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Issue 106
Sep 06 - Sep 13, 2021

Hi there,

I hope you're having a good week

We launched our Storefront product last year to help African creators sell physical and digital products online and since it's nearing the ember months we are hosting a refresher to help you get set for that end of year sales rush!

Whether you’re new to Paystack and want to learn more about Storefront or you’ve used Paystack for a while or you have friends/vendors that could benefit from this, please join the fun and sign up for the webinar. It’s taking place this today at 6pm WAT.

Enjoy the rest of your week!

Simileoluwa Afolabi-Jombo
Product Specialists, Paystack
NigeriaFlutterwave announces a new mobile money partnership with MTN across Africa. This partnership will allow the payments company to offer MTN Mobile Money as a payment method to its customers in five African countries: Cameroon, Côte d’Ivoire, Rwanda, Uganda, and Zambia. The Flutterwave Blog

MTN, Africa's largest telecommunications provider, currently operates in several African countries, including Benin, Cameroon, Cote d'Ivoire, Ghana, Nigeria, Rwanda, and South Africa. This partnership is valuable to fintech companies that choose to partner with them as they can now expand quickly across multiple countries. It's however surprising that Ghana was not listed in this partnership as MTN's MoMo has a huge mobile money penetration in the country.
KenyaM-Pesa hits 50 Million active users in Africa. Safaricom's mobile money platform, M-Pesa, has hit 50 million active customers in Africa, making it one of the continent's largest fintech companies. This announcement comes just 18 months after Safaricom and Vodacom launched the M-Pesa Africa Joint Venture, giving both companies full control of the M-Pesa brand. Mobile Money Africa

Given the huge monopoly M-Pesa has on the East African market, this news does not come as a surprise. M-Pesa is currently available in Kenya and other countries. The mobile money operator also has a wide agent network with more than 430,000 agent outlets.
TwitterBuilding a cashless Africa. On the heels of Wave’s $200m fundraise, Everett Randle, a partner in Foundersfund (Wave investor) provides a deep dive into why Wave is building in Senegal and Côte d'Ivoire.
SenegalWave closes $200 Million Series A round. The U.S. and Senegal-based mobile money provider, Wave, closed a Series A funding round led by Sequoia Heritage, Founders Fund, payment giant Stripe, Ribbit Capital, and other existing investors. With this investment, Wave plans to expand its presence in Senegal and Côte d’Ivoire, expand into other markets like Uganda and Mali and also grow its team. TechCrunch

This funding is currently the largest seed funding to be raised by an African francophone fintech. Wave spun off from Sendwave, a remittance company that was acquired by WorldRemit last year for $500m. The startup launched in Senegal in 2018 and had to compete with Orange, the biggest mobile money provider in the market. They have since disrupted the market through reduced transaction fees and better customer experience.

To match the competition, Orange decided to lower its bill payment fees to 1% in June 2021 and also stopped users from purchasing Orange airtime via Wave’s mobile application. This move was called anti-competitive by Wave and the dispute between both parties is being currently handled by Senegal’s telecoms regulator - Regulatory Authority for Telecommunications and Posts (ARTP).
EgyptEgyptian fintech startup MNT-Halan raises $120m funding round from global investors. The investment – which is the largest single round ever secured by an Egyptian tech startup, was led by Apis Growth Fund II, Development Partners International (DPI), and Lorax Capital Partners, and also features Middle East Venture Partners, Endeavor Catalyst, and Disruptech. MNT-Halan will use the funding to further develop its technology and move into overseas markets. Disrupt Africa

MNT-Halan started out as a ride-hailing app for two- and three-wheeler vehicles back in 2018. The startup has morphed into a super app of sorts providing lending and payment processing services amongst others.
KenyaKenya’s Pezesha secures a seven-figure seed extension round for African expansion. Pezesha, a digital lending startup had previously raised seed investment in 2018 from Consonance and is currently operational in Kenya, Ghana, and Nigeria. This round was led by GreenHouse Capital, and also includes on-lending liquidity support from GreenHouse Capital’s sister company Venture Garden Group. The funding will support the startup's African expansion and offer more services to its customers. Disrupt Africa

Seed extensions are additional funds raised by startup founders from new participants within a particular seed round especially if they believe they've been undervalued in the initial round.
NigeriaProspa gets $3.8 million pre-seed to accelerate growth. The Nigerian fintech startup which provides banking and software services for businesses, Prospa, has closed a $3.8 million pre-seed funding round to help it accelerate customer acquisition, expand its team and further develop its product suite. The round was backed by Global Founders Capital (GFC) and Liquid 2 Ventures. Prospa took part in the Y Combinator accelerator earlier this year and raised $125,000 to help launch operations. TechCrunch
EgyptKashat Raises $1.75m bridge funding round. Kashat, a microloan solutions provider, has raised $1.75 million in its newest round of funding led by Pan-African fund Launch Africa. The startup intends to use the funding to grow its platform, as well as expand its operations. Afrikan Heroes
Banking & Finance
NigeriaAccess Bank gains N5 billion from digital lending in the first six months of 2021. According to an audited half-year result released by the bank, digital lending revenue increased by 400% from N1 billion in the first half of 2019 to N5 billion in the first half of 2021. Nairametrics

In recent times, legacy banks have been expanding their lending services to retail consumers by going digital. It is very impressive to see a traditional bank doing such impressive numbers despite having a late head start compared with other fintech digital lending businesses like Carbon. But I'm quite positive about the future of the digital lending arm of traditional banks, seeing some of the strategic advantages that these banks have in terms of the low cost of capital, access to data for better underwriting, and more debit options, etc.

