M-KOPA, a fintech platform that provides financing to underbanked people in Afrika, has announced that it has secured $75 million in Growth Equity funding. The funding round was led by Generation Investment Management and Broadscale Group.
M-KOPA's $75 million funding announcement comes at a time when the fintech platform has just crossed the 2 million customers milestone.
“We’re thrilled to partner with leading global investors with deep experience supporting growth-stage companies as we expand our platform to serve more of our customers’ needs. Our innovative model means we have enabled financial empowerment for over two million people already through micro-payments, but there are still millions of people across the continent that are stuck with limited economic options. With this funding, we will expand to more markets across Africa and scale to over 10 million customers in the next few years," said Jesse Moore, M-KOPA CEO and Co-founder.
Expanding beyond four Afrikan countries
According to a 2019 report by the World Bank, 85% of Afrikans live on less than $5,50 per day, a grouping of the Afrikan population that has been growing in recent years. This is in contrast to East Asia and the Pacific regions which have seen good results in their fight against extreme poverty in the process expanding the middle class from less than 1% to almost one-fifth.
Launched in 2011, M-KOPA’s financing platform enables underbanked customers to access a broad range of products and services without collateral or a guarantor. By combining the power of digital micropayments with the Internet-of-Things [IoT] technology to make financing more accessible, customers are enabled to build ownership of their assets as well as build their credit histories over time through a flexible payment model.
To date, M-KOPA has unlocked over $600 million in financing and enabled 2 million customers to access a diverse set of products including smartphones, solar lighting, solar-powered appliances, and digital financial services such as cash loans and health insurance. M-KOPA has recorded nearly 2.5X growth of new customers in 2021 and is projected to reach 3 million customers by the end of 2022.
The company has said that it plans to expand into additional countries across Afrika, beyond Kenya, Uganda, Nigeria, and Ghana.
Promoting financial and digital inclusion
The markets that M-KOPA targets have people who are underbanked and live in, in most cases, hard-to-reach areas. The company believes its 3.1% interest rate is the best anyone can offer especially to the customer base. With this, M-KOPA is certain that it is powering financial and digital inclusion.
M-KOPA was recently recognized as one of Fortune Magazine’s Impact 20, which highlights the top 20 global venture and private-equity backed companies tackling key social and environmental issues as part of their business model.
“By leveraging our unique data and market knowledge in serving customers over the last decade at M-KOPA, we’ve seen extraordinary growth across our markets in East Africa and our recently launched operations in Nigeria and Ghana. There is a massive opportunity in front of us to make everyday essentials more accessible by better matching fractional payment terms with customers’ daily or weekly earning and spending cycles," said Mayur Patel, M-KOPA’s Chief Commercial Officer.
— By Tefo Mohapi
