"Fido Expands Digital Lending Footprint Across Africa with $30M Investment"

Digital lending platforms have emerged as a rapid and accessible alternative to traditional banking for individuals and microenterprises often excluded from formal financial institutions. These platforms have become a financial lifeline for millions of underbanked individuals, with the demand expected to continue growing. Over the next five years, the digital lending platform market in the Middle East and Africa is projected to reach $2 billion, representing a fourfold increase from 2021. However, Ghanaian fintech company Fido aims to capitalize on this market growth by expanding into new regions within East and Southern Africa, backed by a recent $30 million Series B funding round. This financing includes a $20 million equity investment from BlueOrchard, a global impact investment manager, and the Dutch entrepreneurial development bank, FMO.

Founded 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 diversified its offerings to include savings accounts, bill payments, and smartphone financing, broadening its revenue streams.

Fido is part of a growing number of fintech companies in Africa, such as Branch and Tala, leveraging mobile technology and alternative data sources—like mobile money transaction histories to provide instant micro-loans to individuals and small businesses that are typically underserved by traditional banks. Unlike conventional banks, which often require collateral and have lengthy approval processes, micro-lenders like Fido offer a quicker, albeit more expensive, source of capital. According to Fido’s CEO, Alon Eitan, small businesses are crucial drivers of economies in sub-Saharan Africa, yet they lack the necessary tools to thrive. "In sub-Saharan Africa, a large portion of the population is either unbanked or underbanked. For many of our customers, Fido represents their first interaction with financial services. We help them establish a financial footprint, enabling them to access credit, insurance, savings, and even smartphones to run their businesses," Eitan explained.

Fido’s loan products come with embedded insurance, and the company plans to expand its insurance offerings to cater to business clients. This will include climate insurance for agricultural borrowers affected by extreme weather events, such as droughts and floods, as well as insurance for tradespeople. Fido offers loans ranging from $20 to $500 to individual customers, with larger amounts available to businesses based on their creditworthiness and operational needs. These loans, which must be repaid within six months, carry interest rates between 7% and 12%. Fido’s default rate, according to Eitan, is under 4%, a figure he attributes to the company’s sophisticated credit scoring system.

"We achieve these industry-leading rates through the use of mission-critical AI models across the entire loan lifecycle. Our acquisition model scores new customers using mobile device data and alternative sources, while our AI-driven fraud prevention and collection models further enhance efficiency," said Eitan.

To date, Fido has served one million customers, of which 40% are small businesses, and disbursed over $500 million in loans across Ghana and Uganda. In Ghana, the company claims nationwide coverage, while in Uganda—where it launched in December last year—it has already served 50,000 customers.

In 2022, when Fido raised $30 million in capital, Eitan noted that the company had processed 1.5 million loans valued at $150 million, serving 340,000 customers in Ghana. At the time, Fido was just beginning its expansion into Uganda.