It is also interesting to note that the Former COO of Carbon, one of Nigeria's biggest digital lenders, Emeka Mordi is now head of the Digital Lending Division at Access Bank and they are reportedly working on a Digital Lending Subsidiary.
EthiopiaEthio Telecom launches a remittance and lending product via Telebirr. Ethiopia’s national telecommunications company has disclosed that it is planning to deploy an international remittance service system via its mobile money service, Telebirr, very soon. Their application for an operating license has been presented to the National Bank of Ethiopia (NBE) and they expect it to be approved. Afrikan Heroes

Despite being the second-most populous country in Africa with a population of more than 109 million, only about 34% of Ethiopian adults have bank accounts, compared to Kenya with over 82%. Ethiopia’s low rate of mobile money usage could be attributed to the rigid regulatory walls that have ensured monopoly and lack of innovation. In October 2020, after series of negotiations and deliberations, the National Bank of Ethiopia (NBE), was finally granted a license to Ethio Telecom, to start a mobile money service in the country. This partnership gives the telco a head start on the Safaricom-led consortium in the African mobile money sector as Telebirr is reported to have over 1 million users.
CameroonCameroon proposes new tax law to help increase digital payments. According to a circular signed on August 30th by Cameroon's President, the country is preparing a new monetary policy targeted at discouraging cash transactions to intensify the fight against tax evasion and fraud. Afrikan Heroes

Cameroon appears to be following Gabon’s lead where cash withdrawals of 5 million FCFA are subject to a 2% tax or a 100,000 FCFA tax. But unlike Gabon, the implementation of such a tax could be hindered by several factors, one of them being that the informal sector in Cameroon accounts for 90% of the country’s GDP, and the banking rate is at 12%, which means that majority of the operators conduct their transactions through cash, and this could severely impact spending power for a lot of the citizens who will have to bear these charges. 
UgandaUganda announces a crackdown on illegal micro-lenders. The Uganda Microfinance Regulatory Authority (UMRA) has started investigating Tier 4 Microfinance institutions and money lenders that are either not registered with UMRA or are violating licensing terms. This came after persistent fraud and high-interest rates claims against some of these lenders.

Tier 4 Microfinance institutions in Uganda consist of non-deposit-taking and community-based microfinance institutions. Currently, these institutions are allowed to set their own interest rates, unless the regulator steps in to decide the maximum interest rate which a money lender is to charge. For this reason, money lenders are charging rates which the regulator admits are exorbitant. 

In the past, companies undertaking money lending businesses were licensed by magistrate courts under the Money Lending Act, 1952. In 2016, the Tier 4 Microfinance Institutions and Money Lenders Act 2016 was made and operationalized by the Tier 4 Microfinance and Money Lenders (Money Lenders) Regulations, 2018. However, some of these companies have not gotten the new license and are operating illegally.
South AfricaSouth Africa launches cross-border digital currency project. The South African Reserve Bank (SARB) in collaboration with the central banks of Australia, Malaysia, and Singapore launched a new cross-border digital currency project called Project Dunbar aimed at evaluating the usage of central bank digital currency (CBDC) for international settlements. The CBDC will be tested to see if it can make transaction settlements cheaper and easier. Afrikan Heroes

This comes at an interesting time when many governments and central banks around the world are exploring the use of digital currency. This project is led by the Bank for International Settlements Innovation Hub which interestingly is also leading the initiative which is exploring using CBDCs for cross border payments involving central banks from China, Hong Kong, Thailand, and the UAE, and they will develop a model for shared platforms that will enable international settlements with digital currencies issued by multiple central banks.
El SavadorEl-Salvador becomes the first country to adopt bitcoin as legal tender. Three months after the bill was approved by the country’s legislature, bitcoin is now officially a legal tender in El Salvador. Up until now, USD has been the only legal tender in the country, as they didn't have their own currency, but now there is BTC. Under the law, bitcoin must be accepted by firms when offered as payment for goods and services. El Salvador has also created Chivo, its own state-backed crypto wallet that would be compatible with the new ATMs and would be interoperable with existing crypto wallets. Nairametrics

The passing of the law has had significant pushback from international bodies such as the International Monetary Fund (IMF) and the World Bank. There has also been pushback from the citizens with hundreds of citizens coming out to protest the new law. Despite much criticism, many in the cryptocurrency community are excited that a nation is adopting bitcoin as a legal tender.
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