M-KOPA Helps 10M Africans Build Credit via Smartphones

Millions of Africans who could never qualify for a bank loan are now building credit scores simply by paying for their smartphones.

M-KOPA, a Nairobi-based company, has turned smartphone financing into a gateway for financial inclusion. Since 2020, the company has helped nearly 10 million people across Africa access more than $2 billion in credit.

Here's how it works: customers buy a smartphone on credit and make small daily payments. Every single payment becomes a data point that builds their credit profile. Someone making daily payments for 30 days has already created 30 separate credit signals.

"We are not selling them a phone," says Faraimose Kutadzaushe, M-KOPA's chief financial officer. "We are selling them more than a phone. It gives you the ability to qualify for things you would otherwise not qualify for."

The impact reaches people who need it most. Half of M-KOPA's customers live on less than $5.50 a day. For 38% of them, this is the first time they've ever accessed formal credit from any financial institution.

The World Bank reports that only a quarter of adults in low-income countries use formal credit, while 35% rely on borrowing from family and friends. M-KOPA's model offers a different path forward.

After proving themselves with smartphone payments, customers can access digital loans for emergencies, business needs, or education. The company processes more than one million repayments daily and adds 10,000 new customers each day.

Nigeria has become one of M-KOPA's strongest markets. While customers need a new smartphone every few years, they can borrow cash multiple times if they repay on time. The cash lending business has grown faster than smartphone sales.

The Ripple Effect

Building a credit history changes lives beyond just accessing loans. Customers gain dignity and independence, breaking free from informal lending that often comes with high costs or uncomfortable social obligations. Families can invest in education, grow small businesses, and weather emergencies without depleting savings or relying on relatives.

The company turned profitable in 2024 after years of building its model, reporting $9.2 million in profit as revenue grew 66%. M-KOPA maintains default rates between 10% and 12% by using AI-driven models to assess risk and price loans fairly.

What started as smartphone financing has become a bridge to financial dignity for millions who were invisible to traditional banks.