Finclusion Group, an African fintech platform has raised $20 million in a debt and equity pre-Series A financing round. The funding round saw the participation of Iyin Aboyeji – co-founder of Flutterwave and Andela, Charlie Delingpole – founder of ComplyAdvantage, Christian Faes of LendInvest, Amandine Lobelle, Jai Mahtani, Sudeep Ramnani, Jonathan Doerr, Richard Aseme of RCA Ventures, Klemens Hallmann, etc.
Finclusion Group provides financial services to its African users through its variety of credit-focused products using AI algorithms. The funding round was largely made up of debt financing which was provided by local currency funds in South Africa and Eswatini, and comes on the heel of a Lendable-led $20 million debt funding that took place in September last year. The company launched in 2018 and has built a series of customer-focused credit products aimed at increasing access to finance and narrowing the financial inclusion gap.
Thanks to the new funds, Finclusion which is currently present in South Africa, Kenya, Tanzania, Namibia and Eswatini, will be expanding to Uganda and Mozambique. A statement issued says that Finclusion’s strategy is to “drive financial inclusion within market segments that have traditionally been underserved across the African continent, with a current focus on southern and eastern Africa”.
Finclusion, which is based in Mauritius and focused in Africa, says that it has issued loans worth more than $300 million to over 240,000 people since it started. Its monthly disbursement also grew by 140 percent in the last 18 months and between December 2020 to December 2021, its loan book grew by 30 percent.
Finclusion plans on adopting a neobank strategy based on some of the shortcomings that it has experienced. Although it has had remarkable growth, the company still has active outstanding loans owed by at least ten percent of its total customers. Chief Executive Officer of the company, Timothy Nuy, said that “This is one of the reasons we are going into a neobank strategy to maintain old and new users rather than effecting churning them out”.
In other words, like other startups that eventually had to adopt newer strategies, Finclusion’s intention is to become a neobank. The company has already begun diversifying its product offerings from credit and has included an insurance product. It plans on launching a savings product, cards, and buy-now-pay-later products as soon as possible.