MIGA Bolsters Digital Economy in Sub-Saharan Africa
WASHINGTON, DC, July 29, 2022 — 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.
“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,” said Hiroshi Matano, MIGA Executive Vice President. “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.”
While traditional bank networks require a certain level of capital and population density to be viable, mobile money services can leverage existing telecom infrastructure and large networks of mobile money agents to provide low-cost financial services anywhere within the coverage area of mobile network operators. For this reason, mobile technology has changed the landscape of financial access for consumers. Mobile money services reduce the need for consumers to hold significant amounts of physical cash, avoiding a potential security risk and the inconvenience of cash transactions where the nearest brick-and-mortar banks or ATMs are far away.
About The Rise Funds
The Rise Funds are a core pillar of TPG Rise, TPG's global impact investing platform. Founded in 2016 by TPG in partnership with Bono and Jeff Skoll, The Rise Funds invest behind impact entrepreneurs and growth-stage, high potential, mission-driven companies that are focused on achieving the United Nations' Sustainable Development Goals. The Rise Funds deliver capabilities and expertise across a wide variety of sectors and countries at scale, focusing on opportunities in climate and conservation, education, food and agriculture, financial inclusion, healthcare, and impact services.
With approximately $14 billion in assets across The Rise Funds, TPG Rise Climate, and the Evercare Health Fund, the TPG Rise platform is the world's largest private markets impact investing platform committed to achieving measurable, positive social and environmental outcomes alongside competitive financial returns. For more information, visit therisefund.com or @therisefund on Instagram.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued over $69 billion in guarantees across 120 developing countries.
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