Smartphones are Africa's gateway to financial inclusion – report
Across sub-Saharan Africa, financial exclusion remains widespread. According to the report, 62% of adults lack a formal financial account, 88% have never borrowed from a formal financial institution, and 67% do not own a smartphone, largely because of affordability.
Brendah Nambalirwa Tzadok ( centre), General Manager of M-KOPA Uganda, with Romeo Jjuuko (right), Head of Partnerships at Turaco Insurance Company, during the launch of the M-KOPA Uganda 2025 Impact Report in Kampala. (Courtesy photo)
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For millions of Africans working in the informal economy, owning a smartphone is no longer just about making calls or browsing social media. Increasingly, it is becoming the first step into the formal financial system.
That is the central message emerging from M-KOPA's 2025 Impact Report, Pathways to Progress, which argues that affordable smartphone financing is transforming livelihoods by opening doors to credit, insurance, digital payments and income-generating opportunities.
Across sub-Saharan Africa, financial exclusion remains widespread. According to the report, 62% of adults lack a formal financial account, 88% have never borrowed from a formal financial institution, and 67% do not own a smartphone, largely because of affordability.
M-KOPA says its business model is designed around these realities. Instead of relying on traditional collateral or formal employment records, customers make a small deposit and repay for smartphones or electric motorbikes through affordable daily instalments that match irregular incomes common among informal workers.
"Our mission is to make financing for everyday essentials accessible to everyone," the report states, describing its target market as "Every Day Earners", that is small traders, boda boda riders, teachers, artisans and other self-employed Africans who are often overlooked by conventional lenders.
The company says it has now served more than seven million customers across five African countries and unlocked over US$2 billion in cumulative credit since launching in 2010. More than six million customers have acquired smartphones through its platform, while three million remain active customers.
According to the report, 70% of customers now use their M-KOPA-financed products to generate income, while 59% say they are earning more than before. Overall, 86% reported an improvement in their quality of life, reflecting gains in business growth, access to information and household financial resilience.
In that vein, M-KOPA Uganda has introduced health insurance access to its customers alongside new smartphone upgrade benefits, in a move aimed at extending financial inclusion and improving the lives of customers beyond device ownership.
The new benefits were unveiled recently at the company's offices in Kampala under its "More Than a Phone" campaign.
The initiative positions a smartphone as more than just a communication tool by bundling affordable data, broken-screen repair and replacement services, digital financial services and hospital insurance into one package.
The expanded offering is intended to ensure customers continue benefiting from essential services long after purchasing the phone devices, while making insurance and financial products more accessible to people who have traditionally been excluded from formal financial systems.
During the launch, Brendah Nambalirwa-Tzadok, the General Manager of M-KOPA Uganda, said the company's vision is to enable customers to use smartphones as tools for economic empowerment rather than simply communication.q
Nambalirwa noted that the company's latest impact report shows that 86 percent of customers surveyed reported an improved quality of life after acquiring M-KOPA smartphones, with many using the devices to build businesses, access markets, sell products and improve household incomes.
She added that the phones have become an important driver of economic transformation for thousands of Africans.
For Nigerian rice trader Suliyat, access to a smartphone helped expand her business while digital loans enabled her to increase stock and contribute more to household expenses.
"I can support my husband with household expenses, pay the kids' school fees, and grow my business," she says in the report. "With my M-KOPA smartphone, I keep in contact with suppliers, manage my salesgirls, and even post TikTok videos of my food."
The report also highlights progress in expanding access for women, who often face greater barriers to digital technology. Women now account for 40% of active customers and 45% of sales agents, while 43% of female customers said their M-KOPA digital loan was their first formal loan.
Beyond financial inclusion, the company is positioning itself within Africa's green transition. It has financed more than 4,000 electric motorbikes in Kenya, helping riders reduce fuel and maintenance costs while cutting emissions. The company is also refurbishing smartphones to reduce electronic waste and lower the cost of devices for first-time users.
For many informal workers, the report suggests, the smartphone has become much more than a communication device. It is evolving into an entry point for financial services, entrepreneurship and economic resilience—bringing millions who were once excluded closer to the mainstream economy.