From pioneering pay-as-you-go solar to transforming smartphone access and digital financial services, M-KOPA redefines inclusive innovation and growth for millions in emerging markets.
M-KOPA: How Kenya’s Solar Pioneer Became the Blueprint for Diversified African Tech
M-KOPA raised $75m in its first equity funding round, which brought the startup’s equity funding to $100m. The Kenyan lender offers finance to underbanked customers, enabling them to acquire solar lighting, TVs, smartphones, and other domestic appliances.
Led by Broadscale Group and Generation Investment Management, the first funding round also saw the participation of new investors HEPCO Capital Management and LocalGlobe’s Latitude Fund, besides LGT Lightrock and CDC Group, the older investors. Through this funding, M-KOPA expanded into additional countries besides Kenya, including Nigeria, Ghana, and Uganda.
In 2023, M-KOPA managed to secure a total of $255 million in new equity funding and debt to expand its innovative financial services. This funding round includes $200 million in debt and $55 million in equity, intended to support the development of new services and products as well as expand into emerging markets. Additionally, the startup intends to go beyond asset financing by expanding financial services to cover cash loans, health insurance, and buy-now-pay-later partnerships with sellers.
What is M-KOPA?
Before the advent of mobile money, unbanked individuals who sought credit services could only turn to microfinance institutions (MFIs). These MFIs usually charged heavy interest rates to compensate themselves for the risk and significant costs involved in loan monitoring. The M-KOPA model is designed to bypass challenges associated with credit risk and physical payment collection costs.
“Kopa” is a Swahili word that means “borrow”. Through a pay-as-you-go (PAYG) model, M-KOPA clients who require products pay an initial deposit, which is then followed by daily instalments transacted through mobile money. The PAYG model facilitates access to financial services and products that many people might otherwise not afford. This also promotes economic empowerment and financial inclusion. Additionally, M-KOPA allows those who have paid or cleared their payments to re-mortgage the products to acquire additional components such as TV sets.
The Rise of M-KOPA
Since 2011, the startup has extended credit to customers valued in excess of $2 billion. The credit has gone to over 7 million people in Kenya, Uganda, Ghana, Nigeria, and South Africa. The company was founded by former executives who were the brains behind the world-famous M-PESA mobile money payment platform. M-KOPA leverages an innovative approach that gives low-income households access to financial power and freedom. The system combines GSM sensor technology with mobile payments to enable households to acquire solar home systems and other products at affordable prices. The package includes solar home systems (SHSs) that generate and store solar power for use in home electric appliances such as lighting, fridges, and TV sets.
The small SHSs are suitable in non-electrified areas as they eliminate the need to install a large and often expensive power generator to power home devices. In addition, M-KOPA offers its customers financing when they want to upgrade to more productive assets, including additional lights, internet-enabled smartphones, energy-efficient cooking stoves, and water storage tanks.
M-KOPA Early Challenges
M-KOPA enjoyed early growth and success as well as international acclaim for its innovative social enterprise model. Despite success and international acclaim, which included two IFC/FT awards in 2013 for sustainable finance, the startup was already facing some financial challenges by mid-2013. For example, the company was unable to meet growth aspirations or meet customer demands from its initial working capital of $2.5million. This was aggravated by a reluctance of philanthropic investors to inject more funds into the startup.
These challenges led M-KOPA to seek financing from local sources. The company offered a highly unusual collateral: the loan book of M-KOPA’s 30,000 mobile money customers. Chad Larson, the CFO, and the team of M-KOPA founders realized that a mobile money loan book of this nature had not been used before to securitize funding. Indeed, several banks gave negative responses. Commercial Bank of Africa (CBA), an existing client, emerged as M-KOPA’s only hope when it agreed to back the initiative.
Key M-KOPA Features and Attributes
Around the world, it is estimated that over 1 billion people live in areas without electricity, with Sub-Saharan Africa having over 600 million of this number. This hinders the local industry development, education, and the growth of the information economy. As a result, millions of homes remain in a rental economy where they pay for services and small portions of expensive but perishable food items. M-KOPA gives these disadvantaged people and communities a path to ownership by connecting light to homes, charging fridges, TVs, and radios.
The M-KOPA platform meets the changing needs of people who want to move away from expensive service providers and unreliable utilities. M-KOPA daily subscriptions are accessible for any home and affordable, paid from any place and at any time using a mobile signal. M-KOPA has therefore unlocked solar, finance, technology, information, and opportunity for millions of communities and people.
