While most African digital lenders depend on working capital to fuel growth, MoneyFellows has quietly done what few others have: lend billions of Egyptian pounds with almost no debt or balance sheet exposure.
Now, after raising $13 million in a pre-Series C round led by Casablanca-based Al Mada Ventures and DPI’s Nclude Fund, the Cairo-based fintech says it’s ready to shift from steady growth to regional expansion.
The round, which also drew participation from Partech Africa and CommerzVentures, brings the company’s total funding to just over $60 million.
Founder and CEO Ahmed Wadi notes that, unlike fintechs burning through cash to scale, the startup has kept operations lean while digitizing one of the world’s oldest financial systems: the rotating savings and credit association (ROSCA).
“We have managed to crack this model and reach profitability,” said Wadi. “Doing this while lending out billions without relying on working capital at all is quite disruptive in itself.”
ROSCAs are informal savings groups where a fixed number of participants contribute regularly to a shared pool, which pays out to one member per cycle. Common across emerging markets, they go by different names: esusu or ajo in Nigeria, kameti or chit fund in India, and gam’eya in Egypt.
Here’s how it works: Say ten people each contribute $1,000 a month. Every month, one person receives the full $10,000. The cycle repeats until everyone gets a payout. While these groups work best within trusted circles, their offline nature limits access and scalability.
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MoneyFellows, launched in 2016, digitizes this model by opening access to a broader pool of users across the country. Through its app, anyone can form or join ROSCA groups or “circles.” Similar models exist globally with Pakistan’s Oraan and the U.K.’s StepLadder.
Rather than act as a lender, MoneyFellows matches savers (usually last in line) and borrowers (typically first in line) using behavioural data, credit scores, and income tiers.
This approach allows it to scale without lending from its balance sheet; the company only steps in when a ROSCA group has an unfilled slot, according to Wadi.
“If we run circles of 10 people each and only find nine members for some, we step in to fund the missing one,” explains Wadi, who tested the ROSCA model in Germany and the U.K. before launching in Egypt. “Instead of canceling the group, we finance one slot, which activates and monetizes the remaining nine.”
In a typical lending business, a company has to borrow money from banks or other financial institutions to lend it out, most of the time incurring interest costs and default risk.
However, in MoneyFellows’ case, the risk and funding are spread across its users, keeping the proportion of unfilled Rosca slots under 10%. In comparison, buy now, pay later (BNPL) providers and digital lenders often have full working capital exposure on their loan books.
“Today, only 7-8% of slots in active Roscas require us to step in with working capital,” Wadi notes.
Such exposure may be low in percentage terms, but as MoneyFellows scales, it adds up. Hence why the company, which raised this funding as a bridge to a much larger Series C round planned for next year, is also in advanced discussions with local banks to secure working capital in its bid to grow its “circles” much faster.
Operating profitably and expanding outside Egypt
MoneyFellows says it has reached profitability in Egypt, placing it among a small group of African fintech startups operating in the black.
Since launching in 2018, the platform has grown to over 8.5 million users, up from 4.5 million at its last funding milestone. The average payout per user has nearly doubled in the past two and a half years, from 23,000 EGP ($453) to 45,000 EGP ($906), with strong adoption among higher-income segments.
“This model is naturally viral,” Wadi said of the startup’s growth. “If you digitize the experience for two members of an offline ROSCA, they often bring the other eight with them. That kind of organic growth is hard to beat.” Competitive borrowing rates, he adds, have also helped accelerate adoption.
Earlier this year, MoneyFellows launched a card product that allows users to receive payouts, repay instalments, and spend across a merchant network.
The eight-year-old fintech also plans to introduce investment, payroll, insurance and remittance products down the line, moves that put MoneyFellows in competition with other Egyptian digital banks like Lucky, Khazna, and Telda.
Its next test will be replicating its success beyond Egypt, an ambition Wadi first voiced in 2022. He admits that expansion took longer than expected due to the model’s complexity, which the company chose to refine before going regional.
Digitizing ROSCAs isn’t as straightforward as launching a savings or loan product. According to him, the process involves building recommendation engines to match users to the right slots, balancing thousands of circles in real time, and minimizing default and dropout risk, all while maintaining user trust.
“Cracking the model took longer than we thought,” Wadi remarked. “But it was worth the time. Most attempts to scale Roscas digitally, even by banks and telcos globally, have failed because they underestimated how complex the underlying behavior is.”
After nearly a decade refining its model in one of Africa’s largest fintech markets, partnering with over 350 local and regional entities and facilitating more than $50 million in investments, MoneyFellows plans to launch in Morocco by year-end, having secured key partnerships and regulatory approvals.
Morocco offers familiar ground: a large unbanked population, a strong informal savings culture (known locally as daret), and a regulator-friendly environment. MoneyFellows is also betting that events like the 2030 FIFA World Cup will accelerate digital adoption in the country.
The company is also eyeing other African and South Asian markets with similar dynamics. However, entering more diverse markets will test the model’s adaptability in regions where informal finance is less culturally relevant or formal banking is more entrenched.
“ROSCA’s (Rotating Savings and Credit Association) are very old financial arrangements, with roots going back hundreds, if not thousands of years,” said Omar Laalej, Managing Director at Al Mada Ventures. “AMV was impressed by the modernized version of this business that Money Fellows was able to build, positively impacting thousands of families in Egypt.”
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