Flow Global: A trailblazer in mobile money micro-enterprise financing
Mobile money has been a leading technology in the digital transformation of the African financial economy and the move towards total financial inclusion. According to the GSMA, sub-Saharan Africa alone accounts for approximately 70% of the USD 1 trillion global mobile money market. At the heart of the mobile money, ecosystem is “cash in, cash out” agents or mobile money microenterprises who convert physical cash to digital money or vice versa for clients for the purposes of electronic bill payments, peer-to-peer payments, safekeeping, etc.
Data from a recent assessment on the proliferation of mobile money financing by Microsave Consulting for The Bill & Melinda Gates Foundation indicates that in 2019 alone, the global density of mobile money microenterprises was 7 times more than ATMs and 20 times more than bank branches. Furthermore, in 2020 these microenterprises digitised transactions worth more than
USD 500 million per day globally. Despite these positive numbers, there is a gaping hole in the mobile money ecosystem when it comes to mobile money business financing. Mobile money microenterprises are self-sustaining in terms of the digital working capital they employ to meet day-to-day transaction volumes. A significant portion of mobile money microenterprises do not function at maximum capacity partly due to limitations on the transaction volumes they can execute before they run out of digital float.
Flow Global Limited (i.e., Flow) is a Pan-African company which started out in 2019 with the sole purpose of providing instant digital working capital needs to mobile money microenterprises to enable them to maximise they transaction capacity and subsequently grow. Financing these enterprises has been somewhat overlooked due to the difficulties of generating tailor-made products that suite the short and fast-paced operating cycles of these businesses and the ability to manage such a dynamic portfolio. Flow managed to generate a solution by building a tailor-made proprietary technology, products and an operating ethos that suites the needs and operating cycles of these microenterprises while managing associated risks. The Flow system has the ability to do in-house scoring and decisioning based on client transaction history and repayment records, instant float advance disbursement to mobile money agents, real-time oversight of portfolio matrices and dedicated feet on the ground for client relationship management.
Flow has managed to establish its operations in Uganda which is one of the most active mobile money markets in the world, and is already making inroads in Rwanda. Flow has to-date grown significantly from a combination of funding from Angel investors and grants and institutional debt from DEG and UNCDF, respectively. Recently flow got another grant of EUR 525 000 from DEG, which will take it to global profitability.
Verdant Capital is the sole advisor to Flow Global on its capital-raising efforts.