TerraPay Payment Services

Debt : March 2024

BIO has granted a USD 10 M loan to TerraPay, a global digital payment company.

Amount

$ 10,000,000.00

Type of investment

Debt

Development impacts

Private sector consolidation/innovation
Financial inclusion

Beneficiary locations

Africa: Cameroon, Côte d'Ivoire, Kenya, Senegal, Tanzania, Uganda

Asia: Bangladesh, India, Philippines, Vietnam

Investment field

Financial Institutions

Activity

K66.19 Other activities auxiliary to financial services, except insurance and pension funding

Organisation

TerraPay Payment Services

Website

https://www.terrapay.com/

Domicile

Mauritius

Terrapay is a global digital payment company supporting transfer of international remittances instantly and at a low cost. Via its platform Terrapay acts as a payment infrastructure by facilitating transfer of very small value transfers (USD 300 on average) typically from migrant workers located in developed countries (senders) to their relatives in developing countries (receivers) who instantly receive the funds in their bank accounts or mobile wallets.

Instant money transfer from a sender to a receiver is made possible because Terrapay maintains funds within the receiving countries. Terrapay has to raise debt to pre-fund the transactions, so it can instantly pay the receiving partner. The BIO financing (USD 10 M out of a USD 75 M syndication led by IFC) will be used solely for this purpose.

Development impacts

Private sector consolidation/innovation
Fostering the integration of service providers across international remittances and domestic channels, by enabling interoperability through the integration of data and financial flows facilitated by the platform.

Promoting systemic changes in the international remittances market, by lowering barriers to entrants for new money transfer operators, promoting price reduction through competition and by enabling a lower-cost model. Supporting digitalization of banks and its interconnection with the digital ecosystem.
Financial inclusion
Enabling electronic low-cost transfer of funds, thereby encouraging a greater share of formal remittance payments and strengthening the link to financial inclusion by enabling individuals to access a wide range of financial and non-financial services through their mobile wallets. In sub-Saharan Africa, Terrapay transactions to mobile wallets are very small ($150 on average) and 35% of transactions are below $50 (with strong marginal utility).

E&S Impact

TerraPay will extend its exclusion list to match the one of EDFI, including the fossil fuels sectors.

Situation at the time of investment

Thanks to the involvement of previous Development Financial Institutions, TerraPay already has a sufficient capacity and detailed policies in place to manage its E&S risks, which are mainly related to data security and privacy. It has formalized a comprehensive list of HR policies. Also, its environmental footprint is mainly external since it uses third-party providers for its IT infrastructure.

Risk Category: C