Grace Ashiru
UK-based TerraPay, a digital payments provider specializing in remittance transfers across Africa, has secured $95 million in debt financing to improve low-cost remittance transactions on the continent, enhance business activities, and boost both reliability and transaction speed. The financing package includes $75 million from the International Finance Corporation (IFC) and a $20 million senior secured loan from British International Investment (BII) through Lendable’s existing senior secured facility.
The IFC’s contribution comprises a $30 million loan from IFC’s account, a $15 million B Loan from ILX under IFC’s B Loan Program, and a combined parallel loan of $30 million from development finance institutions OP Finnfund Global Impact Fund I and BIO.
The fintech industry is seeing significant boosts through integration and connectivity with major markets and money transfer operators like Western Union, MoneyGram, and Ria.
Armed with these funds, TerraPay is set to expand its operations by forging partnerships with more global money transfer operators, thereby increasing the volume of transfers it handles across Africa. The company also aims to reduce costs, enhance speed, and simplify the process of international remittances.
Furthermore, TerraPay has joined forces with enza, a payments technology company dedicated to African banks, to improve payment acceptance and streamline cross-border payments.
In July 2023, Safaricom partnered with TerraPay, enabling over 32 million M-PESA customers to send and receive money with more than 200 million people in Bangladesh and Pakistan.
This isn’t IFC’s first financial backing for TerraPay. Back in 2019, IFC invested $8 million in the fintech’s Series A funding round. Ambar Sur, TerraPay’s Founder and CEO, acknowledged this ongoing support, stating that it has significantly fueled their mission to strengthen their infrastructure, expand their network, and develop new solutions.
For Aliou Maiga, IFC’s Regional Industry Director for the Financial Institutions Group for Africa, this partnership aims to enhance digital payment infrastructure, empowering both individuals and small businesses.
BII highlighted that its funding for TerraPay will serve as working capital to support the increasing remittance volumes to Africa. The focus will be on key African corridors, with significant volumes anticipated in Kenya, Ghana, Egypt, Uganda, Tanzania, Cameroon, Mali, Benin, Côte d’Ivoire, Senegal, and Mozambique.
