Fido Secures $30 Million Series B Funding to Expand Digital Lending Across Africa

Written By : Leah De-Graft Takyi

In a significant boost for the fintech landscape in Africa, Ghanaian digital lender Fido has successfully raised $30 million in a Series B funding round, attracting investment from global impact investment manager BlueOrchard and the Dutch entrepreneurial development bank FMO. This new capital will enable Fido to expand its operations into East and Southern Africa, tapping into the burgeoning demand for accessible credit solutions among underbanked populations.

Since its inception in 2015 by founders Nadav Topolski, Tomer Edry, and Nir Zepkowitz, Fido has emerged as a key player in the digital lending space, providing mobile-based loans to microenterprises and individuals often overlooked by traditional banks. The platform has evolved to include a diverse range of financial products, such as savings accounts, bill payments, and smartphone financing, enhancing its revenue streams and customer engagement.

Fido’s growth is indicative of a broader trend in the Middle East and Africa, where the digital lending market is projected to reach $2 billion in the next five years, representing a four-fold increase since 2021. As financial institutions struggle to meet the needs of a significant portion of the population, digital lending platforms like Fido are becoming essential lifelines for millions.

“Our mission is to empower small businesses, which are the backbone of economies in sub-Saharan Africa, yet often lack the financial tools necessary for growth,” said Fido CEO Alon Eitan. “A majority of the population in sub-Saharan Africa is either unbanked or underbanked, and for many of our customers, we represent their first interaction with financial services.”

Fido’s innovative approach leverages mobile technology and alternative data sources, such as mobile money transaction histories, to provide instant micro-loans. Unlike traditional banks, which often require collateral and lengthy application processes, Fido offers loans ranging from $20 to $500 for individuals, with larger amounts available for businesses based on their specific needs and credit scores. The loans are repayable within six months, carrying interest rates between 7% and 12%. Remarkably, Fido boasts a default rate of less than 4%, attributed to its sophisticated credit scoring system.

To further enhance its offerings, Fido plans to introduce embedded insurance with every loan product, targeting additional coverage for its business customers. This includes climate insurance to protect agricultural borrowers from extreme weather conditions, as well as tradesman insurance for those in skilled trades.

Since its launch, Fido has served over one million customers, with 40% being small businesses. The company has disbursed more than $500 million in loans across Ghana, where it has established comprehensive coverage, and Uganda, where it has reached 50,000 customers since its launch there in December last year. Eitan expressed optimism about the company’s growth trajectory, stating, “Our hope is that by early next year, we will have crossed a billion in total disbursement, and the new funds will help us reach even more customers, creating a genuine impact.”

Fido’s success underscores the transformative potential of digital lending in Africa, where traditional banking systems often fail to meet the needs of the underserved.