MoneyFellows Secures $13M to Expand Innovative Group Savings Model Beyond Egypt

In the dynamic landscape of African fintech, MoneyFellows stands out as a pioneer in digitizing traditional financial systems. This innovative company has successfully lent billions of Egyptian pounds with minimal reliance on debt, positioning itself for substantial growth following a recent funding round.

Recent Funding Boost for MoneyFellows

MoneyFellows has recently secured $13 million in a pre-Series C funding round, spearheaded by Al Mada Ventures based in Casablanca, along with DPI’s Nclude Fund. This funding round also saw participation from notable investors such as Partech Africa and CommerzVentures. With this investment, the total funding raised by the company has exceeded $60 million.

Innovative Business Model

Founded in 2016, MoneyFellows has transformed the traditional Rotating Savings and Credit Association (ROSCA) model into a digital platform. This approach has allowed the fintech to maintain lean operations while achieving profitability—an unusual feat among many digital lenders in Africa.

According to Ahmed Wadi, the founder and CEO, “We have managed to crack this model and reach profitability, lending out billions without relying on working capital.” This innovative strategy has enabled MoneyFellows to match savers and borrowers through an app, democratizing access to financial services.

Understanding ROSCAs

ROSCAs are informal savings groups where members contribute to a common fund that pays out to one participant per cycle. These groups, known by various names across different cultures, include:

• Esusu or Ajo in Nigeria
• Kameti or Chit Fund in India
• Gam’eya in Egypt

While effective within trusted circles, traditional ROSCAs often face challenges in scalability and accessibility.

Expanding Beyond Egypt

With over 8.5 million users and a significant increase in average payouts, MoneyFellows is now focusing on regional expansion. The company aims to replicate its success in other markets, starting with Morocco. Wadi emphasizes that entering new markets will test the adaptability of their model, especially in regions where informal finance is less prevalent.

“Cracking the model took longer than we thought,” Wadi noted. “But it was worth the time.” The company’s strategic approach involves building recommendation engines and managing thousands of financial circles in real-time, ensuring trust and minimizing risks.

The Future of MoneyFellows

With plans to introduce additional services such as investment, payroll, and insurance products, MoneyFellows is positioning itself as a formidable competitor against other Egyptian digital banks like Lucky, Khazna, and Telda.

As the company prepares for its next funding round and works on forming partnerships with local banks, its innovative approach to digital finance may very well reshape the future of lending in Egypt and beyond.

Conclusion

MoneyFellows’ journey illustrates the potential of fintech in transforming traditional financial practices. By leveraging technology to enhance accessibility and efficiency, the company is not only contributing to financial inclusion in Egypt but also setting a precedent for similar ventures across Africa.

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