A South African based Fintech Company, Adumo, has secured $15million in funding from the IFC, a member of the World Bank Group. This fund is expected to help expand access to electronic payment solutions, especially for underserved small and medium-sized businesses.
This large investment which was placed as preferred shares to fund the growth of the company will make digital payments systems more affordable and accessible to smaller businesses in Africa, many of which currently rely on cash transactions.
The Fintech Company which was formerly known as Crossfin Transactional Solutions before it was rebranded as Adumo in June 2020 is South Africa’s largest independent payment provider with a presence in 14 African countries. The company owns merchant acquirers Sureswipe and Ikhokha, as well as other payment platforms like Innervation Pan African Payments, Innervation Rewards, SwitchPay and Humble POS.
According to a statement by the CEO of Adumo, the funding will enable the fintech company offer their services to African business and SMEs that have been impacted by the Covid-19 pandemic and are embracing digital payments at an impressive rate. He stated that “The pandemic and associated impact on consumers and businesses are transforming the face of the payments industry with interest in cashless payment services at an all-time high. The funds we have raised from our new equity partners will help us roll out new payment innovations and purpose-based lending services to support consumers and retailers as they navigate an uncertain 2021.” This information was made available in a press release on March 9, 2021.
Commenting on the funding, IFC’s Vice President for Middle East and Africa, Sérgio Pimenta said “Through this investment in Adumo, we will be helping small businesses tap into the digital economy, which is more important now than ever before. Digital payments are often the first step for a small business to build a credit history, which opens the way to access further financial services such as financing to grow the business,”
Lending support to small businesses and providing access to finance and financial services in an affordable and sustainable manner has always been a key point of IFC’s agenda because of their potential to not only grow the economy but to also create jobs.
In South Africa, micro, small and medium-sized enterprises makeup 34% of the GDP and employs about 50% of the country’s workforce. But many of these businesses do not have access to key services that would help their business grow. Digital and mobile payment solutions can help businesses increase footfall and improve customer retention by supporting the transition away from cash-based transactions to cashless transactions. Funding for companies that make this possible is a priority, and it is great to see that investors see it in the same way.