Aiming to address power challenges and provide innovative solutions to low-income households, M-KOPA, the pioneer of the pay-as-you-go model for solar panels and smartphones in East Africa, is rolling out its pilot operations in South Africa.
This comes five months after M-KOPA secured over $250 million in debt and equity to fuel its expansion across the continent.
M-KOPA, founded in 2010, has built one of the world’s most advanced connected financing platforms, deploying $1 billion in products and credit to financially excluded individuals. Now, it seeks to replicate its success built across Kenya, Nigeria, and Ghana in Soweto, South Africa’s township.
Choosing Soweto as the starting point is a strategic move, considering the township’s demographic alignment with M-KOPA’s product range, mainly catering to low to middle-income households. The company aims to bring its suite of smart products, including smartphones, electric motorcycles, and solar power systems, to offer much-needed relief in an area often disrupted by power outages.
Martin Macharia, a tech analyst, sees M-KOPA’s entry into the South African market as a natural stimulator. Despite economic strides, South Africa faces challenges such as frequent power outages and a significant portion of the population living without regular access to essential amenities. M-KOPA’s innovative solutions, proven successful in Kenya and Nigeria, are set to address these challenges, embedding itself within the community by partnering with local retailers and distributors.
M-KOPA’s business model is characterised by inclusivity, flexibility, and fairness. The company does not require collateral, guarantees, or proof of income, allowing customers to start using high-quality products with an ID and an initial deposit. The flexible payment system accommodates occasional missed payments without imposing steep penalties, providing options for customers to continue using their products while getting back on their feet. Additionally, what is advertised is what the customer pays, with the freedom to return the product at any time, get a deposit refund, and be released from payment obligations.
Jesse Moore, M-KOPA CEO and Co-founder said the company planned to expand to more markets across Africa and scale to over 10 million customers last year. South Africa now represents M-KOPA’s fourth-largest market, and the company aims to leverage its success in Soweto as a launchpad for a broader impact in the region. As of March 2022, M-KOPA had reached 2 million customers across four African markets, positioning itself as a dominant player in the innovative space. The latest funding injection sets the company on course to potentially become a unicorn in the near future.