Our Correspondent | Africa Guardian
Africa’s tech ecosystem has recently gained attention with two new fintech unicorns: South Africa’s TymeBank and Nigeria’s Moniepoint, both raising funds and achieving valuations exceeding $1 billion. However, these valuations are not just a sign of investor confidence but also reflect the companies’ ability to adapt disruptive fintech models originally designed for developed economies, tailoring them for a region where nearly half the population remains unbanked.
Both TymeBank and Moniepoint share a goal of simplifying banking for individuals and businesses in two of Africa’s largest economies. TymeBank initially targeted retail customers with low-cost bank accounts and savings products before expanding into business banking, offering working capital to small businesses in South Africa. Moniepoint, on the other hand, began by supporting small businesses in Nigeria with accounts, payments, loans, and expense management tools, before branching into retail banking.
A key to their success is their hybrid approach to banking, blending digital services with physical touchpoints to engage customers in a region where cash remains king, internet connectivity can be unreliable, and trust in online systems is low.
A Mixed Approach for Africa’s Informal Markets
Unlike challenger banks in developed markets such as Revolut, Monzo, and Chime, which operate entirely digitally, the hybrid model is essential for success in Africa. While some fintech platforms in emerging markets, such as Nubank in Brazil and Open in India, have taken a fully digital approach, a purely online-only model faces limitations in Africa. As Stephen Deng, co-founder of DFS Lab, notes, these platforms often hit revenue ceilings due to limited average revenue per user (ARPU) in many African markets.
In Africa, where over 90% of transactions are still conducted in cash, fintech companies like TymeBank and Moniepoint recognize the importance of blending in-person and digital services. This “cybernetic” approach, as described by Deng, combines physical touchpoints with technology, enabling these companies to reach broader customer bases while minimizing the costs of fully digitizing channels.
Expanding Reach with Retail Partnerships and Local Agents
TymeBank’s growth has been bolstered by partnerships with retail giants like Pick n Pay and Boxer, which allow the company to establish retail touchpoints across South Africa. These retail locations serve as quasi-branches where customers can open accounts and deposit funds, providing a human element for those who prefer in-person interactions. The model resonates with African consumers, who find it natural to open a bank account while shopping for groceries.
In South Africa, TymeBank operates over 1,000 kiosks and has 15,000 retail points. Its sister company, GoTyme, which launched in the Philippines in 2022, follows a similar approach, with nearly 500 kiosks and 1,500 bank ambassadors.
Moniepoint, in Nigeria, has taken a different approach by building an extensive network of around 200,000 agents who act as human ATMs. These agents, often small business owners equipped with point-of-sale devices, facilitate cash deposits, withdrawals, and bill payments in areas where traditional banking infrastructure is scarce or unreliable. This model, inspired by mobile money services like M-Pesa, is crucial for serving rural populations in countries like Nigeria, Tanzania and Kenya where ATMs are limited.
Leveraging a Hybrid Model for Broader Financial Inclusion
Both fintechs have expanded beyond basic banking services to offer products like credit, working capital loans, business management tools, and insurance. With TymeBank’s recent $250 million Series D funding round and Moniepoint’s $110 million raise, both companies are looking to scale beyond their home markets. TymeGroup is already expanding into Vietnam and Indonesia, while Moniepoint plans to deepen its operations in Nigeria and enter markets like Kenya.
This hybrid model is not only proving successful in fintech but could also be a blueprint for industries across Africa’s informal markets. For instance, telemedicine could integrate physical touchpoints with digital platforms to onboard patients and streamline operations. Similarly, e-commerce, group insurance, and B2B marketplaces could all benefit from combining in-person interactions with digital tools.
As the fintech sector continues to grow in Africa, the hybrid model employed by TymeBank and Moniepoint offers a scalable approach that balances the region’s digital and offline realities, driving both financial inclusion and growth.
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