MIGA has issued guarantees covering a $200 million investment into companies providing digital financial services under the Airtel Money brand in 12 African countries.
These companies provide access to financial services through mobile phones in a region where most people lack access to formal bank accounts.
The guarantees were issued to The Rise Fund II Aurora S.à r.l. (The Rise Fund), which is making its investments through a parent company, Airtel Mobile Commerce B.V., into Airtel Money operating companies in Chad, the Republic of Congo, the Democratic Republic of Congo, Gabon, Kenya, Madagascar, Malawi, Niger, Rwanda, Seychelles, Uganda, and Zambia.
MIGA’s guarantees provide coverage against the risks of war and civil disturbance, expropriation, and transfer restriction and inconvertibility, for up to five years.
MIGA anticipates providing additional guarantees for The Rise Fund’s investments in Airtel Money Nigeria and Tanzania in the near-to-medium term.
Airtel Money offers mobile money services, including wallet (cash-in/cash-out) services, airtime recharging, bill payments, and merchant payments.
International money transfers, savings, and microloan services will be offered in some countries.
Airtel Money leverages Airtel Africa’s broad distribution network, which is active in 14 countries across Sub-Saharan Africa, and an Airtel Money network that includes 38,000 fixed points of sale (kiosks, non-Airtel telecom and Airtel branches) and 400,000 non-exclusive agents.
Mobile money, which requires only a basic mobile phone, gives consumers access to certain financial services through mobile networks, independent of the traditional banking network.
During the COVID-19 pandemic, mobile money provided a channel for governments to deliver direct financial assistance and reduced the amount of physical contact required for economic activity.
Mobile money services are critical to financial inclusion in Sub-Saharan Africa, which is home to more than 50 percent of active mobile money accounts globally, and where most of the population does not have a traditional bank account.
Hiroshi Matano, Executive Vice President, MIGA said, “MIGA is pleased to support investments in mobile money services that increase financial inclusion in countries where access to bank-based financial services is typically low.
“Outside investors and a more competitive landscape for mobile money and digital financial services can help keep transaction costs low and promote the development of additional financial products such as microloans, savings accounts, international remittances, and even microinsurance, each of which could be particularly important and beneficial to low-income populations that lack access to formal banking services.”
