BNPL seduces African buyers

In these tough economic times, the ability to pay for products in interest-free installments, popularly known as buy now, pay later (BNPL), has never been more appealing to consumers around the world.

Across the African continent, the service is starting to gain traction in many countries as digitally savvy and highly underbanked populations seek to take advantage of the innovative payment solution.

A major deal that made waves last year was the acquisition of South Africa-based BNPL player Payflex, which was acquired by Australian firm Zip as part of the giant BNPL’s global expansion plans.

Launched in 2019, Payflex is considered the first and largest BNPL player in South Africa, one of Africa’s largest economies. The company works with leading local brands such as Runwaysale and Superbalist, and has grown from a base of 70 merchants in 2019 to over 1,000 active merchants today serving over 135,000 customers.

The Zip-Payflex deal was an indication that the continent, which remains largely untapped by global BNPL players, is ripe for disruption. Since then, several companies have sprung up, raising millions of dollars from global investors to boost service in the region.

Read more: Kenyan BNPL startup Lipa later raises $12m and targets more African markets

This month Lipa Later, a Kenya-based consumer finance and BNPL platform, raised $12 million from a group of international investors to expand its services across the region.

Launched in 2018, the company said it was looking to grow its presence in its existing markets of Kenya, Rwanda, Uganda and Nigeria while expanding into several new African markets over the next 12 months. especially Ghana and Tanzania.

Additionally, today (January 20), Moroccan B2B and FinTech e-commerce platform Chari announced that it had secured a seed round at a $100 million valuation as it considered venturing into BNPL space, starting with Morocco before expanding to Tunisia and other French countries. mother tongue African countries.

“Chari will use the money from this round to test BNPL’s services with its existing clients. If successful, Chari will acquire a local credit company to enable store owners to lend money to their end users and further grow their business,” CEO Ismael Belkhayat said in a statement, according to TechCrunch.

Egypt shows BNPL promise

Another country showing huge growth potential is Egypt, with the BNPL trend spreading rapidly to buyers amid rising inflation that is putting pressure on consumers.

Last month, Egyptian FinTech company Sympl, which launched just six months ago, announced a $6 million seed funding round led by Beco Capital of the United Arab Emirates, PYMNTS reported.

Related: Buy now, pay later in Egypt with $6 million investment in Sympl

“[…] There is a huge opportunity to buy now, pay later here in Egypt, given its crowded market,” Mohamed El-Feky, the company’s founder and CEO, told TechCrunch. “It’s a consumer-driven market where we have great accessibility to consumer products and services, online or offline.”

Read also: Black Friday campaign creates strong customer engagement on Jumia Egypt platform

For its Black Friday sales, Africa-focused online marketplace Jumia has also tapped into the growing trend through its Egyptian subsidiary – one of the country’s leading e-commerce platforms – by partnering with the National Bank of Egypt and other banking institutions to offer the BNPL service to consumers. at zero rate.

Thanks to this agreement, consumers using the JumiaPay app, the company’s electronic payment platform, were able to spread payments over 24 months using credit cards from institutions such as MISR Bank and Alexandria Bank. .

In a recent interview, Hesham Safwat, CEO of Jumia Egypt, said rising inflation in Egypt and the pressure it has put on consumer finances has led to a BNPL boom that is expected to spread further. well beyond Black Friday.

This is why Jumia, JumiaPay and valU, a leading BNPL platform in the Middle East and North Africa region, recently signed an agreement to enable valU to become a payment solution through Jumia and JumiaPay.

The agreement will link valU and JumiaPay for electronic payment services, providing customers with nine months of interest-free installments when shopping on the Jumia platform.

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