M-KOPA Summary

M-KOPA Solar brings together solar and mobile technology to provide affordable, clean and bright energy to off-grid villages in East Africa. M-KOPA provides smart credit to enable low-income consumers to access energy products and pay for them in instalments using mobile money platforms such as M-PESA.

Solar lighting systems can provide bright, clean and free energy provided the upfront cost can be met. Despite the advance of technology, consumers who earn less than $2 a day do not typically have sufficient cash available to purchase solar products and cannot afford the high interest rates that microfinance lenders often charge. 

 
     
  In 2010, Shell Foundation partnered with Jesse Moore, Chad Larsson and Nick Hughes (Nick previously founding Vodafone’s M-PESA platform) to test the potential for mobile payment systems to provide financial services to poor communities in Kenya. They realised that while just 15% of Kenyans are connected to the national grid, 96% of Kenyans are connected to mobile phones and resolved to use mobile technology to help finance affordable solar energy.  
     

 

Business Model

M-KOPA was formally established in 2011. Customers pay a small deposit for a solar home system that would normally retail for $200, including a solar panel, three ceiling lights, a radio and charging outlets for mobile phones.

Only 15% of Kenyans are connected to the grid but 96% have mobile phones

The balance is repaid in small instalments on a pay-as-you-use basis through M-PESA, a widely available mobile payment platform that is used by a third of the country.

The payments are cheaper than the equivalent daily cost of alternative fuels, and after just one year of payments, customers own their systems outright giving them access to cost-free energy for the lifetime of the product (typically four years).

M-KOPA struck a long-term partnership with Safaricom, Kenya’s largest mobile operator, to use M-PESA and its extensive dealer network to provide affordable solar power to low-income households, and is now rapidly growing across the country.

 

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