Fintech & Ecommerce

Kenyan Fintech M-Kopa Raises $250M to Extend Financial and Sustainability Services

M-Kopa will use the new debt and equity funding to expand financial services offering to underbanked consumers across Sub-Saharan Africa, as well as reduce greenhouse gas emissions in Kenya and Uganda



Kenya-based fintech M-Kopa has secured over $250m in new debt and equity funding.

The $200 million in debt financing came from Africa’s largest bank Standard Bank Group, the International Finance Corporation (IFC), as well as funds managed by Lion’s Head Global Partners, FMO, Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder and Nithio.

The given debt financing will support sustainability-linked goals, having its pricing linked to the achievement of ESG targets.

Meanwhile, a further $55m of equity investment was mostly provided by Japan’s Sumitomo Corporation ($36.5m). Blue Haven Initiative, Lightrock, Broadscale Group and Latitude, the sister fund to Local Globe, also participated in the fundraise.

In addition, the startup partnered with IFC to expand its financial services to underbanked consumers in Eastern Africa. In particular, the partners target hundreds of thousands of women, lower-income customers, citizens of rural communities, and other underbanked categories in Kenya and Uganda.

M-Kopa’s credit platform uses debt to finance customers’ purchase of products and services it sells, such as smartphones, electric motorcycles and solar power systems. The company also provides loans and health insurance across four markets: Kenya, Uganda, Ghana and Nigeria.

Individuals can pay a small deposit and get instant access to everyday essentials, while the payoff occurs in micro-instalments. The system helps African consumers build their credit history over time. Default rates for M-Kopa loans are a little above 10%. At the same time, the firm has already sold over three million of these credit products through a direct sales model that includes more than 10,000 agents.

From 2020 to 2022, M-Kopa registered a compound annual growth rate of 85% in new customer acquisition. The company provided its three million underbanked customers with over $1 billion in cumulative credit. With the new funding, M-Kopa plans to expand the customer base by another million.

In addition, the startup aims to reduce greenhouse gas emissions in Kenya and Uganda, where its solar product is more popular. However, increasing women’s financial inclusion across the continent remains a top priority for the company. In 2020, when M-Kopa started selling smartphones in Kenya, about 30% of its customers were women. Now, the share is slightly over 40% but the objective is to reach over 60%.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.