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Issue 138
Jun 27 - Jul 10, 2022

Hi there,

Two weeks ago, I told you that I was in Kigali, Rwanda, connecting with my colleagues and trying out Rwandan Cuisine. I have since returned to Lagos, but fell ill and couldn’t publish last week’s issue of the newsletter. The good news is that this week, you get a supersized newsletter issue of African fintech news in the last two weeks.

Enjoy the rest of the week!

Tochukwu Ironsi
Market Intelligence Specialist, Paystack
NigeriaAbeg rebrands to Pocket and obtains approval-in-principle for MMO license. Abeg, a Nigerian mobile payments app, has obtained an approval-in-principle (AIP) for a mobile money operator (MMO) license application from the Central Bank of Nigeria (CBN). The MMO license will allow Abeg - now Pocket - to compliantly provide mobile payments and wallet services to customers. TechCabal

PiggyVest has found great success with its core savings product acquiring millions of active users and billions of naira in assets. One of the ways that PiggyVest drives adoption is by reducing avenues for customers to spend money. With the exception of withdrawals, almost every user node on the PiggyVest app guides the customer to save or invest money.

But customers do withdraw their savings and investments. They spend that money on bills, loan repayments, general commerce, and more. Up until now, PiggyVest did not have much insight into or earn revenue from those customer expenses. Most of the value from customer payments accrued to banks and customer-preferred stores of value.

In addition, prevailing market conditions have led to a decline in the average return on investment securities, in Nigeria and globally. These macro events potentially affect the returns PiggyVest can earn and offer its customers. A bearish outlook on Nigeria's near-term economic future puts more pressure on PiggyVest's investments-led business model and begets a need to diversify income.

So a combination of both necessity and opportunity makes Pocket an interesting and crucial part of PiggyVest's future. PiggyVest has already done a lot of hard and good work in making users trust them with their savings. With Pocket, PiggyVest is looking to leverage brand equity and interface design to make existing users trust the fintech with their spending as well. If successful, Pocket will allow PiggyVest to earn non-interest revenue from customer payments. It will also grant PiggyVest/Pocket access to valuable insight into customer spending habits which can be used to build even more features such as loans and ad engines.

But PiggyVest's ambitions are even bigger than being a primary spending account: Pocket also offers a marketplace for customers and merchants to buy and sell goods and services, currently at zero commission. Pocket doesn't just want to be how you spend but also where you spend. At scale, Pocket could become an alternative payment rail at an almost zero marginal cost.

The increased focus on payment revenue is not unique to PiggyVest. In Issue 134, we wrote about Squad, a new merchant payments solution from GTCO. We have also frequently touched on the card issuing partnerships between mobile wallets and card networks. Across Africa, banks and fintechs are doubling down on non-interest income and looking to capture a piece of everyday consumer payments.

Success for PiggyVest and Pocket is dependent on tight and seamless integration between both apps. Digital payments are hard, but building a marketplace is probably much harder. In Nigeria, NIP-enabled instant payments have leveled the playing field. If the payment rails are a commodity then there is value in owning and connecting the terminals where the trains begin and end. 
AfricaFlocash partners with Visa for digital payments and commerce solutions. Flocash, a payments company operating in Africa and the Middle East, has partnered with Visa to launch new payments and commerce products. These new products, including an online store, tap-to-phone payments, and credit, will be targeted at SMEs in Africa. Paypers
KenyaMono expands to Kenya. Mono, a leading Nigerian-based open banking startup, has expanded into Kenya. The fintech which allows businesses to access consumers' financial data has launched with five initial financial institutions including M-PESA and Equity Bank. PYMNTS
South AfricaKyanda expands into South Africa. Kyanda, a fintech that provides money transfer and bill payment solutions has expanded into South Africa. Launched in 2020, the startup also disclosed plans to expand into other markets in the future. Disrupt Africa
AfricaB2B Payments in Africa. An extensive report on the prevailing trends of B2B payments in Africa, including surveys from African businesses. Duplo
EgyptMNT-Halan raises $150 million from securitised bond issuance. MNT-Halan, through Tasheel, a micro-lending subsidiary, has securitised $150 million of its loan book in a bond offering to local financial institutions. The bond issuance process is the first tranche of a larger $600 million program, in partnership with the Commercial International Bank (CIB). The Fintech Times

Securitisation of loans are a good way for MNT-Halan to move some of the credit risks from their balance sheet and also borrow at a lower interest rate. Cheap borrowing is possible because the loan assets which have been separated from the MNT-Halan balance sheet can be given a better credit rating than the overall MNT-Halan business. 
EgyptMNT-Halan also acquires Talabeyah for an undisclosed sum MNT-Halan has also acquired Talabeyah, a B2B marketplace for an undisclosed sum. With this acquisition, SMEs and retailers on MNT-Halan will be able to source goods directly from FMCGs and other manufacturers. Business Wire

By allowing retailers to buy directly from manufacturers, MNT-Halan can capture extra payments revenue but also keep more of its customers’ spending on its platform. MNT-Halan can also provide short-term loans to retailers to finance the purchase of inventory. For Talebayah, the acquisition provides an avenue to distribute its solution to a wide and growing base of retailers.

These potential benefits are however dependent on the depth and quality of integration between both companies. To properly reap the obvious opportunities, both MNT-Halan and Talabeyah would have to tightly but seamlessly couple their platforms in a way that is best for their customers.
West AfricaWave raises €90 million from IFC. Wave, the mobile money service based in Cote d'Ivoire and Senegal, has raised EUR 90 million from the International Finance Corporation (IFC). The new financing, which is a debt provided by IFC and other investors, will be used to drive product development and expansion. IFC
South AfricaSava raises $2 million in pre-seed funding. South Africa's Sava, an expense management platform for business, has raised $2 million in pre-seed funding. The new round, which included investors such as Unicorn Growth Capital and Ingressive Capital, will allow the startup to launch its product in South Africa and potentially expand to more African countries. TechCabal
Other Fundraising News
MaliOKO extends seed round by $500k. WeeTracker
TunisiaPaymee raises undisclosed funding. TechBuild
EgyptBoyot raises undisclosed pre-seed funding. Disrupt Africa
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