CPXXX: (POP) AfriCred

Centrifuge Governance Proposals
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About Us:
AfriCred Microfinance is an innovative fintech focused on advancing financial inclusion and economic empowerment across Africa, with a specialization in providing financing to MSMEs, particularly in import/export trade finance and general trade through asset-based finance. By simplifying credit access for underserved populations, AfriCred offers both financial assistance and essential business management training, fostering economic and social progress across diverse communities.

Leveraging blockchain technology, AfriCred facilitates seamless fund transfers between unbanked individuals and financial institutions. This holistic approach strengthens the informal sector and supports small business owners, enhancing local economies and promoting regional stability.

Overview

  • Business Name: AfriCred Microfinance

  • Current AUM: $1,262,689

  • $ Volume of Transactions Completed Last 12 months: $1,091,183

  • Location and Team Size:
    Location - Africa: Mali and Ivory Coast and ecowas countries
    Team Size – 10

  • Years in Operation: 2 Years

Key Professional Partners

TokenMinds:

  • Overview: TokenMinds is a pioneering entity in the digital asset realm, emphasizing blockchain technology applications.
  • Focus: Their expertise encompasses crypto asset management, blockchain consulting, and development of innovative financial blockchain tools.
  • Contribution: TokenMinds’ insights and technological prowess are instrumental in shaping AfriCred’s blockchain and digital finance strategies.

7 Bits Technologies

  • Overview: A premier web and mobile development company founded in 2011. Their mission is to bridge the gap between technology and business growth.
  • Focus: Technological partner - smart contracts, cross border platform.
  • Contribution: As a strategic collaborator and technology partner to AfriCred, Seven Bits Technologies plays a pivotal role in shaping AfriCred’s blockchain and digital finance strategies. Their innovative solutions, agile approach, and deep expertise contribute significantly to the project’s success.

Cryptexus:

  • Overview: Cryptexus, a Crypto and Blockchain Consulting Agency, empowers crypto startups and businesses by providing essential services across the entire spectrum of their journey.
  • Focus: Investor relations, tokenomics, investment materials, strategy.
  • Contribution: Cryptexus provides insights and guidance. They help shape the project’s direction by offering valuable perspectives on blockchain and digital finance strategies.

Bitlocus:

  • Overview: Bitlocus offers a wide range of ready-made tools to bootstrap FinTech / Crypto projects.
  • Focus: Crypto-as-a-service, NFT development, advisory services.
  • Contribution: Bitlocus provides practical support and guidance. Their team offers strategic advice on token liquidity, potential listings, and establishing partnerships, enhancing project progression.

Business: Describe your business and go to market strategy.

What makes your approach unique within your industry?

  • Holistic Financial Empowerment : Offers both accessible loans and business management training to MSMEs, especially targeting women, youth, and farmers.
  • Blockchain Integration : Leverages blockchain to improve fund transfers, simplify transactions for unbanked individuals and fostering financial inclusion.
  • Real-World Assets (RWA) : Utilizes assets like gold to create financial products that bridge traditional banking and new financial innovations.
  • Focus on the Informal Sector : Provides specialized support for informal businesses (crafts, agriculture, markets) essential to Africa’s economy.
  • Innovative Financial Tools : Develops tailored financial instruments like NFTs and Informal Finance Tokens (IFT) to cater to unique regional needs.

Why are you a good partner for Centrifuge?

  • Aligned Mission : Both AfriCred and Centrifuge prioritize expanding access to capital for underserved markets and communities.
  • DeFi Synergy : Centrifuge’s decentralized finance expertise complements AfriCred’s blockchain-backed financial solutions, enabling diversified funding avenues.
  • Regional Presence : AfriCred’s established operations in ECOWAS countries provide a strong market base for Centrifuge’s services.
  • RWA Focus : AfriCred’s RWA-backed products align well with Centrifuge’s model, fostering asset-backed financing options that can drive economic growth across Africa.
  • Enhanced Financial Inclusion : Together, the partnership can increase support for MSMEs, promote sustainable job creation, and advance economic stability in Africa.

How do you differentiate yourself from competitors?

