Social Issue

It is estimated that over 500 million people in Sub-Saharan Africa don’t have access to electricity. Most of these off-grid households rely on kerosene for lighting, which produces poor light, has toxic fumes and it is the cause of many fires and burn injuries. It is also estimated that each household can benefit from significant cost savings, representing between 10 to 20% of the household’s monthly income, from displacing kerosene and other energy costs related to charging phones.

Our Response

M-KOPA has developed a payment system that allows its clients to purchase productive assets using a convenient pay-as-you-go model. M-KOPA services low-income mostly rural households and it is estimated that around 50% of M-KOPA’s clients live on less than US$ 2 / day.

M-KOPA currently offers solar home systems comprising three lights, phone-charging facilities, and most recently a solar-charged radio. Customers make an initial deposit and then complete their purchase via instalments using M-Pesa mobile payments. After a year, they have complete ownership of their solar home systems and they can benefit from free solar energy for years to come.

In Kenya, M-KOPA has partnered with Safaricom to distribute their solar lighting products, whereby M-KOPA can benefit from the vast national network of Safaricom dealers and from advertising and branding synergies. M-KOPA has developed a proprietary technology platform that monitors via GSM technology embedded in each solar unit all aspects of customer behaviour, servicing, and payments. The real-time information that this system generates is a very powerful tool to control operational and payment risk.

Expected Social Impact

M-KOPA Solar aims to address the energy needs of up to 1 million low-income un-electrified households by 2018. Based on these growth projections, the loan that Netri is providing should enable close to 23,000 homes (over 100,000 people) in Kenya to benefit from safer, better quality, and cheaper lighting.