Afrimarket

A $2.2 million preferred equity investment in Afrimarket, an innovation which sought to increase remittance flows to West Africa, especially regional and rural areas, through a cash-to-goods approach and reduced sender costs. It shut down operations in 2019.

Afrimarket provided a low-cost cash-to-goods service for European migrants to send remittances to West Africa. The company benefited both remittance senders and recipients in West Africa. Afrimarket offered senders commission charges that are over 20% lower than average, since Afrimarket was able to offset lower fees through recouping revenue from partner merchants. There is evidence that lower fees and a cash-to-goods approach increase remittance flows from senders, which in turn benefit recipients. Recipients also benefited from the quality and breadth of the products on Afrimarket’s platform, which comprised 10,000 SKUs from accredited retailers.

Afrimarket had a unique solution that applied an eCommerce approach to solve a remittance problem, backed by merchant and money transfer operator partnerships, and a strong distribution and logistics operation. The investment had the potential to amplify the contribution of remittances to development in West Africa. GIF’s investment was designed to enable Afrimarket to build out their distribution operation and acquire new customers, thereby increasing Afrimarket’s social impact.

Afrimarket was a for-profit company that worked in countries with average incomes significantly below $5 PPP/day. 50% of Afrimarket’s beneficiaries were in areas outside capital cities, which have average incomes below $3.50 PPP/day. Afrimarket provided pro-poor products: 70% of its sales were food, and the top 9 products sold were in the food and hygiene categories. Afrimarket occupied a unique niche between remittances and eCommerce. Afrimarket’s cash-to-goods model served as a complement to traditional money transfer operators.