  • Blockchain Integration : AfriCred is one of the few companies in this space using blockchain technology. This allows for secure, efficient transactions, particularly beneficial for the unbanked population, and sets it apart from traditional financing models used by most competitors.
  • Comprehensive Service Offering : Unlike many competitors that focus solely on issuing loans, AfriCred offers a broader suite of services, including payments and micro-insurance on loans. This integrated approach supports MSMEs more holistically, covering various financial needs.
  • Focus on ECOWAS Region : While many competitors serve single or multiple African countries, AfriCred focuses specifically on Mali, Ivory Coast, and other ECOWAS countries, allowing it to tailor its services to regional economic conditions and needs.
  • Capital Structure : Currently bootstrapped, AfriCred is also actively raising capital, which provides flexibility and control in refining its growth strategies to better meet the needs of underserved African markets.
  • Micro-Insurance on Loans : AfriCred is among the few offering micro-insurance on loans, providing added security for MSMEs and differentiating itself as a provider of risk management solutions, unlike many competitors who lack this feature.
  • Real-World Assets (RWA) and Financial Innovation : AfriCred stands out with its use of real-world assets, like gold, to create innovative financial products, offering a unique value proposition in financial inclusion and wealth creation in Africa.

How is your entity financed today, what are the current sources of capital:

  • AfriCred is currently bootstrapped, relying on personal investment and reinvested profits as the primary sources of capital.

What is your entity’s revenue/fee model:

  • Loan Interest : Revenue from competitive interest rates on loans provided to MSMEs.
  • NFT Transaction Fees : Fees from NFT sales and transfers, offering clients innovative financing options.
  • Service Fees : Charges for additional services like business management training and micro-insurance.
  • IFT Token Fees : Small transaction fees from trades using AfriCred’s IFT token within the ecosystem.
  • Cross-Border Fees : Revenue from facilitating international payments for MSMEs, supporting their global reach.

DeFi

Outline why DeFi is important to your business strategy & Articulate why Centrifuge’s community and protocol is a fit for financing.

  • Access to Capital: DeFi platforms widen the pool of investors, enabling Africred to secure funding beyond traditional banking systems.
  • Lower Costs: Reduced intermediaries in DeFi lead to lower transaction fees, allowing more funds to be directed toward operations.
  • Community Engagement: DeFi fosters strong community involvement, enhancing customer engagement and loyalty.

Structure: Terms

  • Pool Size: $ 1 Million
  • Average Ticket Size: $1,150 (Average Loan size)
  • Expected Default Rate: 1%
  • Expected borrowing rate on senior tranche (on-chain): 13.75%
  • Expected lending rate to end borrower (off-chain): 19%

Website: https://africa-africred.com/
Email: credit@africa-africred.com

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Hi @AfriCred, thank you for submitting this POP.

I have edited the title of the forum post and added some tags, according to the process for POP submissions.

Also, could you please provide some links to your website, articles about what you are doing, contact information etc?

Thank you.

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Hi @AfriCred! Some questions about your proposal.

  1. Why do you want to list a pool on Centrifuge?
  2. What benefits do you see from tokenizing with Centrifuge?
  3. Where do you see your investors coming from? Do you have a sales team that facilitates fund raising?
  4. How do you see IFT tokens playing into this equation? I dont think the Centrifuge app can accomondate this (to my knowledge)
  5. Who is on your team? Who is making this post?
  6. Can you share your service providers? (i.e. trustee, auditor, administrator, etc…)

Thanks in advance for your time!

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1. Why do you want to list a pool on Centrifuge?

Africred wants to list a pool on Centrifuge to scale its existing loan services and secure additional capital to meet the high demand for financing among MSMEs in Africa. By leveraging Centrifuge’s platform, Africred aims to access global liquidity sources. This partnership would allow Africred to further its mission of financial inclusion and economic empowerment across Africa, supporting local economies and enhancing stability through blockchain-enabled access to funding for small business owners and unbanked individuals.