M-KOPANET, the company’s patented platform, leverages telemetry and Internet of Things (IoT) technology to power all the connected devices. The customer experience is gathered through analyzing subscriber payment behavior, device or product performance, and customer preferences. The integrated M-KOPAIQ Analytics Suite helps anticipate new service or new product opportunities.
M-KOPA’s Impact
Around the world, about 1.3 billion people lack access to energy, while another one billion only benefit from limited access to energy sources. In Kenya, for example, over eight million households spend about $1 billion on kerosene lighting alone. On average, this costs a household over $200 annually.
Comparatively, a solar system through M-KOPA costs a one-off payment of just $200. To get the M-KOPA solar product, Kenyans only make a $1 deposit, then they pay $0.45 every day through mobile phones. M-KOPA can help a buyer save an average of $4-5 weekly. The combination of savings, affordability, and payment flexibility enables people and homes to save for larger, lumpy expenses such as agricultural inputs and school fees.
M-KOPA, by employing local talent, contributes to the upskilling of the workforce by offering jobs in diverse areas such as logistics, customer support, quality control, and assembly line operation. These investments in skills development are in line with Kenya’s Vision 2030, whose broader goal is to make Kenya a manufacturing and technology hub in Africa. Vision 2030 is a national development plan that focuses on economic growth and industrialization.
From Solar to Diversified Tech
By blending smartphone services with a flexible PAYG model, the African fintech startup has achieved what was impossible for traditional banks. M-KOPA now sustainably serves the financially excluded groups and enables millions across the continent to access better economic opportunities.
The M-KOPA’s devices are designed to go beyond what conventional smartphones do; that is, simply connecting the users to the internet. They come with additional embedded features such as device protection, a health insurance facility, plus affordable credit. The smartphones are also efficient as their Smart Money Platform is capable of onboarding over 200,000 customers monthly, as well as processing over 15 payments per second. Since launch, M-KOPA leverages AI-driven analytics and payment data to build detailed credit histories for millions of people who were previously excluded from the traditional banking and credit systems.
Once they complete the solar system payment, M-KOPA customers can access additional credit for more products by allowing the company to maintain control of their current solar system in the event payments are not forthcoming. The result of this tech-driven approach is greater financial inclusion, where nearly one in five M-KOPA customers have eventually upgraded to smartphones, clean-burning cookstoves, low-energy TVs, and other digital financial offerings such as e-coupons for diverse agricultural inputs.
Expansion into Broader Fintech
As a leading fintech in emerging markets, M-KOPA has made the 2025 CNBC’s World’s Top Fintech Companies list. This also coincided with the announcement that M-KOPA has disbursed credit worth more than $2billion to over 7 million customers across the continent. M-KOPA thus joins 300 companies across 7 market segments that are awarded by CNBC. M-KOPA features in the “Alternative Financing” category, where it was recognized as a leader in the provision of digital lending and funding solutions.
M-KOPA achieved another significant benchmark within one year of launch by successfully selling over 1 million branded smartphones. These proprietary smartphones can now be accessed in other African countries besides Kenya. The phones also have an integrated Smart Money Platform from M-KOPA through which customers can get microloans, device insurance, micro-loans, and other financial tools. The M-KOPA smartphone, therefore, becomes both a communication gadget and a portable financial hub.
It’s worth noting that M-KOPA is simply not relabeling imported smartphones. Instead, its smartphones are assembled locally at their Nairobi facility, now flaunted as the highest-output assembly plant in Africa. Since launching in 2023, the assembly plant has not only generated more than 400 jobs but also earned the prestigious ISO 9001 certification, which goes to reinforce its commitment and adherence to manufacturing quality.
The success of the smartphone assembly facility is also an indication of growing investor confidence in the country’s manufacturing capabilities, which could potentially attract additional foreign direct investment into the industrial sector.
Other M-KOPA Projects
According to the M-KOPA 2024 Impact Report, the company has reached 5 million customers in Kenya, a significant milestone for this tech startup. Also, it has created employment opportunities that exceed 16,000, contributing over $133 million in taxes to the Kenyan government.
By the close of 2025, the number of M-KOPA paid sales agents is expected to reach 20,000. In another venture, M-KOPA has successfully financed the acquisition of over 1,500 e-motorbikes that are currently running on Kenyan roads.
M-KOPA Partnerships
M-KOPA and MasterCard have partnered to expand solar opportunities for both businesses and homes in Africa. The partnership has seen M-KOPA pilot MasterCard’s QR code (quick response) payment technology in Uganda. The goal of the joint effort is to improve access to M-KOPA’s pay-as-you-go solar service.
