'Thanks to My Smartphone, Business is Booming'

How an IFC partnership with fintech M-KOPA is expanding growth opportunities for women-led MSMEs in Kenya

By Thalia Holmes and Devon Maylie

Regina Musyoka used to sell an average of two pairs of shoes a day from her market stall in Nairobi, Kenya.

Now, using a smartphone, she sells five, reaches new customers through social media, receives payments through mobile money, and has access to credit to buy additional stock.

Historically, cash was often tight for Musyoka, who supports herself and four children by selling clothes, shoes, and electronics. She recognized that marketing her products on social media would likely boost her business, but she could never save the money to buy a quality smartphone. 

That changed when she discovered M-KOPA, an African fintech that allows customers in KenyaGhana, Nigeria, Uganda and South Africa to purchase productive assets such as mobile phones and electric motorcycles through micropayments. It also provides access to digital financial services, such as digital loans and health insurance.

Through M-KOPA’s , Musyoka paid a small deposit and her first smartphone. She has been paying off the balance in manageable instalments for the past 12 months, using the phone to grow her business, including by uploading photos of her products to Facebook and WhatsApp, where she’s winning new customers.

“Thanks to my smartphone, business is booming,” Musyoka said. 

With only seven percent of women-owned micro, small and medium enterprises (MSMEs) in Kenya estimated to have formal access to finance, these businesses often struggle to grow — or survive.

And yet, even a modest credit line can make all the difference to their fortunes. Research has shown that when small businesses have access to finance, they are better able to capitalize on investment opportunities that can foster growth. This is one reason why IFC has partnered with M-KOPA Holdings Ltd to expand access to finance for women like Musyoka.

"By working with M-KOPA to strengthen digital and financial inclusion, we can help connect more people in the region to economic opportunities. Access to products like smartphones are key tools to link users to other financial services, healthcare, and education resources,” said Jesman Chonzi, IFC Manager for Financial Institutions Group for Eastern Africa.

M-KOPA provides products to individuals with limited financial history or conventional collateral, allowing them to make micro-instalments over time. Smartphone customers in good standing can also upgrade and access additional products , including M-KOPA’s SIMUPESA product, which unlocks access to cash loans.

IFC provided a $50 million equivalent multicurrency loan to M-KOPA Kenya Ltd in May 2023. The debt facility is assisting M-KOPA to expand its financial services to underbanked consumers in Eastern Africa, enabling hundreds of thousands of lower-income customers, those in rural communities, and women – such as Musyoka – to purchase productive assets and get connected to the digital economy.

To date, M-KOPA has unlocked more than $1 billion in credit, significantly bringing digital and financial inclusion for over 4 million customers across its markets. Notably, 1 in 2 of its customers use their M-KOPA smartphones for income generation, with 82 percent reporting income growth.

M-KOPA also established Kenya’s first local assembly facility which has produced 1 million locally assembled smartphones since launching in 2023. The facility also added 300 recent graduates to M-KOPA’s workforce, 70% of whom were first-time job holders.

“The funding from IFC and lenders effectively allows us to scale and double the impact that we have, providing connected, life-enhancing assets to lower-income consumers across Africa. It further reinforces our commitment to fostering a positive environment and social impact to address systemic barriers that in turn improve gender digital and financial inclusivity,” said Jesse Moore, CEO of M-KOPA.

Under the partnership with IFC, M-KOPA has also committed to specific environmental, social, and governance targets, including commitments on the number of smartphones sold to and amount of credit unlocked for women.

This focus will help narrow the smartphone gap – mobile industry group GSMA estimates that women in sub-Saharan Africa are 30 percent less likely than men to own a smartphone.

The partnership is also expected to support increased economic activity: more than 2 million M-KOPA customers have used their smartphones to springboard into the digital economy, according to M-KOPA impact data from 2023. In Kenya specifically, the company increased its female smartphone customer base to almost 40 percent, with planned initiatives to address the gender gap in other markets.