Insights | Scaling digital financing with M-KOPA
As a young continent, most Africans are digital natives. Given a mobile phone, many young people across the continent could harness its digital power to provide lucrative services to other consumers or businesses. The missing piece is the liquidity to buy the phone and airtime for transactions. Traditionally underbanked and lacking a credit history, many would-be entrepreneurs cannot get started.
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This is the gap that M-KOPA fills. As a leading fintech, M-KOPA provides digital financial services and products to individuals with limited access to traditional banking. With its primary product being smartphones, M-KOPA offers flexible micropayments for its devices.
Despite the digital nature of its financing solutions, M-KOPA manually processed bulk mobile money payments to its extensive network of sales teams in the field.
This time-consuming system meant that accessing accurate transaction statements was a significant obstacle to effective reconciliation, adding an extra layer of complexity. M-KOPA sought a single solution to streamline payment processing and reconciliation procedures.
Onafriq’s solution made it easy for M-KOPA to:
- Efficiently disburse loans to customers.
- Pay sales team members at the click of a button.
- Reconcile statements in real time.
- Process payments seamlessly through one connection to Uganda's different telecom companies.
- Reduce errors in payment and reconciliation.
Onafriq’s solution has helped M-KOPA grow its business volume, says Sales Lead at Onafriq, Brian Mugisa. “M-KOPA’s monthly transaction volumes have grown 33% month-on-month in 2023. The significance of this increase in financial disbursements is very exciting.”
Equally exciting for M-KOPA is the cross-border expansion the system has enabled. “We designed a solution for M-KOPA in Uganda and are currently integrating it in Kenya. Scaling solutions that work across borders is at the heart of our ethos of making borders matter less,” said Brian Mugisa.
Brian Mugisa shares three key takeaways other businesses could benefit from:
The importance of focusing on measurable outcomes to track success. “M-KOPA can now measure return on its investment, and that’s so important when implementing any new payment system.”
The crucial role of efficient payment processing. “Solving all the challenges M-KOPA faced with a manual system has highlighted the importance of investing in streamlined payment solutions to save time, reduce errors, and improve overall operations.”
The place of customisation and consultation. “Onafriq's ability to provide a tailored solution to meet our client’s unique needs demonstrates the importance of customisation. Consultation is equally important. Understanding their unique requirements was essential in developing an effective solution.”