2. What benefits do you see from tokenizing with Centrifuge?

  • Access to Global Liquidity : Tokenization on Centrifuge allows Africred to tap into a large & diverse pool, increasing the chances of raising capital.
  • Quicker Capital Raise: Centrifuge offers a faster access to capital, accelerating the fundraising process compared to other methods. This is critical as AfriCred is constantly working to meet the large borrower demand with a robust and healthy pipeline, which we aim to service as quickly as possible.
  • Scalability for Future Growth : Leveraging Centrifuge’s platform opens repeatable, scalable credit options for Africred, facilitating ongoing expansion in underserved markets.
  • Enhanced Market Credibility: As one of the largest DeFi platforms, Centrifuge enhances AfriCred’s credibility. Passing its qualification criteria and successfully raising funds signals AfriCred’s strong positioning in the decentralized finance ecosystem.

3. Who is on your team? Who is making this post?

Team:

  • Djigui Diallo (Founder, CEO): 18+ years in commercial banking, financial planning, and accounting across Africa.
  • Mariam Konate: Chief Marketing & Communication Officer and acting as Executive Director, + 5 years of experience
  • Obèd De-djekounyom (COO) : 5+ years in web and mobile app development; experienced in business development, incubation, marketing, and corporate finance.
  • Sadeck Sanoko (CTO, DApp Development) : 6+ years leading blockchain teams; experience in consulting and economic empowerment in the global south.
  • Arturas Svirskis (Advisor) : 11+ years in blockchain, fintech, and green energy; investor, consultant, and entrepreneur.

This post is made by Africred’s team.

4. Where do you see your investors coming from? Do you have a sales team that facilitates fundraising?

Our investors primarily originate from a diverse mix of sources interested in the African credit market:

  • Institutional Investors: Impact investment funds, private credit platforms, development finance institutions, and venture capital firms focusing on emerging markets.
  • High-Net-Worth Individuals and Family Offices: Investors keen on supporting financial inclusion and economic growth in Africa.
  • Global Investors: Those looking to diversify their portfolios by investing in emerging markets with high growth potential.

To facilitate fundraising, we have a dedicated Sales and Investor Relations Team:

Responsibilities:

  • Identifying and engaging potential investors.
  • Articulating our value proposition effectively.
  • Building and maintaining long-term investor relationships.

Collaborations:

  • Working with financial advisors and intermediaries specializing in emerging markets.
  • Aligning investors’ goals with our financing opportunities.

5. How do you see IFT tokens playing into this equation?

IFT tokens play a crucial role within the Africred ecosystem, adding value for both investors and borrowers. The plan is to integrate IFT tokens as collateral for loans on the platform, allowing merchants to secure funds at reduced interest rates. IFT tokens will also be used for staking rewards, insurance products, and as a payment token within the ecosystem, facilitating cross-border transactions in Africa. Africred aims to use IFT within its native ecosystem to enhance investor incentives and offer more flexible financing solutions.

IFT tokens are integral to our strategy for expanding investor participation and enhancing liquidity. By tokenizing assets through IFT tokens on the Centrifuge platform:

  • Accessibility : Fractionalized investments open to smaller investors worldwide.
  • Transparency : Blockchain provides clear, traceable transactions, building trust.
  • Liquidity : Secondary markets allow flexible buying and selling of tokens.
  • Cost Efficiency : Smart contracts automate processes, reducing overhead."

In Summary, IFT tokens enable us to:

  • Align our fundraising with innovative financial technologies.
  • Make investment offerings more attractive and accessible.
  • Support our mission to expand credit access in Africa.

By integrating IFT tokens, we’re not only modernizing our investment platform but also fostering an inclusive financial ecosystem that benefits both investors and communities in Africa.

6. Can you share your service providers? (i.e. trustee, auditor, administrator, etc…)

Bitlocus: https://bitlocus.com/

Bitlocus is a leading provider of Crypto-as-a-Service (CaaS) solutions, bridging traditional finance with the crypto ecosystem. Through customizable tools, Bitlocus enables fintech companies to integrate crypto transactions, asset management, and NFT services seamlessly. Its platform also offers advisory on tokenomics, liquidity management, and partnerships with exchanges, making it easier for businesses to adopt and grow within the digital finance space.

With a strong emphasis on regulatory compliance, Bitlocus helps clients navigate legal requirements through KYC/AML integrations and adherence to global standards. Positioned as a strategic partner, Bitlocus reduces barriers to crypto adoption, providing end-to-end support that enables clients to expand their offerings and remain competitive in a rapidly evolving market.