Part of the broader partnerships is with web designers who created M-KOPANet. This is a cloud-based platform that remotely monitors the systems’ overall performance and helps in synchronizing mobile money payments with individual customer devices. M-KOPANet also captures repayment performance for each and every user account.
M-KOPA as a Blueprint for Diversified African and Global Tech
The growth trajectory followed by M-KOPA reflects its success in terms of creating sustainable economic opportunities and narrowing down the current financial inclusion gap. For Africa, the success of M-KOPA in Kenya has charted the way for a broader vision of digital and financial inclusion for Africa. M-KOPA was one of the Kenyan start-ups that, when former US President Barack Obama visited Kenya in 2015, was one of the startups he inspected during the Global Entrepreneurship Nairobi Summit.
World-class hardware developers across the globe are already taking note of the PAYG market following M-KOPA’s success story. Several are venturing into the PAYG space, including the following two:
- Embraco: For two years, the world’s leading cooling technology player collaborated with M-KOPA to create hyper-efficient refrigerators that run solely on solar power.
- Bosch: This company is leveraging hardware design industry advancements to create water heating solutions capable of running affordably on solar power, designed to maximize efficiency and minimize energy loss.
Key Challenges and Opportunities
M-KOPA, despite its success, faces challenges. In particular, this revolves around the need to secure a steady supply of quality components for devices and the complexities involved in the management of a large assembly operation like the smartphone unit in Nairobi. Currency fluctuations, global supply chain disruptions, and import taxes imposed on components tend to impact production efficiency and the cost of locally assembled devices. M-KOPA, however, continues to work toward mitigating these barriers by investing in local sourcing where feasible and establishing strong supply chain partnerships.
Also, as the adoption of smartphones grows in Africa, M-KOPA is exploring more ways of integrating additional value-added services into its list of product offerings. There is, for example, much potential for bundled financial services like mobile banking and micro-insurance. This have the potential to enhance the value proposition of smartphones assembled and distributed by M-KOPA for users across the continent.
Recent research further reinforces this view. A World Economic Forum 2025 report shows that by 2030, revenues earned by global fintech are projected to hit $1.5 trillion, with emerging markets significantly driving this growth. Other studies, meanwhile, revealed that more than 1.4 billion people globally are still without basic financial services. Ideally, this positions M-KOPA and other innovative fintechs as potential and critical catalysts for economic development by bridging the existing financial inclusion gap at a profit.
The Future: What’s Next for M-KOPA & African Tech
While the initial M-KOPA focus was on solar home systems, the company has now broadened its offerings to include electric motorcycles, smartphones, and other financial products such as micro-loans and health insurance. This demonstrates the scalability of the M-KOPA approach across Africa and beyond.
In line with M-KOPA’s ambitious growth goals, the target is to reach 10 million smartphones assembled locally by 2027. This goal is supported by the expansion into new markets, continuous and the introduction of newer smartphone models.
Leveraging the African Continental Free Trade Area or AfCFTA agreement that was signed to promote cross-border trade, the smartphones from M-KOPA can now be distributed more easily across markets in Africa. This can also potentially help other regions within the continent to replicate the Kenyan success story in technology adoption.
Beyond the economic impact, local manufacturing efforts by M-KOPA also embody the company’s commitment to sustainable environmental management. The tech company also contributes to a reduction of the carbon footprint associated with the importation of fully assembled smartphones by assembling them locally. Additionally, M-KOPA emphasizes responsible e-waste management and has partnered with local recycling organizations to ensure assembly waste and used devices are disposed of sustainably.
Conclusion
Thanks to M-KOPA, PAYG solar is transforming the lives of many Africans. The startup provides affordable means for acquiring solar products on credit and installment payments. M-KOPA also helps boost a user’s profile and creditworthiness, enabling them to buy more products over time.
The M-KOPA PAYG model has become a blueprint for diversified African tech. This has led to the emergence of several players that are now providing PAYG asset financing to individuals, households, and micro businesses that were previously underserved.
As M-KOPA grows, its success is likely to inspire other tech companies and investors in Africa and abroad to explore the vast untapped potential of local manufacturing. With the continued support of government and industry partners, M-KOPA’s journey will continue to epitomize the promise of Africa’s digital transformation.
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Written by : Sammy Mwatha, Expert Author
Sammy Mwatha is a skilled content writer who blends business, tech, health, and lifestyle topics with analytical, story-driven insights.
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