FSD Africa Investments has announced a $3.2 million investment into MFS Africa and Frontclear meant to strengthen African financial markets.
MFS Africa secured a USD$1.2 million follow-on investment from FSD Africa Investments to support implementation of a new partnership with Visa.
Meanwhile, Frontclear secured a USD$2 million investment from FSD Africa Investments to improve efficiencies and catalyse investment in the private sector.
FSD says the funds will enhance the domestic banking sector making it cheaper and easier for African consumers to transact globally.
In addition, speaking during the UK-Africa Investment forum FSD’s Anne-Marie Chidzero said that the two firms will have a transformative impact in Africa.
Chidzero says MFS Africa has the potential to allow anyone on the continent with a mobile money account to send money abroad or buy something on Amazon. MFS Africa connects over 180 million mobile wallets across Sub Saharan Africa.
MFS is the first non-bank to receive a pan-African issuing license from Visa. Therefore, it allows users to transact across several platforms and operators including mobile money, e-commerce, peer-to-peer messaging platforms and money transfer.
On the other hand, Frontclear will help banks across the continent access liquidity, knowledge and support to address barriers within the money markets. Frontclear fosters more inclusive markets by supporting interbank lending between domestic banks. As of January 2020, Frontclear had mobilised USD$1 billion in interbank credit through the issuance of USD$590 million in guarantees.
In 2018, FSD Africa Investments financed USD$2.2 million in MFS Africa Series B capital raise to support the expansion of its services and network. In 2015, FSD Africa made an investment into Frontclear valued at USD$7.5 million to improving interbank liquidity and strengthening financial markets on the continent