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Hi @AfriCred. It is good to see proposals coming through. Can you please talk about the management of the pool? Is this an asset management style company where there is a dedicated team of portfolio managers with transparent reporting or is this a loan to an entity that takes risks on its own books? How are defaults handled? Do you have any audits? Bios of the management? Track record? Thanks and good luck!

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Can you please talk about the management of the pool? Is this an asset management style company where there is a dedicated team of portfolio managers with transparent reporting or is this a loan to an entity that takes risks on its own books?

AfriCred operates with a lending-focused pool management approach rather than a traditional asset management structure. It does not have dedicated portfolio managers; instead, it assumes the risk for loans issued on its own books. AfriCred primarily provides financing to MSMEs across Africa, backed by flexible collateral options, structured repayment terms, and proactive loan collection. This approach ensures that loans are supported by collateral, enhancing security and enabling sustainable financial solutions for underserved businesses in the region.

Bio’s of the management:

  • Djigui Diallo (Founder, CEO) : 18+ years in commercial banking, financial planning, and accounting across Africa.
  • Mariam Konate: Chief Marketing & Communication Officer and acting as Executive Director, + 5 years of experience
  • Obèd De-djekounyom (COO) : 5+ years in web and mobile app development; experienced in business development, incubation, marketing, and corporate finance.
  • Sadeck Sanoko (CTO, DApp Development) : 6+ years leading blockchain teams; experience in consulting and economic empowerment in the global south.
  • Arturas Svirskis (Advisor) : 11+ years in blockchain, fintech, and green energy; investor, consultant, and entrepreneur.

Track record

  • Total Value of Loans Issued: $1.26 Million

  • Total No of Loans: 810+ loans disbursed since May 2024

  • Waiting List: 271,750 (Showcasing High Demand)

  • Monthly Recurring Revenue: $15,000

  • Revenue Growth: Achieved 355% growth in MRR

  • Low Risk Lending: A default rate below 3% due to a collateralized loan model back to a liquidity deposit disbursed by borrowers representing 20% of the loan portfolio and we are currently working on AI-driven credit scoring system.

How are defaults handled?

Defaults are managed through a liquidity deposit, which acts as a safeguard to cover any missed payments or losses. This reserve fund ensures that there is available capital to address defaults, protecting the overall pool and minimizing financial risk.

Do you have any audits?

Yes, we conduct regular internal audits

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Hi @AfriCred - thanks for the post and for your replies! I had a few follow-up questions here:

In terms of deal structure and the offering:

  1. You mention that your default rate has been less than 3% due to a liquidity reserve of 20% posted by borrowers. Just to confirm, this 3% default rate is after the 20% reserve has been utilized? Or is the 3% covered completely by the liquidity reserve?
  2. Since your default rate has been less than 3% to date, how do you expect to achieve a 1% default rate for this fund?
  3. Is the 20% liquidity reserve at the borrower level the only level of subordination you envision? If so, how do you plan on allowing for cross-collateralization to protect the overall portfolio from losses? Or does AfriCred intend on funding a junior tranche, thus creating this portfolio-level protection? What would the senior LTV / advance rate be, if this is the case?
  4. It’s interesting to hear that you have a team on the ground in Africa, as this is a critical aspect of lending to emerging markets. Can you speak more about the team on the ground and any partners you have set up for servicing / collections? Is this all done in-house?
  5. Very nice to see that you offer micro-insurance on the loans. Could you please speak a bit more about this? Who is your insurance partner? How is the insurance triggered? Who’s risk does the insurance protect? What are the typical coverage levels of the insurance? What are the fees and costs associated for the insurance? I ask this because insurance can of course be quite interesting if protecting principal losses for the investors.
  6. You mention a particular focus on import/export trade finance. What does your origination growth strategy look like? How many loans do you intend to finance in 2025 and beyond?

In terms of fundraising:

  1. You mention a pool size of $1M. Do you intend to raise a larger amount if you can? What are the plans for growth of this pool?
  2. Have you received any commitments, whether soft or hard, from the investors you are currently in conversation with? Has your Sales and Investor Relations Team received any feedback from these prospective investors related to investing on-chain?
  3. Will you be looking to bring on the current AUM of $1.2M on-chain through the Centrifuge platform? Or will this remain outside of the platform?

Thanks and looking forward to your response!