Standard Bank arranges US$202million funding for fintech platform, M-KOPA

Regarded as a pioneering and leading fintech platform, M-KOPA’s solutions provide underbanked customers with instant access to everyday products and services via its flexible credit model.

M-KOPA’s customers are able to acquire a broad range of productive assets such as high-quality smartphones, solar-powered systems, electric motorbikes as well as digital financial services, which include cash loans and health insurance, all accessed through digital micropayments, in East and West Africa, thereby stimulating financial access and inclusion.

Since its inception in 2011, M-KOPA has provided over $1 billion in credit to more than 3 million customers, thereby avoiding 2.2 million tonnes of carbon emissions through clean energy products and allowing almost 2 million individuals to access high-quality smartphones, positively impacting over 5.5 million lives on the continent.

Having well-defined growth ambitions, M-KOPA has entrusted Standard Bank Group (through its subsidiaries, Stanbic Bank Kenya and Stanbic Bank Uganda) to act as mandated lead arrangers for two sustainability-linked multi-currency facilities, a statement from Standard Bank Group dated May 15 reads in part.  

An unprecedented first in Africa, the syndication, valued at a total of USD $202 million, USD $165m in Kenya and USD $37m in Uganda, included seven lenders and is the largest syndicated facility in the Fintech sector in Africa and the largest syndicated sustainable finance facility in East Africa.

As Africa’s largest bank by assets, Standard Bank actively partners with clients over the long term to drive Africa’s growth. Over the course of its relationship with M-KOPA, Standard Bank Group’s pan-African reach and broad technical capabilities have demonstrated this by delivering tailored and innovative solutions to manage large complex transactions of this nature.

“Standard Bank Group remains an important partner in our growth journey, and they remain supportive of our aspirations to ensure that Africa continues to grow and ultimately thrive. Not only does Standard Bank provide an innovative and bespoke approach to our financing needs, but their knowledge and understanding of the African continent also enable us to achieve our ambitions,” says Jesse Moore of M-KOPA.

As a Fintech business that has achieved significant scale, M-KOPA demonstrates the African continent’s young, critical and vibrant population’s economic potential that makes for an attractive prospect for foreign investors. “Africa has significant economic potential, especially for foreign investors, which is why we remain committed to working with M-KOPA as it improves financial inclusion across the continent for millions of Africans who struggle to access credit,” says Nick Riley, Corporate Financing Solutions at Standard Bank.

For a business like M-KOPA to expand geographically, they require a reliable mechanism to raise funding in multiple currencies. Standard Bank’s ability to structure and arrange solutions that cater to several currencies means M-KOPA is well-equipped to hedge the risk of foreign exchange in its funding structure. “As the mandated lead arranger and largest funder to the syndication, Standard Bank was the only commercial bank able to bring together all the funders in a structure of this nature, something we are very proud of,” adds Riley.

Although the last decade has seen M-KOPA grow impressively, they have ambitions to reach a target of over 10 million customers over the next few years, as well as expand further into various African markets. This ambition calls for a considered effort to ensure sustainable growth over the coming years. Standard Bank supports these ambitions by incentivising M-KOPA to reach its environmental and social goals by embedding a series of Environmental, Social, and Green key performance indicators within the funding structure, spanning from gender equality to sustainability.

“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 solar-powered systems and smartphone connectivity, which are a vital part of enabling the economic empowerment of all,” commented Anneke Lunde, Executive: of Sustainable Finance at Standard Bank Corporate and Investment Banking.