After more than a decade of investment and operation throughout Africa, M-KOPA, the Nairobi-based fintech powerhouse, accomplished a significant milestone by becoming profitable in 2024.
The corporation generated a profit of KES 1.2 billion ($9.2 million) in 2024 after losing KES 3.2 billion ($24.7 million) the year before. It was one of Kenya’s fastest-growing businesses and a milestone for Africa’s digital banking sector, expanding 66% to KES 53.7 billion ($416 million).
Profitability driven by expanding digital finance platform
M-KOPA developed into a digital finance platform after providing solar home systems on credit to low-income people. Mobile phones, cash loans, and insurance are offered to millions in Kenya, Uganda, Nigeria, South Africa, and Ghana.
The company attributes profitability to strict cost control, rigorous credit underwriting, and robust demand for its core services. M-KOPA Managing Director Mayur Patel said, “Achieving a profit for the first time in 2024 reflects our continued commitment to building a long-term, impactful, and sustainable business”.
Smartphone financing fuels growth and customer reach
One of the primary strategies contributing to M-KOPA’s expansion is its smartphone financing model, which was released in 2022. The company provides pay-as-you-go smartphones, enabling customers to pay a deposit to activate the device and make payments over time, in collaboration with renowned manufacturers such as Nokia and Samsung.
This strategy has grown its customer base and supported digital services like loans and health insurance. Nena Sanderson, Chief Product Officer, said the company temporarily locks off users during payment lapses without collecting late penalties to reduce default rates.
Since 2011, former Vodafone executives Nick Hughes and Jesse Moore have invested over $250 million to establish M-KOPA as a blueprint for sustainable African fintech growth. According to recent financial findings, digital credit solutions can serve the continent’s large population of “everyday earners.”