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Kenya - Africa

Power to the people

Whereas M-KOPA Solar was initially designed to cater to the needs of off-grid customers it is starting to make inroads in areas that are on the grid. The reason is simple - with a M-KOPA Solar system power is essentially free.



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M-KOPA Solar keeps shining in Kenya and it is continuously adding more products to the core product - solar power.

In October BESTSELLER FOUNDATION visited a local M-KOPA shop in Ukunda in Kenya to meet Deenah Kawira – Business Manager at M-KOPA – and also to talk to customers to find out how they use it.

“Peter! How are you? We haven’t seen you in two weeks – have you been watching too much TV?” Peter’s face cracks in to a big grin as he jumps up the steps to the M-KOPA shop in Ukunda. The staff who called him in are laughing too. Peter is a good customer at the M-KOPA shop and he knows everyone there – and they know him. He is 28 and works as a motorcycle driver – transporting people and goods locally. His job is among the lowest paid in Kenya – but his earnings were enough for him to buy his first M-KOPA solar set with light bulbs, a radio, a torch and a phone charger. That is almost two years ago. Peter paid a deposit when he received the system and always paid instalments on or before time. For his reliability he was among the first customers to be offered a TV that he could connect to the core system. 

For his children the TV provides entertainment and knowledge – and it enables Peter to stay abreast with national and international issues. On average customers can receive 7-8 free-to-air channels in Kenya.

Why pay when it’s free
Whereas M-KOPA was originally designed for off-grid customers – people who were not near the national power grids – more customers are now in areas where they could link up to the national power grid. For Peter who lives in Ukunda – a medium sized town with power lines criss-crossing through the air wherever you go – the reason for choosing M-KOPA is simple; after paying for the system, the power that you harness comes from the sun, it covers virtually all of his and family’s needs and then it is absolutely free. 


 By looking at the use of credit on the phone M-KOPA can get an idea of what a potential customer’s disposable income is – and whether s/he is likely to be able to pay for the M-KOPA Solar system. 

Innovative credit rating
Deenah Kawira, business manager at the M-KOPA headquarters in Nairobi, explains that the way the solar systems and the associated products are sold is based on an innovative model for assessing the creditworthiness of customers. Customers that are often self-employed – mainly in the informal sector – and are considered the ‘bottom of the pyramid’. 
What this means is that M-KOPA is dealing with people that have no formal income, no credit history with a bank or service providers and who are therefore difficult to assess with traditional methods. But what these people – and virtually everyone from the top to the bottom of the pyramid – have is a cell phone. By looking at the use of credit on the phone, M-KOPA can get an idea of what a potential customer’s disposable income is – and whether that potential customer is likely to be able to pay for the M-KOPA Solar system within 12 months.

“And if you have just bought a sim card two weeks before you want to buy a M-KOPA Solar system, we will not accept you as a customer,” says Deenah Kawira. 



Cheetahs, Giraffes and Tortoises
M-KOPA solar offers a solar system that includes a radio, two LED light bulbs (more can be added), a (universal) phone charger and a LED torch. The system costs $200 USD – customers pay a deposit of $35 USD up front and then have 12 months to pay the remainder (equivalent to instalments of $0.50 USD per day). The system works with Kenya’s mobile banking system – MPESA – and each system has a sim card and a phone number. This allows M-KOPA to switch off the system in cases of non-payment. 

Customers are divided into different categories depending on how reliable they are when it comes to paying for the system. ‘Cheetahs’ pay on or before time and usually finish before the date stipulated in the contract. ‘Giraffes’ don’t miss an instalment and will pay for the system on time – but not before time. ‘Green tortoises’ pay more or less on time, they may miss one or two payments, but do manage to catch up – occasionally with some encouragement from M-KOPA staff. ‘Red tortoises’ rarely pay on time, they may attempt to tamper with the system or sell parts of it and M-KOPA staff have to consistently monitor red tortoises and remind them of paying. Red tortoises cannot purchase any additional products from M-KOPA.

