Kenya’s competition regulator has approved U.S.-based fintech firm Moniepoint’s acquisition of digital lender Kopo Kopo, officials announced Tuesday.
The Competition Authority of Kenya (CAK) said the deal is unlikely to hurt competition in the growing digital credit market and poses no public interest concerns.
“The market structure will not change post-merger, since the acquirer is not involved in the same business activity as the target in Kenya,” the authority said in a statement. “The merged entity will increase competition in the market for digital credit that is dominated by a few players.”
Moniepoint, which provides digital financial services in Nigeria and the U.K., is making its first foray into the Kenyan market with the acquisition. Kopo Kopo, also a U.S. company, offers small business loans in Kenya via mobile platforms.
Under the deal, Moniepoint will acquire 100% of Kopo Kopo’s shares. The companies met the threshold for notifying CAK, which reviews mergers above a certain size.
CAK said the rapidly growing digital lending sector has increased Kenyans’ access to financing, especially for low-income and unbanked populations. Kenya now has 32 licensed digital credit providers.
But the market remains concentrated, with the top three providers — M-Shwari, Fuliza and KCB M-Pesa — commanding nearly 75% of the market, CAK said.
Acquiring Kopo Kopo’s small share will allow Moniepoint to bring more competition, the regulator concluded.
“This transaction will not elicit negative public interest concerns, specifically regarding employment,” CAK said.
Kopo Kopo’s 98 employees will keep their jobs under the deal, and Moniepoint plans to hire more people, officials said.