Solar firm bets on phone banks to grow in Africa
Posted Saturday, March 9 2013 at 02:00
The company hopes to expand the system into other East African countries such as Uganda and Tanzania.
M-KOPA Kenya Limited, backed by Royal Dutch Shell Plc (RDSA), sees sales of its solar-lighting system that allows customers to pay daily charges by phone surging 16-fold in 2013 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 to 100,000 from about 6,000, 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. “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 (VOD), Safaricom Limited, (SAFCOM) and MTN Group Ltd. (MTN) 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 percent of homes aren’t linked to the power grid. The 40 shilling-a-day payment is about 20 percent cheaper than burning kerosene for light, Moore said.
Customers pay a Kshs2,500 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 part 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. (AOI), which together with Tullow Oil Plc found Kenya’s first oil last March.