Challenge
Mobile money is at the core of Kenya’s economy. The country’s mobile money market exceeds $100 billion and includes more than 77 million individual accounts – more than Kenya’s total population.
But this dramatic growth poses a compounding problem for large portions of Kenya’s population, particularly its rural, remote, and other underbanked communities, where many people cannot afford digital infrastructure like smartphones to send and receive cash and cannot access the digital economy. The problem creates a conspicuous knock-on effect for a country where all digital connectivity, particularly mobile money, is increasingly necessary to support economic growth, not just for banking but also for accessing loans, insurance, and other financial products, which threatens to leave these communities behind economically.
Affordability has emerged as a key barrier to smartphone adoption in Kenya.
Solution and Impact
As a leading element of the United States’ growing partnership with Kenya, DFC has committed a $51 million sustainability-linked loan to M-KOPA Kenya Limited, a Nairobi-based financing company that is working to improve access to smartphones, primarily for Kenya’s low-income and underserved populations.
M-KOPA offers affordable financing through pay-as-you-go payment plans for smartphones, which links consumers to other financial services, healthcare, and education resources.
The new loan was announced in May 2024 during Kenyan President William Ruto’s State Visit to the United States. [White House Fact Sheet]
DFC’s financing builds on extensive U.S. engagement with Kenya, including with Silicon Savannah, a $1 billion tech hub modeled on Silicon Valley that is home to more than 200 startups. Its highly skilled workforce is already reinforcing cooperation between the American and Kenyan technology sectors. Partnerships with organizations like M-KOPA generate economic growth and innovative approaches to longstanding health, food, security, and service delivery challenges.
“Digital connectivity is a catalyst for inclusive economic growth, and smartphones are the most effective way to connect millions who would otherwise be excluded from the digital economy,” M-KOPA CEO Jesse Moore says. “We remain dedicated to supporting Kenya’s economic development through our products and services, contributing to financial inclusivity across the country.”
M-KOPA assesses it has already produced more than 1 million smartphones locally. The company believes that its work, in tandem with support from DFC and the government of Kenya, will allow it to expand its local production facility, creating hundreds of high-skilled jobs.
DFC’s loan is part of a wider initial $202 million, five-year financing facility for M-KOPA arranged by Standard Bank of South Africa that includes several other lenders. It will help the company continue strengthening Kenyans’ access to finance and connectivity.
And it demonstrates how the United States and Kenya, together, are drawing in the private sector to drive shared prosperity and innovation.
Time magazine ranked M-KOPA one of its 100 most influential companies in 2023 for its services to underbanked populations in Africa. More recently, the company was named as part of the Financial Times’ Fastest Growing Companies in Africa 2024 list for the third consecutive year.