Fintech operator M-Kopa says it has disbursed more than R35bn in loans across its African operations, which include SA, underscoring the opportunity for alternative lending on the continent.
Over the years, Africa has become a hotbed of financial technology (fintech) innovation as entrepreneurs look to serve people that are usually not qualified for formal financial services such as banking. While many of these companies tend to do one thing well, such as mobile payments, insurance and cross-border payments, one area that has done well is lending, usually in micro form.
This week M-Kopa said that it had disbursed more than $2bn (R35.68bn) in credit to more than 7-million customers across Africa.
The company is a UK-headquartered fintech platform that provides cheap smartphones, digital financial services and other products to underserved customers in emerging markets, primarily across Africa. It has operations in Nigeria, Ghana, Kenya, SA and Uganda.
The “M” in its name stands for “mobile”, while “kopa” is Swahili for “borrow”.
The company began operating locally in late 2023 through pilot operations in Soweto, making SA one of its newer markets.
SA has seen growth in alternative lenders such as Retail Capital, Lula (formerly Lulalend) and Merchant Capital, who seek to offer lines of credit to people that do not qualify for loans or have largely been excluded by the country’s formal banking sector. Alternative lending is premised on using different metrics and data from those that banks use in making lending decisions.
Such players are also working to capture market share by reducing the need for getting expensive personal loans or turning to loan sharks, when people are in need of cash or have unplanned expenses to cover.
“Using over a decade of payment data and AI-driven analytics, M-Kopa has built detailed credit histories for millions previously excluded from traditional banking systems,” the company says.
Jesse Moore, CEO and co-founder of M-Kopa, said: “Reaching the $2bn credit milestone and being recognised as one of the world’s top fintechs by CNBC represents a critical inflection point, not just for M-Kopa but for how we think about sustainable growth in emerging markets.”
The company said it operates Africa’s largest direct sales network of more than 35,000 representatives across operating countries.
Since inception in 2010, the company has expanded beyond smartphones into e-motorbike financing, “demonstrating the scalability of its approach across the continent”.
The opportunity appears to still be large for those looking to get into the market.
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