MoneyFellows Secures $13M to Expand ROSCA Model Beyond Egypt

MoneyFellows Raises $13M for African Expansion

Egyptian fintech MoneyFellows has secured $13 million in a pre-Series C funding round. The round was led by Al Mada Ventures and DPI’s Nclude Fund, with participation from Partech Africa and CommerzVentures. This brings MoneyFellows' total funding to over $60 million.

Digitizing Traditional Savings Circles

MoneyFellows digitizes Rotating Savings and Credit Associations (ROSCAs), also known as money circles. These traditional savings groups involve a fixed number of participants contributing regularly to a shared pool. Each cycle, one member receives the full amount. MoneyFellows’ platform makes these circles accessible to a wider audience through its app.

Founder and CEO Ahmed Wadi explains that MoneyFellows matches savers and borrowers using data like credit scores and income. This allows the platform to scale without lending from its own balance sheet. MoneyFellows only provides funding when a ROSCA group has an unfilled slot, keeping its exposure minimal.

Unlike traditional lenders, MoneyFellows distributes risk and funding across its users. Wadi notes that currently, only 7-8% of slots require MoneyFellows to contribute working capital.

Profitability and Expansion Plans

MoneyFellows has achieved profitability in Egypt, boasting over 8.5 million users. The average payout per user has nearly doubled in the past two and a half years, reaching 45,000 EGP ($906). The company attributes its growth to the viral nature of the ROSCA model and competitive borrowing rates.

The company recently launched a card product for payouts, repayments, and spending. Future plans include introducing investment, payroll, insurance, and remittance products.

Targeting Morocco and Beyond

MoneyFellows plans to launch in Morocco by year-end, after securing necessary partnerships and regulatory approvals. Morocco presents a favorable environment with a large unbanked population and a strong informal savings culture. The company also anticipates that events like the 2030 FIFA World Cup will boost digital adoption in the country.

MoneyFellows is also exploring expansion into other African and South Asian markets with similar characteristics. However, entering more diverse markets will test the adaptability of the ROSCA model where informal finance is less culturally relevant or formal banking is more established.

“ROSCAs are very old financial arrangements,” says Omar Laalej, Managing Director at Al Mada Ventures. “AMV was impressed by the modernized version of this business that Money Fellows was able to build, positively impacting thousands of families in Egypt.”