M-Kopa, an African fintech company, has raised more than $250 million in new debt and equity capital to increase the range of financial services it provides to underbanked customers in Sub-Saharan Africa.
With assistance from The International Finance Corporation (IFC), funds managed by Lion’s Head Global Partners, FMO, Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder, and Nithio, Standard Bank Group, the largest bank in Africa, led and arranged over $200 million in sustainability-linked debt financing.
With pricing based on achieving social and environmental goals, the debt financing is set up to assist sustainability-related objectives.
Japanese company Sumitomo Corporation, which is providing $36.5 million to the entire financing, supported an additional $55 million in equity investment. Participating in the deal were Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude, Local Globe’s sister fund.
With the help of M-Kopa‘s credit model, customers may purchase solar power systems, electric motorcycles, cellphones, and other necessities right away for a minimal deposit before moving on to other digital financial services like loans and health insurance. Through a clever digital connection, the company’s technology embeds credit into the goods, giving customers instant ownership that they may recoup over time by making small payments. Through a direct sales approach with more than 10,000 agents, the company has sold over three million of these products.
Operationally, M-Kopa began in East Africa and in 2021 successfully branched out to Nigeria and, more recently, Ghana. M-Kopa reached almost three million users between 2020 and 2022, recording a compound annual growth rate of 85% in new customer acquisition, and providing underbanked customers in Africa with a total of over $1 billion in credit. According to the business, it is on target to add a further million subscribers by 2023.