Kopo Kopo: Bringing fintech to small business owners

“I like making women beautiful,” Rose told us early one morning while surrounded by the tools of her trade at her hair salon in Nairobi after finishing a special appointment with a customer.

After working at other salons for some time, Rose was able to open her own five years ago, which she has been running ever since. Through her business, Rose employs seven other women in addition to supporting herself, her husband, and her two children.

Not too long ago, Rose was a successful small business owner, but she was not satisfied. Many of her customers complained that they do not carry cash, and they wanted another way to pay for her services. Beyond that, Rose was always on the lookout for ways to improve her business. So, when a restaurant-owner friend mentioned a company that enabled small business owners to take mobile money payments from customers, Rose looked into it.

It turns out that the company, Accion partner Kopo Kopo, does a lot more than just mobile money. Another hugely popular offering is merchant cash advance. Essentially, Kopo Kopo advances a business owner a lump sum based on prior electronic business performance, and the business owner repays electronically based on how well their business is doing. By factoring in business owners’ prior electronic transactions, Kopo Kopo can anticipate their repayment capacity. This transforms a customer’s transaction history into a pseudo-credit history and is incredibly convenient, since advances are disbursed in minutes, require no personal guarantee, and come with no late fees or penalties. The business owner then selects the percentage of daily sales to dedicate to repayments via the Kopo Kopo digital platform, and Kopo Kopo automatically deducts that percentage each time the customer receives a payment. Since repayments are based on electronic sales, Kopo Kopo deducts a larger amount when sales are high and a smaller amount when they decline.


The massage room Rose was able to add to her salon with her merchant cash advance from Kopo Kopo.

Since she started using Kopo Kopo, Rose has taken a merchant cash advance on two different occasions. In that time, Rose has been able to add on a massage room as well as a secure cashier area. The massage room is a great investment in her business, and the secure point of sale location makes Rose and her employees feel safer. But why use Kopo Kopo? Why not work with the mobile money company directly or get a loan from the bank? Rose put it quite simply: “I like [Kopo Kopo] more than the bank. They are ready to help you, whenever you have a problem, they are ready.”

Rose went on to elaborate that Kopo Kopo’s speed and short terms for merchant cash advance were a big selling point, as well as the phone-based customer service and the flexibility of their terms. As Kopo Kopo explained to us, since they have access to so much of a business’s data, they are able to make determinations about when it is worth the risk to advance the cash to a merchant or not, whereas a traditional bank does not have access to that information.


Rose working in her salon.

It’s exactly that kind of innovative use of data that attracted Accion Venture Lab, Accion’s seed-stage investment initiative, to Kopo Kopo in the first place. Leveraging this alternative data allows Kopo Kopo to help small business owners like Rose to expand their business, reach out to new customers, and more. Venture Lab provides capital and support for innovative startups like Kopo Kopo that leverage technology like mobile and alternative data to offer financial solutions that are faster, more accessible, and more convenient to the underserved, such as mobile money for small businesses and merchant cash advance.

What about the future?

Rose plans to make use of some of Kopo Kopo’s other products, including their SMS-based targeted advertising, which would allow her to message customers based on prior purchases. She could offer discounts or let them know about last-minute openings. It’s amazing how much farther hard work can get someone when financial doors are open. Two years from now, Rose hopes to open a hairdressing school. She says, “I want to give other girls the knowledge I have.” Hopefully Kopo Kopo and Rose can make that happen together.

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