Dec 10, 2024

How M-KOPA is Driving Financial Inclusion in Nigeria Last updated: 09/12/24 SHARE Financial inclusion remains a pressing issue in sub-Saharan Africa, with about 75% of adults excluded from formal financial systems. In Nigeria, Africa’s most populous country, this challenge is magnified by barriers such as identity verification, credit scoring, and access to collateral. Enter M-Kopa, a leading connected asset financing platform that’s breaking these barriers with innovative solutions tailored to everyday earners. On the recent episode of our podcast show, the Labari Media Podcast, we spoke to Babajide Duroshola, general manager of M-KOPA Nigeria about the work the company is doing in the country. Bridging the Gap with Pay-As-You-Go Financing M-Kopa offers a pay-as-you-go model that makes digital assets like smartphones, cash loans, and data bundles accessible. “We focus on everyday entrepreneurs—individuals who earn daily through services or trading. By enabling micro-payments, we ensure ownership is both affordable and flexible,” explained Babajide. Through this model, customers pay a small deposit—typically 17% of the asset’s total cost—and clear the balance in manageable daily installments. This flexibility extends to repayment challenges: customers who face financial difficulties can return the device, cancel their loan, and even reclaim their deposit. Partnerships Powering Financial Inclusion M-Kopa’s success is underpinned by robust partnerships. Collaborations with telecom giants like MTN and Airtel enable the distribution of 4G-enabled smartphones, bridging the digital divide in underserved areas. Additionally, partnerships with payment platforms like Paystack streamline transactions, while collaborations with InsurTech firms embed added services into their offerings. “We believe it takes a village,” Babaji emphasized. “Our partnerships allow us to deepen our reach, move customers from 2G and 3G to 4G, and support broader economic inclusion.” Tailored Solutions for Nigerian Realities Operating in a diverse market like Nigeria requires customization. Unlike Ghana, where mobile money is widely used, Nigeria’s payment landscape relies more on virtual accounts, USSD codes, and debit card transactions. M-Kopa adapts by offering personalized virtual wallets for seamless payments, regardless of the provider. We aim to deepen our relationships with communities and extend credit to underserved areas like Abuja, Kano, and Nassarawa Babajide Duroshola, General Manager, M-KOPA Nigeria Closing the Gender Gap M-Kopa is making strides in empowering women, a demographic often sidelined in financial services. “Women are 20% less likely to own a smartphone in sub-Saharan Africa,” noted Babajide. Through partnerships with organizations like the Bill and Melinda Gates Foundation, M-Kopa has increased its female customer base from 28% in 2020 to 41% today in Nigeria. The company also invests in women as direct selling agents, creating earning opportunities and tapping into their effectiveness in onboarding reliable customers. Expanding Horizons Looking ahead, M-Kopa is set on expanding its footprint across Nigeria. Having started in Lagos, it now operates in five locations, including Kwara, and plans to grow to 26 locations by 2025. “We aim to deepen our relationships with communities and extend credit to underserved areas like Abuja, Kano, and Nassarawa,” Babajide shared. Engaging Regulators for Long-Term Growth Navigating Nigeria’s regulatory landscape is integral to M-Kopa’s strategy. The company works closely with regulators to secure licenses, contribute to policy development, and promote inclusive growth. A Vision for 2025 As 2025 approaches, M-Kopa’s priorities remain clear: scaling its services, introducing new products, and making financial inclusion a reality for millions more Nigerians. Through innovation, partnerships, and a deep understanding of local needs, the company is well-positioned to transform lives and communities.