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Standard Bank Invests Over $200m in M-KOPA

Anna Lyudvig
May 17, 2023, 12:29 p.m.
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Standard Bank Group, Africa’s largest bank, has led and arranged over $200m in sustainability-linked debt financing to M-KOPA, a leading fintech platform.

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Standard Bank Group, Africa’s largest bank, has led and arranged over $200m in sustainability-linked debt financing to M-KOPA, a leading fintech platform.

“Supporting M-KOPA is in line with our purpose of driving sustainable growth for Africa and her people. Financial inclusion not only enables economic growth, it also accelerates it. M-KOPA has, in a short time, managed to positively impact so many lives by enabling access to power and smartphone connectivity, which are a vital part of enabling the economic empowerment of all,” said Nick Riley, Corporate Financing Solutions at Standard Bank.

Another $50m in debt was secured from the International Finance Corporation (IFC), funds managed by Lion's Head Global Partners, FMO, British International Investment, Mirova SunFunder and Nithio.

A further $55m in equity investment was backed by existing strategic investor Sumitomo Corporation, which is contributing $36.5m to the total raise and will engage closely with M-KOPA on new growth markets and products.

Blue Haven Initiative, Lightrock, Broadscale Group and Latitude, the sister fund to Local Globe, also participated in the transaction.

“As a strategic investor, we are very excited to accelerate business growth through collaborative efforts in business development. By leveraging each expertise and resource, we believe this partnership will have a positive impact on both the financial and telecommunications sectors, ultimately enriching the lives of people across the continent.” commented Masaki Nakajima, Senior Managing Executive Officer, General Manager, Media & Digital Business Unit at Sumitomo Corporation. 

The financial proceeds will be used to expand its financial services offering to underbanked consumers across Sub-Saharan Africa.

M-KOPA’s fintech platform combines the power of digital micropayments with the Internet-of-Things (IoT) to provide customers with access to productive assets. In markets where individuals have limited pre-existing financial identities and conventional collateral, M-KOPA’s flexible credit model allows individuals to pay a small deposit and get instant access to everyday essentials, including smartphones, electric motorcycles and solar power systems, and then graduate to digital financial services such as loans and health insurance. M-KOPA's solution embeds credit into the product through a smart digital connection, giving customers ownership instantly, which they can pay off through micro-instalments over time. The company has sold over 3 million of these products through a unique direct sales model that includes more than 10,000 agents.

M-KOPA’s operations started in East Africa and successfully expanded to Nigeria in 2021 and, more recently, Ghana. From 2020 to 2022, M-KOPA recorded a compound annual growth rate of 85% in new customer acquisition. Today’s news coincides with the business reaching over 3 million customers and providing over $1 billion in cumulative credit for underbanked customers in Africa. The company continues to scale rapidly and is on track to acquire an additional million customers over the course of 2023. 

With this new funding, the business aims to grow its smartphone services, expand its model to new markets and extend its financed product set. In line with M-KOPA and its partners’ longstanding commitment to creating a positive impact, the debt financing is structured to support sustainability-linked goals with pricing that is linked to the achievement of environmental and social targets.

M-KOPA will also use the financing to drive women’s financial inclusion and reduce greenhouse gas emissions in its East African markets by increasing smartphone ownership among women and further developing its electric mobility solutions offering, respectively.

Jesse Moore, M-KOPA CEO and Co-founder, said, “At M-KOPA, we are working hard to create a positive environmental and social impact by systematically addressing the barriers to digital financial services. We have already unlocked $1bn in cumulative credit to over 3 million customers, and are proud of the thousands of local jobs we’ve created during tough economic times. As we continue to scale we remain committed to building a sustainable business and closing economic and digital gender gaps. We are delighted to have the support of new and existing investors who share our vision and mission”.

 

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