Fido Expands Digital Lending Reach in Africa with $30 Million Funding to Serve the Underbanked

Digital lending platforms have emerged as a quick and convenient alternative to traditional banks, offering credit to microenterprises and individuals typically overlooked by the formal banking sector. These platforms have become a vital source of financial support for millions of underbanked people, with demand rising sharply. By 2028, the digital lending platform market in the Middle East and Africa is projected to grow to $2 billion, quadrupling its value since 2021.

Ghanaian fintech Fido aims to capitalize on this market opportunity as it seeks expansion into East and Southern Africa. This growth is supported by a recent $30 million Series B debt-equity funding round, which includes a $20 million equity investment from global impact investor BlueOrchard and Dutch development bank FMO. Fido has also previously secured $10 million from FMO.

Launched in 2015 by Israeli entrepreneurs Nadav Topolski, Tomer Edry, and Nir Zepkowitz, Fido initially focused on providing mobile-based loans. Over time, the company has broadened its services to include savings, bill payments, and smartphone financing to diversify its revenue streams.

Fido is part of a larger group of African digital lenders, such as Branch and Tala, that leverage mobile technology and alternative data—like mobile money transaction histories—to offer instant microloans to individuals and small businesses. Unlike traditional banks, which often require collateral and lengthy paperwork, these platforms provide quicker access to credit. However, micro-lenders tend to be a more expensive source of capital for small businesses, which Fido's CEO, Alon Eitan, says are vital to the economy but lack sufficient growth tools.

Eitan highlights that many people in sub-Saharan Africa are either unbanked or underbanked, and for many of Fido's customers, the platform is their first introduction to financial services. "We take them from having no financial footprint to building a solid financial backbone where they can access credit, insurance, savings, and even purchase mobile phones," he said.

In addition to its loan products, Fido embeds insurance into every offering and plans to introduce further coverage options for business customers, including climate insurance for agricultural borrowers and insurance for tradespeople. This expansion is aimed at providing more comprehensive financial tools to underserved sectors in the region.

Source: Annie Njanja / TechCrunch