African fintech company M-Kopa has successfully secured over $250 million in fresh debt and equity funding aimed at enhancing its suite of financial services for underbanked consumers throughout Sub-Saharan Africa.
In a significant move, more than $200 million of this financing comes in the form of sustainability-linked debt, arranged and led by Standard Bank Group, the continent’s largest bank. The initiative received support from various organizations, including the International Finance Corporation (IFC), Lion’s Head Global Partners, FMO, Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder, and Nithio. This innovative debt structure is designed to incentivize the achievement of environmental and social objectives, where pricing is directly tied to meeting these targets.
Additionally, M-Kopa has attracted $55 million in equity investment, with Japan’s Sumitomo Corporation contributing $36.5 million to this fundraising effort. Other participants in this funding round include Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude, a fund associated with Local Globe.
M-Kopa’s unique credit model facilitates immediate access to essential products such as smartphones, electric motorcycles, and solar power systems through a nominal deposit. This model enables users to gradually transition to digital financial services, including loans and health insurance. By integrating credit into its product offerings via a smart digital connection, M-Kopa allows customers to achieve ownership instantly, which they can fulfill through manageable micro-instalments. To date, the company has sold over three million of these products through a direct sales model involving over 10,000 agents.
Initially launched in East Africa, M-Kopa has successfully expanded its operations into Nigeria in 2021 and more recently into Ghana. From 2020 to 2022, the company achieved an impressive compound annual growth rate of 85% in new customer acquisition, reaching over three million customers and disbursing over $1 billion in cumulative credit to underbanked individuals across Africa. M-Kopa anticipates adding another million customers by the end of 2023, solidifying its position as a leader in the fintech space.