Solar-powered electricity units are removing the need for dangerous kerosene lamps and allowing Africans to stay connected
July 30, 2016 — Julie Njeri did not believe her son when he declared he no longer needed spectacles to read his books and complete his homework.
She took him to the doctor and was told young Peter Mwangi no longer suffered the sharp irritation and redness in his eyes that had resulted in him being given glasses. Peter’s mum exclaimed: “It’s a miracle!”
The explanation was somewhat more tangible. In late 2013, Julie and her husband bought an M-Kopa solar power kit – something 4,000 east Africans now do every week.
The $200 (£150) device comes with two LED bulbs, an LED flashlight, a rechargeable battery, adaptors for charging phones, and it is all charged by a small solar panel that is propped on the roof.
More than 300,000 families in Kenya, Uganda and Tanzania who are not connected to the electricity grid have purchased the unit which is linked to the mobile money transfer system M-Pesa.
After paying a deposit of $35 or $25, depending on their M-Pesa credit history, customers are then able to settle the balance through daily mobile phone payments of 50 cents for a year until they own the device outright.
It has brought clean energy to many homes and powers thousands of businesses ranging from small greengrocers in heavily populated low-income settlements to restaurants that can now stay open longer.
More importantly, children like Peter no longer have to use kerosene-powered paraffin lamps to do their studies in dimly lit houses, and their parents enjoy saving the money that was spent on unclean sources of energy.
Chad Larson, one of the co-founders of M-Kopa, said the idea sprung from a talk that the Vodafone executive Nick Hughes gave at Oxford’s business school in 2007.
Hughes, who is credited with the early research work that led to the introduction of M-Pesa in Kenya, told the audience that mobile phones could replace banks in much of the developing world.
“The light bulb went on as we listened to Nick explain how mobile phones had an almost insurmountable advantage over banks,” said Larson. “The sim in the mobile was basically like an ID card and mobiles were much easier to access than opening a bank account, a process that had far more formidable barriers to entry.”
A few years after finishing his studies, Larson and a fellow student, Jesse Moore, quit their jobs and moved to Nairobi with Hughes to join the mobile revolution that was taking hold in east Africa.
After dabbling in a number of ventures including a mobile savings account product and a medical helpline where patients could consult doctors via mobile phone, they turned their attention to solar.
Although it has a heavy tech component, M-Kopa is at root a finance business. Kopa means borrow in Swahili and the rapid takeup of the loan product rested on the phenomenal success of the M-Pesa platform run by the Kenyan technology company Safaricom, part-owned by Vodafone.
M-Pesa, through which customers settle their payments, serves as a virtual wallet on mobile phones into which subscribers deposit cash at an M-Pesa agent. They can then use it to pay bills or transfer the money to another customer.
Kenya now has more mobile money accounts than any other country, 31.6m in a nation with a population of 44 million. Eight out of 10 Kenyans operate a bank or mobile account, up from 26.1% in 2009.
Companies such as M-Kopa are riding that wave. It had projected it would be selling 1,000 units a week within two years, but it met that target in half the time and its 1,000-strong sales force in the three east African countries shifts 4,000 units a week. It hopes to have sold 1m units by the end of 2017.
Investors have piled in – a recent $19m investment round was joined by a number of big names including Generation Investment Management, a fund co-founded by the former US vice-president Al Gore, Virgin’s Richard Branson and the AOL co-founder Steve Case.
Larson says the firm plans to expand to up to 15 countries in Africa and Asia in the next five years, tracking the development of mobile money, but says there is still considerable growth potential in east Africa.
M-Kopa’s most potent advertising appears to be the word-of-mouth testimonials of neighbours revealing how they have cut back on expensive and dangerous kerosene lamps thanks to the solar device. This was underlined during a recent trip accompanying a sales team to install a unit at a home in the peri-urban farming settlement of Juja, 30 miles (50km) from Nairobi.
Mary Wanjiku, 23, opened her gate to reveal a typical smallholder farming household including a couple of lively chickens, three goats and a sleepy guard dog lying next to its scrawny brown puppy.
Why was she buying the device? Her motivations were strikingly similar to those of Julie Njeri, who lives across the ridge in the Kamiti neighbourhood.
“I am tired of walking long distances to charge my phone and I heard from others that this will help me save on the amount of money I spend on kerosene,” she said. “But the most important thing is that my daughter and son will be able to do their homework under these lights instead of waking up at 5am to study using sunlight.”