TerraPay raises $95 million from IFC, Finnfund & BII for low-cost remittance transfers across Africa

TerraPay, an Africa-focused digital payments provider, has raised $95 million from the International Finance Corporation (IFC) and the British International Investment (BII) to boost access to affordable remittances and support livelihoods and business activity across Africa.

IFC’s $75 million financing package for TerraPay includes a $30 million loan from IFC’s own account, a B Loan of $15 million provided by asset manager 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. BII, the UK’s development finance institution will advance a $20 million senior secured loan to TerraPay.

TerraPay will use the funds to expand its operations by partnering with more global money transfer operators and by increasing the volume of transfers it processes across Africa. The expansion will help reduce the costs, enhance speed, and simplify international remittance transfers.

“Our association with IFC goes back a long way and as we continue our journey towards growth, their support continues to be invaluable. This has fueled our mission, enabling us to strengthen our infrastructure, expand our network and invest deeply in technology and solutions that solve real-world problems,” said Ambar Sur, Founder and CEO for TerraPay. “As we deepen our partnership, I look forward to furthering our common vision to boost financial inclusion and accessibility, empowering families, individuals, and businesses across the African continent leveraging our vast global payments network.” 

In 2019, IFC invested $8 million as part of the Series A funding round for TerraPay. TerraPay also a new partnership with Enza to transform Africa’s payments ecosystem with the goal of accelerating financial inclusion. Enza executive director Andrew Key said the partnership ”will play in transforming the experience of businesses across Africa, bringing many of them into the formal financial ecosystem for the first time.”

TerraPay customers can send money from 41 countries and receive from 40. African customers can not only send and receive funds within Africa, but also to and from markets across Europe and Asia. TerraPay integrates and connects major markets and money transfer operators such as Western Union, MoneyGram, and Ria, supporting household incomes, small businesses, and contributing to overall economic development.

“At IFC, we are committed to creating opportunities for inclusive growth in Africa, including by leveraging digital solutions to bridge financial gaps and improve livelihoods,” said Aliou Maiga, IFC’s Regional Industry Director for the Financial Institutions Group for Africa. “Through this partnership, we aim to support a robust digital payment infrastructure that empowers individuals and small businesses.”

BII’s funding will be used as part of TerraPay’s working capital to pre-fund growing remittance volumes to Africa. It will prioritise key African corridors, with high volumes expected in Kenya, Ghana, Egypt, Uganda, Tanzania, Cameroon, Mali, Benin, Cote d’Ivoire, Senegal and Mozambique.

BII is committing through Lendable’s existing senior secured facility, leveraging the partner’s expertise in fintech debt investing across Africa as well as their investment monitoring capabilities.

“Sending money to Africa is expensive. That is why our investment in TerraPay is critical to help increase availability of lower-cost, efficient, accessible and reliable remittances. This aligns with our goal to support resilient financing and improve economic opportunities on the continent,” said Chris Chijiutomi, Managing Director and Head of Africa, BII.

On the other hand, BII), the UK’s development finance institution (DFI) and impact investor, today announced a $20 million senior secured loan to TerraPay, a global cross-border payments processor with a key focus on remittance transfers into Africa.

The remittance costs for the Sub-Saharan African region remain the highest in the world. For example, sending $200 to the region cost on average 8 per cent in 2022, while the global average cost for the same amount stands at 6.2 per cent. This is more than double the Sustainable Development Goal target of 3 per cent, according to the World Bank.

Through its network, TerraPay connects directly both traditional money transfer operators, such as Western Union, and digital-only fintechs like Wise with some of the largest mobile money operators in Africa including M-Pesa, MTN Mobile Money, Airtel Mobile Money. Its tech-enabled model facilitates real-time, lower-cost digital money transfers, tackling the bottleneck of high transfer fees and slow settlement for the African diaspora sending money back to the continent.

“We have been supporting TerraPay since 2020, as the company accelerated its growth facilitating remittances across emerging markets,” said Suresh Samuel, Managing Director and Head of Fintech at Lendable, adding, “we continue to believe in the importance of increasing digital payments globally and are excited to work with BII in furthering support to TerraPay to expand this mandate.”