NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, January 21, 2016

For the last four years Kenya-based consumer finance company M-KOPA has enabled 300,000 low-income earners in East Africa to acquire home solar energy systems using its pay-as-you-go model.

The home solar systems feature a battery, light bulb, phone-charging facility and a chargeable radio. Customers make a US$34 deposit, and pay off the balance over a 12-month period in daily usage credits of about $0.50. Payments are made via mobile money. After one year, customers own the system outright and no longer have to make daily payments. GSM sensors in the equipment allow M-KOPA to regulate usage based on payments received. If a customer stops paying and runs out of credit, the system ceases to function.

A combination of innovative technology, an effective rural distribution system, a compelling value proposition, and a strong focus on customer care has made M-KOPA a success.

A greater variety of products

Now the company is taking a new direction to offer its customers a wider array of products such as bicycles, smartphones, water tanks and cooking stoves. M-KOPA managing director, Jesse Moore, says selling additional products is “the next phase of M-KOPA’s business”.