NAIROBI, Kenya – There are nearly 34 million Kenyans living without electricity. M-Kopa Solar’s June Muli is in charge of customer relations. She is establishing a sense of ownership amongst Kenyan residents whose solar panels are provided by M-Kopa Solar.
The mission of this startup company is to reach off-grid customers by providing lightweight, safe power with green energy that’s affordable.
President Obama recognized M-Kopa Solar at the Global Entrepreneurship Summit in Nairobi. June Muli met with President Obama in July to discuss the M-KOPA III Solar Home System requiring a payment of only 40 cents a day.
This is the amount one might pay for kerosene but with the capability to charge a phone at the same time. People used to walk for miles to buy kerosene and charge their phones.
Thousands of communities are off the grid, while many more pay the high price of about $400 to use the national grid. The cost does not include lighting during occasional power outages. M-Kopa Solar does not malfunction in this way, and also stocks other green technology including batteries.
Muli was thrilled to have met President Obama and to have been acknowledged by the Summit. With a total of 225,000 lives reached by M-Kopa Solar since its upbringing in 2011, Muli imagines the help received by M-Kopa Solar may inspire or provide a great service to future entrepreneurs.
In M-Kopa Solar’s first year, nearly 50,000 homes were reached. It is growing at a rate of nearly 1,000 new customers per week with a 95 percent payback rate.
Customers who usually make fewer than two dollars a day have reduced their payment by $2.80 a month. Safaricom’s involvement with M-Kopa Solar reduced pricing for mobile payments by sharing promotional costs, distributing products Safaricom stores, and sharing revenue.
Of the customers who were surveyed, 92 percent claim M-Kopa Solar has improved their children’s ability to study. At least 94 percent claim the atmosphere in their homes is much cleaner without kerosene.
The set-up package for the M-Kopa Solar system is cheap. The company developed a “pay-as-you-go” plan in which a customer pays a small fee at first and then receives three lights, a radio, and a solar panel. Each week, the customer pays a small sum varied upon his or her financial status until the total amount of around $200 is paid.
The company’s mobile payment system is setup with M-PESA. The founders of M-Kopa Solar have been previously associated with M-PESA before combining their efforts in this startup company.
The power goes off when a customer does not pay his or her weekly installment. When the amount is paid in full, the customer becomes the rightful owner of the product.
M-Kopa Solar is reaching to the rest of Africa having successfully served 150,000 homes combined in Kenya, Uganda, and Tanzania since 2012. There are 500 systems sent to these countries each day. It has over a thousand sales agents and 85 customer service representatives sitting across East Africa.
In 2013, the Bill and Melinda Gates Foundations funded M-Kopa Solar with $4.6 million, while the Commercial Bank of Africa syndicates $10 million more from various lenders. M-Kopa Solar has become the first to receive the Zayed Future Energy Prize and is using $1.5 million in winnings to invest in a development program called M-Kopa University.
LGT Venture Philanthropy has been investing in M-Kopa Solar since the company’s early days with more funding provided by Lundin Foundation, Treehouse Investments, and Blue Haven Initiative. Oliver Karious from LGT Venture Philanthropy explains that “We have also seen first-hand what positive impacts their [M-Kopa Solar’s] products have on customers’ lives – making low-income households wealthier and healthier”.
– Katie Groe
Sources: Deutsche Walle, USAID, BBC, M-Kopa 1, M-Kopa 2, Bill and Melinda Gates Foundation, Impatient Optimists, Disrupt Africa