: Digital Banking with a Physical Touch
Affinity’s revenue model is primarily driven by loans, with additional income from fees and commissions on various services. The platform offers a range of banking services, including savings, payments, investments, and transfers, catering to both individuals and micro-enterprises.
One of Affinity’s unique strategies is its use of agent networks to facilitate in-person onboarding and support for customers. This hybrid approach has proven successful, with a significant number of customers transitioning from agent-acquired to app-based services.
The recent $8 million seed funding round led by European VC firms underscores the confidence in Affinity Africa’s potential for growth and impact. With a strong focus on customer-centricity and financial inclusion, Affinity is poised to disrupt the digital banking landscape in Ghana and beyond.
