Affinity Africa, a Ghanaian digital banking startup, has raised $8 million in seed funding to expand its financial services and drive financial inclusion in Africa.
The funding round, led by European venture capital firms Grazia Equity and BACKED VC, will help the startup enhance its offerings and expand its reach across the region.
Since its launch in October 2023, Affinity has gained significant traction, onboarding over 50,000 customers, with 65% of them having no prior access to formal banking and more than 60% being women in the informal sector.
The rise of Affinity signals a shift in Ghana’s banking landscape, which has traditionally been dominated by mobile money services and is slower to adopt digital banking solutions due to strict regulations. Unlike Nigeria, where fintechs can easily obtain microfinance licenses, Ghana’s regulatory framework has posed challenges for digital banks. However, Affinity has managed to navigate these hurdles by demonstrating strong risk management and aligning its business model with the government’s goal of expanding financial services to the underserved.
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Affinity offers a wide range of services, including free savings and current accounts, loans, instant credit scoring, payments, and investments. Its innovative approach combines mobile and web applications with a robust agent network, allowing the company to reach remote areas. With its proprietary scoring engine, Affinity has disbursed over $15 million in loans, maintaining strong repayment rates with a non-performing loan rate of just 3%.
The company’s growth has exceeded expectations, with customer numbers growing threefold year-over-year and savings increasing by 35% month-over-month. This success highlights the significant demand for affordable and accessible financial services in Ghana.
The new funding will enable Affinity to expand its operations further, aiming to drive financial inclusion not only in Ghana but across Africa, particularly among individuals and small businesses previously excluded from the formal financial system.
