M-Kopa provide "cheap" rent-to-own solar energy products to underserved rural residents who are off-grid or without access to stable electricity in Africa. Photo Credit:M-Kopa

M-KOPA: Leveraging on Mobile Access to Leapfrog Solar Power Distribution in Rural Homes

TANZANIA, EAST AFRICA – With over 277 million registered mobile money accounts in Sub-Saharan Africa, there is evidence that access to mobile technology has not only transcended beyond communication purpose, it has also broadened access to financial services, especially in rural areas. Africa is currently the global market leader when it comes to adoption and usage of mobile money. Most of the successes recorded in adoption and usage of financial technology have largely been from the East Africa region. It is also in this region that M-Kopa, a tech-savvy company has pioneered and leveraged on mobile technology uptake to provide and scale up renewable energy access in rural areas. Launched in 2012 by former executives behind M-PESA [the word ‘Pesa’ is Swahili for ‘money’], the world’s leading mobile payment platform; M-Kopa Solar [the word ‘kopa’ is Swahili for ‘borrowed’] is a fast-growing pioneer of the “pay-as-you-go” innovative technical solution that utilises mobile connectivity to provide “cheap” rent-to-own solar energy products to underserved rural customers who are off-grid or without access to stable electricity and who are low-income consumers in Kenya, Uganda and Tanzania. It also has a licensing arrangement with a partner company in Ghana. M-Kopa combines mobile payments with GSMA sensor technology to enable affordable financing of solar power systems and subsequent additional credit sales. The M-Kopa solar system, which costs $35 per unit, includes a solar panel, control unit, three low-energy LED light bulbs (one of which is a portable, rechargeable torch) and a rechargeable radio. The control unit also has a USB port for charging cell phones. The system works on mobile money and users make payment on their mobile phone. The GSMA censor in the M-Kopa system monitors and regulates usage and payment. If a user did not pay the daily credit, the device can be remotely turned off by M-Kopa. In the same manner, if the user pays up, the battery is remotely activated and the light comes on.

M-Kopa combines mobile payments with GSMA sensor technology to enable affordable financing of solar power systems and subsequent additional credit sales. Photo Credit: M-Kopa

There are different payment plans adopted across M-Kopa operating market – but the constant arrangement across is a lease-own payment model, which allows users to pay a certain amount of money at intervals before the system become theirs entirely. In Tanzania, users pay 50 cents per day for 15-16 months, after which they take ownership of the solar system. “The way that M-Kopa works is that you buy a solar home system which comes with a battery, a solar panel, a touch, a radio and phone charger  [in Tanzania] and the customer have to pay 50 cents a day for that devise,” Michael Davis, the Head of Rural Distribution and Agriculture at M-Kopa Solar, explains. “After users pay off the cost of the initial solar system, they progress to other products like stoves, water tanks, smartphones, solar television or an extra battery,” Davis says, adding that M-Kopa is currently trying to add fertilizer and a whole range of other products to its offering. The M-Kopa system can’t power all the rooms in a house but Davies says users can build on their battery capacity over time to enable them power other gadgets.

Scaling Up

M-Kopa currently serves over 500,000 households in Africa but believes that over 2 million people are enjoying its solar power light every night. Davies says two things have aided the adoption rate of M-Kopa Solar Home System over the years. “Firstly, the fact that the daily amount paid for M-Kopa light is the same as what most people are already paying for their energy. People are generally spending about 50 cents in a day on things like kerosene, batteries for their touch, candles, and paying of the shop to charge their phones. The difference is that M-Kopa is cleaner, better light and provides after sales service, plus you won it after 1-2 years of paying [depending on the payment plan]. Secondly, M-Kopa allows you to maendeleo [a Swahili word for ‘progress’] into other products such as TVs, smartphones, Jikos and tanks.” In 2015, the same year it launched in Tanzania, M-Kopa was selected as one of the five companies to get the Mastercard Foundation’s Fund for Rural Prosperity [FRP] grant.  The five-year grant will support M-Kopa in providing innovative credit services that are affordable and accessible to over 300, 000 people in rural Tanzania by the year 2020.

