Impact investors FMO and BlueOrchard back Ghana’s digital lender Fido in $30M Series B round
Fido claims to have served a million customers and extended over $500 million in loans across Ghana and Uganda.
Digital lending platforms have become an easy and swift alternative source of credit for microenterprises and individuals overlooked by traditional banking institutions. These platforms have turned into a lifeline for millions of underbanked and demand will keep growing, pushing the value of the digital lending platform market in the Middle East and Africa to reach $2 billion in the next five years, recording a four-fold growth since 2021.
This is the market opportunity Ghanaian fintech Fido plans to tap as it explores new markets in East and Southern Africa, sustained by fresh $30 million Series B debt-equity funding. The new capital includes a $20 million equity injection from global impact investment manager BlueOrchard and Dutch entrepreneurial development bank FMO.
Initially launched in 2015 by three Israeli entrepreneurs — Nadav Topolski, Tomer Edry and Nir Zepkowitz — to offer loans over mobile phones, Fido has over the years introduced other products, including savings, bill payments and smartphone financing, to grow its revenue streams.
The fintech is among a sizable number of companies in the African digital lending space, including venture-backed Branch and Tala, that are tapping mobile technology and alternative data sources, like mobile money transaction histories, to offer instant micro-loans to individuals and small businesses that are often unable to access credit from formal banking institutions.
Unlike lending apps, banks often loan to active customers, require collateral and involve lengthy processes that include paperwork. This has made micro-lenders an alternative, but expensive, source of capital even for small businesses, which Fido CEO, Alon Eitan, says “are the driver of economies, especially in sub-Saharan Africa, yet they get so little tools to grow.”
“A majority of the population in sub-Saharan Africa are either unbanked or underbanked, and for a lot of the customers that come into our ecosystem, we are probably their first-ever interaction with financial services. We take them from zero financial footprint to the point where they’ve built a whole financial backbone within an ecosystem where they can get credit, insurance, make savings, buy mobile phones and do their business,” said Eitan.
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