Africa-focused digital payments company TerraPay acquired $95 million from the International Finance Corporation (IFC) and the British International Investment (BII) to make it easier for people to send money back home at low cost and to help businesses and people’s lives across Africa.
Unveiling TerraPay’s Investor Lineup: IFC, ILX, and BII
TerraPay will receive a $20 million senior secured loan from BII, the UK’s development finance institution, and a $75 million financing package from IFC, including a $30 million loan from its account, a $15 million B Loan from asset manager ILX under IFC’s B Loan Programme, and a $30 million parallel loan from OP Finnfund Global Impact Fund I and BIO.
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With the money, TerraPay will be able to grow its business by teaming up with more global money transfer companies and handling more payments across Africa. As a result of the expansion, foreign money transfers will be cheaper, faster, and easier to do.
“Our relationship with IFC is longstanding, and their support is invaluable as we grow. This has driven our purpose, allowing us to develop our infrastructure, extend our network, and invest heavily in technology and solutions that tackle real-world problems, said TerraPay founder and CEO Ambar Sur. As we strengthen our cooperation, I look forward to enabling families, individuals, and businesses across Africa with our enormous global payments network to improve financial inclusion and accessibility.
In 2019, as part of TerraPay’s Series A funding round, IFC put $8 million into the company. TerraPay and Enza have partnered to change Africa’s payments environment to boost financial inclusion. Enza executive director Andrew Key said the alliance “will transform the experience of businesses across Africa, bringing many of them into the formal financial ecosystem for the first time.”
TerraPay allows 41-country transfers and 40-country receipts. African customers can transfer money inside Africa and to Europe and Asia. TerraPay supports households, small enterprises, and economic development by connecting critical markets with money transfer operators like Western Union, MoneyGram, and Ria.
“At IFC, we are committed to creating inclusive growth in Africa, including by leveraging digital solutions to bridge financial gaps and improve livelihoods,” said Aliou Maiga, IFC’s Regional Industry Director for the Financial Institutions Group for Africa. We want to empower individuals and small companies with a robust digital payment infrastructure through our relationship.
TerraPay’s Working Capital for Remittance Growth
TerraPay’s operating capital will pre-fund expanding African remittance volumes with BII’s finance. It will emphasise the high volume of African corridors in Kenya, Ghana, Egypt, Uganda, Tanzania, Cameroon, Mali, Benin, Côte d’Ivoire, Senegal, and Mozambique.
Using Lendable’s senior secured facility, BII is leveraging the partner’s fintech debt investing expertise in Africa and investment monitoring.
Sending money to Africa is costly. Our commitment to TerraPay is crucial to increasing low-cost, efficient, accessible, and trustworthy remittances. Our goal is to encourage resilient financing and boost economic possibilities across the continent, said BII Managing Director and Head of Africa Chris Chijiutomi.
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However, BII, the UK’s DFI and impact investor, announced a $20 million senior secured loan to TerraPay, a worldwide cross-border payments processor focused on African remittances.
Sub-Saharan Africa has the highest remittance costs. In 2022, mailing $200 to the region cost 8%, while the global average was 6.2%. The World Bank says this exceeds the Sustainable Development Goal target of 3%.
TerraPay seamlessly links Western Union and digital-only fintechs like Wise to Africa’s top mobile money operators, including M-Pesa, MTN Mobile Money, and Airtel Mobile Money. Its tech-enabled concept allows real-time, lower-cost digital money transfers, addressing the high transfer costs and slow settlement for the African diaspora sending money home.
Lendable’s Managing Director and Head of Fintech, Suresh Samuel, said, “We have been supporting TerraPay since 2020, as the company accelerated its growth facilitating remittances across emerging markets.” He added, “We continue to believe in the importance of increasing digital payments globally and are excited to work with BII to further support Terra.