M-Kopa serve about 500,000 households in Africa. Photo Credit: M-Kopa

So far, Davies says the FRP grant has allowed M-Kopa add 10,000 additional households and experiment a number of different distribution and servicing models to expand its products across the southern islands of Tanzania. “We currently have about 30,000 customers in Tanzania – the smallest in all of East Africa. However, through this expansion intervention, we have also been able to increase our services in rural parts of Tanzania by opening 11 new service centres and employing over 100 commission-based sellers who are selling our devices through the regions. And that number is growing,” Davis adds.


M-Kopa’s customers are people who are off-grid and rely on kerosene lamps for light. However, these people are not particularly confined within a specific area or region – their locations are dispersed. According to Davis, this creates a big challenge especially in terms of sales and making the products accessible. However, he says the company is currently looking at effective territory planning that will allow it distribute its products to consumers effectively and efficiently. “We are looking at increasing our sales efficiency in regards to how we can reach and service customers in hard-to-reach places in a way that is commercially viable. We are trying to create a business which is scalable and profitable while servicing customers efficiently.” Another challenge is that the M-Kopa model requires good quality phone connection. M-Kopa sometimes battles with unreliable or un-existing telecommunication services in some areas where it wants to work. There are three major mobile operators in Tanzania. However, at times, there is limited mobile network coverage in some of the areas where M-Kopa products are available. M-Kopa is presently working in partnership with Vodacom, the biggest mobile operator in the country. But Vodacom doesn’t work in all parts of the country. Moving into new territories is another challenge for M-Kopa but Davis said M-Kopa has been able to compensate by taking time to educate potential customers about the product. “I think any product new to the market and require behavioural change is always a challenging product to sell because you are trying to break new grounds. About 15 or20 years ago, when the mobile phone was first introduced, people needed to be educated. So selling a product such as solar home system, the first point isn’t just about making a person desire the product, but also – if not importantly, understanding the product as well. To some people, it is the biggest investment they have made in their whole life.” “However, I think one of the things that have stand M-Kopa out is that we are always willing to try new approaches to what is a very big challenge. We have got a quite complex piece of hardware selling in a market that has never seen this before so it requires a lot of education. At the same time, we are also doing last-mile sales and distribution which is also very challenging itself. The organisation’s ability experiment and take a real entrepreneurial approach allows it to attempt to overcome challenges,” he says.

Working with Rural Communities

Michael Davis, the Head of Rural Distribution and Agriculture at M-Kopa Solar.
Photo Credit: Michael Davis

As the Head of Rural Distribution and Agriculture at M-kopa Solar, Davis spends a lot of time on the field trying new sales approach on the product. Since he is an Australian, RuralReporters.com asked how easy or difficult it is for him to get himself entrenched in the rural community he works in, since he has to understand Swahili – the local language – to communicate with potential customers. His Swahili is improving, he says, but adds that most times, he is almost always with someone who can help and translate for him. “At M-Kopa, we have around 200 commission-based sellers and 100 full-time staff  and about 97 of them are Tanzanians so when I am in the field, I am always with some Tanzanian staff and they also speak English as well.” One of the biggest things Davis has learned in his line of work, especially in rural areas, is to be able to relentlessly test new approaches and not pile resources into something that doesn’t really work. For people working or seeking to work in rural communities, here is Davies advice. “Products should be designed with users deeply in mind. Spend time with your customers – with the communities – to really understand their reality and needs. From there, you can quickly change your approach to what they are comfortable with,” says Davis. “Sometimes, the products or services for rural Africa are being designed from cities or the capital – from somewhere very far from the customers that they are trying to work with. To make progress, sit with your customers, learn quickly and work on the insights you have gained from them.”

Busayo Sotunde is a prolific writer with special focus on Business, Entrepreneurship, Reproductive Health and other development issues in Africa. Her articles have been published by different outlets including Investing Port and Ventures-Africa.com. She has a penchant for reading and sustainable development. Follow Busayo on Twitter @BusayomiSotunde

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