Another investment opportunity has been created for Fintech startups driving financial inclusion in Africa. The additional investment worth $23 million was set up by Accion Venture Lab, the investment arm of Accion, a United States-based company that has interest in microfinance and fintech impact firms.
The investment fund was established to cater for Fintech companies regardless of their operational base. However, Accion Venture Lab is planning to dedicate about 30% of the fund to Africa, where financial inclusion is still very much low compared to the developed world.
Also, Africa, being the new frontier and part of the emerging markets is a place that Fintech startups can leverage on. And with a sizeable number of Africans still underserved as regards financial transaction, the need for more Fintech to emerge and grow is high.
Nigeria, on its part, hopes to achieve 80% financial inclusion by 2020. And to ensure it meets the target, the Central Bank of Nigeria (CBN) has approved the operation of mobile money by telecommunication companies. This is in addition to the Fintech companies operating in Nigeria’s financial market.
Commenting on the need to support Fintech startups, the President and Chief Executive Officer of Accion, Michael Schlein, in a statement seen by Nairametrics said, “Despite progress, three billion people still have no safe or simple way to save money, get a loan to build a business, pay a bill, or protect their health and property with insurance.
“Fintech startups are finding new ways to provide products and services that help these underserved people. Yet often startups lack the capital and strategic support they need to grow and scale their impact. Accion Venture Lab addresses this need.”
Investors of the $23 million fund: It was disclosed that the fund was raised from third-party investors who are also eager to reduce the underserved or unbanked population and ensure the financial inclusion level increase.
The following are some of the investors that participated in the fundraising
- Ford Foundation;
- Visa Inc.; and
Accion Venture Lab was initially funded with $10 million by Accion when it was established in 2012, but with the new funding from co-investors and an extra $10 million from Accion means Accion Venture Lab now has $43 million investment fund.
Accion Venture Lab has already invested in three African Fintech startups, Apollo Agriculture, Lidya, and Lulalend. The investment firm has also financially backed 36 Fintech startups across 5 continents.