M-KOPA Kenya Ltd., backed by a Royal Dutch Shell Plc-funded charity, sees sales of its solar-lighting system that allows users to pay by phone surging 13-fold as mobile operators roll out banking services in Africa.
The system, a panel powering lights and a phone charger, links to mobile banking services to allow customers to pay 40 Kenyan shillings (46 cents) a day to use it, M-KOPA says. The company plans to boost clients in Kenya to 100,000 from about 7,500 now, and expand abroad in future, Managing Director Jesse Moore said.
“East Africa is the right market for us,” Moore said in an interview in Nairobi last month. “I wouldn’t be interested in countries where there is no mobile money yet. What I bet on is four, five years from now there is a lot more mobile money happening.”
Vodafone Group Plc, Safaricom Ltd. and MTN Group Ltd. are extending phone banking services across Africa. M-KOPA uses the Safaricom M-PESA service to charge customers. About 15 million people use M-PESA in Kenya, where 80% of homes aren’t linked to the power grid. The 40 shilling-a-day payment is about 20% cheaper than burning kerosene for light, Moore said.
Customers pay a 2,500 shilling deposit for the equipment, which they can keep after a year. M-KOPA is also considering expanding the system into other East African countries.
“Tanzania and Uganda have quite positive sort of enabling environments for mobile money and that is why they are progressing,” Moore said in the interview. About 8 million use the services in Tanzania and 5 million in Uganda, he said.
The Shell Foundation funded M-KOPA with The Lundin Group, which has stakes in more than $10 billion of companies. Lundin investments include a stake in Africa Oil Corp., which together with Tullow Oil Plc found Kenya’s first oil last March.
“It’s ironic how we” and Shell’s charity are sponsoring business that’s phasing out our kerosene, said Africa Oil Vice President of Business Development James Phillip, based in Ethiopia.
Africa Enterprise Challenge Fund, a $190 million fund, LGT Group, owned by Lichtenstein’s Princely Family, the U.S.’s Gray Ghost Ventures, the Acumen Fund, part funded by the Rockefeller Foundation, the Dutch d.o.b fund and the U.K.’s Department for International Development are also sponsors.
Other mobile money technology and services providers in the region include Standard Bank in South Africa.