How M-KOPA Is Solving Financial Inclusion in Africa Through Pay-As-You-Go Financing
What is the problem? About 600 million people in sub-Saharan Africa lack access to reliable electricity, and nearly nine out of ten workers in the area work in the informal economy. These workers include traders, boda boda operators, tailors, farmers, and entrepreneurs who make a living day to day without a pay stub, a formal job record, or a credit score.
Traditional banks will not lend to these non-traditional workers. They can’t obtain credit cards. They have no way to buy a solar energy source to replace kerosene, a smartphone to start a small enterprise, or a motorcycle to get to work. Informal workers either save for months or borrow from loan sharks at extortionate interest rates.
That is the fundamental problem M-KOPA aimed to solve. Energy poverty is not a technology problem. Digital exclusion is not a device problem. Both are financing problems. Solar panels exist. Smartphones exist. Motorcycles exist. But informal workers in Kenya, Uganda, Nigeria, Ghana, or South Africa cannot purchase those assets and pay on a schedule that matches how they actually earn.
What is the solution? M-KOPA sells its hardware on a pay-as-you-go scheme. The customer pays a small down payment toward the product's cost, takes the product home, and makes daily or weekly micropayments via mobile money until the product is paid off. Payments are typically a few dollars a day. Each product is fitted with a SIM card and locking system so it stops working if the customer stops paying, until payment resumes. Those who can no longer afford to pay can exchange the product and get their deposit back.
Once a customer pays off their first product, M-KOPA extends additional credit to buy another product such as a solar TV, smartphone, refrigerator, e-motorbike, or even a health insurance package. Each repayment creates an alternative credit history that conventional lenders can't access.
M-KOPA processes 1.5 million payments daily, making it one of Africa's largest alternative credit datasets. As CEO Jesse Moore puts it: “Every Day Earners have always been creditworthy. What they needed was credit built around how they really make a living, not a payslip.”
What is the business model? M-KOPA is a for-profit consumer credit business with three revenue sources.
The first revenue source is the margin earned from selling hardware (solar systems, smartphones, electric motorcycles, and other assets). The second is interest and finance charges on pay-as-you-go plans. Lastly, add-on services sold through its “more than a phone” platform for customers who have a strong credit history. The cross-sell model has expanded M-KOPA’s business from solar to a complete consumer financing platform. A customer who purchased a solar lantern back in 2015 may now be servicing her smartphone, small business loans, and health insurance through the same M-KOPA account.
Revenue has grown by an average of 50% per year since 2020, mainly from smartphone sales and other financial services. The firm’s lending capabilities are supported by equity, grants, and debt. How is it structured and funded? Jesse Moore co-founded the company in 2011 and remains its CEO. It launched its first pay-as-you-go solar finance product in 2012. To date, the company has raised over $590 million in loans, equity investments, and grants since its founding.
Why is it innovative?
M-KOPA is innovative because it combines credit and hardware into a single product for people banks neglect. A Kenyan woman can't buy a solar panel and then apply for a loan against it. Instead, she can pay 50 shillings per day for the solar panel, which turns off if she stops paying, and that hardware becomes both the product and the collateral.
This is a fundamentally new approach to lending. M-KOPA processes 1.5 million payments daily, and each payment indicates the client's reliability.
Credit history builds over time, and M-KOPA offers more credit for other products. This makes the initial product purchase the beginning of the formal financial journey with the company. In Kenya, 37 percent of M-KOPA customers received their first formal loan via M-KOPA while 68 percent signed up for their first health insurance via M-KOPA. The company has been investing in its manufacturing process as well, and in 2023, the Nairobi smartphone assembly plant of the company, which was termed Africa’s largest manufacturing entity at that time, manufactured more than 3.3 million phones with a staff of more than 400 employees.
What is the impact?
Based on its July 2026 milestone announcement, its 2025 Kenya Impact Report, M-KOPA:
Reached 10 million total customers across five countries (Kenya, Uganda, Nigeria, Ghana, South Africa)
Adds approximately 10,000 new customers daily
Nigeria became the fastest market in M-KOPA's history to surpass 1 million customers
Distribution network of over 40,000 sales agents across five markets
Kenya smartphone factory has produced over 3.3 million devices and employs 400+ people
Employs 1,320 people directly in Kenya and works with 14,000 Kenyan sales agents
Financed over 5,000 electric motorbikes for Nairobi riders through its EV mobility unit
An independent survey found 9 out of 10 M-KOPA customers believe the company's products have improved their lives
70% of customers use their M-KOPA phone to generate income; over half are now earning more after ownership
40% of total customers are women
Cut 2.03 million tonnes of CO2 equivalent since 2010, initially through solar and now expanded to smartphone refurbishment and EV mobility
What needs to improve?
M-KOPA faces three main challenges.
First, the device-locking method that facilitates the credit model is contentious. Critics argue that locking up the mobile phones or solar systems for those who fail to make payments can push families deeper into hardship during illness, job loss, or family emergencies. According to M-KOPA, its system prevents over-indebtedness, avoids hidden fees, does not charge late-payment penalties, and lets customers return devices for a deposit refund if they can no longer continue.
Second, employee shareholder disputes. A 2024 lawsuit filed by former employees over stock ownership plan rights raised questions about how the company has handled early-employee equity.
Third, scaling into new markets beyond the current five countries it operates. M-KOPA has product-market fit in East and West Africa, and its stated next goal is to reach 20 million customers. However, every new geography means building new sales agent networks, mobile money integrations, and regulatory relationships from scratch. The pace of the last five years is impressive, but sustaining it into new countries will be harder.
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