The M-Kopa village
In Makongeni village off the main road on the way to Lunga Lunga on the Tanzanian border it seems that almost every house has a solar panel on top of their thatched roofs. And most are happy to open their doors and share their views on the M-KOPA Solar systems.

In one house lives Yussuf. He is five years old and his mother bought an M-KOPA Solar system a little over two years ago. One of the LED bulbs that come with the system hangs in a corner of their house – a basic clay structure with a thatched roof made from palm leaves (makuti). Under the LED bulb there is a small table and two plastic chairs and this is where Yussuf does his homework at night. His mother still keeps the kerosene lamp they used to use – an old tomato paste tin cut up and turned into a kerosene lamp. The fumes from the kerosene – especially when burning in a makeshift lamp like the one at Yussuf’s house – are a major health threat. Sitting next to a burning kerosene lamp is equivalent to smoking cigarettes according to some researchers. And kerosene is not only a health threat – it’s also expensive. M-KOPA estimates that an average household in Kenya spends around 100 Kenya Shillings ($1 USD) every day on kerosene. While Yussuf’s parents were still paying instalments on the M-KOPA Solar system they were paying 50 Kenya Shillings every day. So they were saving 50 Kenya Shillings from the day the bought the M-KOPA Solar system. Now that they have finished paying for it they have an extra 100 Kenya Shilling every day.


 Beauty runs a bar. She is saving money on kerosene and with the upgrade to her system she has managed to start a business of her own. 

Providing the ambience
Some 100 metres away from Yussuf’s house lives a lady who says her name in kiSwahili means Beauty. She has added several LED bulbs to her system and not only is her house lit but an open, thatched structure next to her house also has lights. There are a couple of rows of benches inside the hut and at night she plays the radio and turns on a couple of bulbs – and that provides the perfect ambience to serve her home brewed palm wine to customers. Beauty runs a bar. She is saving money on kerosene and with the upgrade to her system she has managed to start a business of her own.
Her house is smart – the inside walls are whitewashed, there are posters on them, a lounge set with embroidered covers dominates the sitting room and in her bedroom she has a bed with a real mattress on a delicately carved wooden frame. Business looks like it is going well.

On the main road close to Beauty’s house is one of the local shops (duka). The duka is a small hut where four poles at either corner keep a thatched roof in place. There’s music coming from the duka – the owner has an M-KOPA radio. She says she uses it for entertainment – but also that it attracts customers. Her house is across the street – and this house has a proper foundation, brick walls and a tin roof. At the back it has a 3-4 meter long sisal pole with an aerial – she has recently acquired an M-Kopa TV. She turns it on and flicks through the channels – there are seven. The children from the neighbourhood have already picked up that she’s home and a small group has gathered at the door. “They are here every night,” she says matter-of-factly. TV is a still a rare treat here and the kids marvel at the live images on the little screen. But with the introduction of the M-KOPA TV that could be about to change.

New products coming
Deenah explains that the next big thing for M-KOPA is the TV – and that the interest so far has been big. But the TV is not the only new thing that M-KOPA offers its customers. Because even if the access to solar power is what sells M-KOPA’s products, then the credit rating method that M-KOPA uses has also proved to be reliable. So M-KOPA has developed more products for its customers that they can buy on an instalment plan. 
“We develop products based on the feedback we get from our customers, “says Deenah and elaborates: “Often we hear from customers that they have issues with transport. Maybe some customers miss payments because the nearest MPESA agent is too far away – so we are now offering our customers bicycles on same terms as any other M-KOPA product they may have purchased. Other customers complain of having to fetch water in small buckets everyday – so now we offer water tanks that could be filled up harvesting rain water for example. We also offer an energy efficient cooking stove that uses a fraction of the coal that regular stoves do. So these products can save our money for our customers, they can help ease the burden of a range of everyday routines and in some cases they can also improve our customers’ health.”
In other words through a basic credit rating system developed to assess customers for a M-KOPA Solar system customers get access to a whole range of products selected and/or designed especially for them – products that they would normally rarely be able to afford.

Like anywhere else in the world people in Kenya like convenience. People with few means like convenience. And through a very simple business model M-KOPA offers convenience – green, money-saving, health improving convenience.