Xend Finance, a Nigeria-based decentralized finance (DeFi) platform for credit unions and cooperatives, has secured new partners and funding as it prepares for its bid to bring high-interest savings opportunities to Africa.
Set to launch its mainnet in March, the firm announced Tuesday that it has partnered with software service provider TechFusion Africa and will make its services available to TechFusion’s 5,000 credit union members. Xend has also secured new investors led by NGC Ventures and Haskhey, bringing total investment in the company to date to $2 million.
The Xend platform launch was announced in November 2020, alongside a $1.5 million strategic funding round. The platform is backed by Binance, Google Launchpad and others.
According to Xend CEO Aronu Ugochukwu, credit unions and cooperatives can deposit their funds on the platform, where they will be converted to stablecoins – cryptocurrencies backed by traditional assets like the U.S. dollar.
“We’ve created a platform to enable cooperatives and credit unions to earn high yields through stablecoins,” Ugochukwu told CoinDesk.
Credit unions both at the institutional and community levels will have access to the platform and, by saving credit union funds in stablecoins, these groups can earn higher interest, he said.
“Traditionally, credit unions offer an interest rate of 1% annual percentage yield compared to the possible 15% available through Xend Finance,” said Marilyn Modupe Jiwalde, head of sales and marketing at TechFusion Africa.
The goal is to help protect the earnings of African citizens from local currency devaluations and unstable economies, Ugochukwu said, pointing to Nigeria, where people are using crypto as a hedge against inflation. A Bloomberg survey of investors and analysts concluded that Nigeria’s central bank may devalue the local currency, the naira, by as much as 10% in 2021.