ImpactAlpha, May 16 – M-KOPA helped build Africa’s off-grid, pay-as-you-go solar market. Now the The Nairobi-based company brands itself as a fintech company, offering digital financial services that support the livelihoods and income generation of underserved borrowers.
It provides mobile phone, vehicle and rooftop solar financing, health insurance, and other types of loans and credit to three million people across East and West Africa.
M-KOPA has raised $55 million in a new equity round led by Sumitomo Corp. Blue Haven Initiatives, Lightrock and others participated. It also secured $200 million in debt, led by Standard Bank, with participation from Mirova SunFunder, international development banks the IFC, FMO, BII and others. The debt repayment terms reward M-KOPA for boosting reach and lending to women borrowers and for electric mobility and clean energy access.
Lendable has been appointed to verify M-KOPA’s impact progress for the latest round of debt.
Strategy pivot
Early movers in Africa’s off-grid solar market have shifted their strategies as the sector and technologies have evolved. In 2019, M-KOPA began moving away from solar services into broader tech-enabled financial services, primarily for low-income and unbanked Africans. M-KOPA now only offers solar financing in Kenya.
It has retained its focus on underserved customers, unlike other providers, which have moved upmarket.
M-KOPA’s basic credit product allows customers to buy “productive use” assets, including cell phones, and other essentials by making a small deposit, then making mobile payments. It then offers larger loans, health insurance and other services to repeat borrowers.
Its outreach model is based on a network of more than 10,000 in-person agents, through which the company has facilitated more than $1 billion in credit since launching in 2011.