Afrobility: Africa Tech and Business #60: M-Kopa - How the asset financing platform is providing access to consumer products across Kenya & Africa
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Jan 19, 2023 Explore M-Kopa's journey as an asset financing platform that’s transforming access to consumer products in Africa. Delve into the challenges of electricity access across the continent and Kenya's progress. Discover the founders' backgrounds, innovative product strategies, and early fundraising efforts. Learn how M-Kopa's pay-as-you-go solar solutions evolved and expanded into smartphones and insurance. The discussion also highlights competition, exit strategies, and consumer benefits alongside the industry's risks.
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High Repayment Rates Are Promising But Nuanced
- Reported repayment rates were high (solar ~93%, secondary products ~98%), which attracted lenders and funders.
- Interpreting these rates is tricky versus bank NPAs and depends on collection definitions and device lockout effectiveness.
Match Product Tiers To Financing Options
- Expand product tiers as hardware improves and match financing terms to product lifecycles.
- Offer both cash and installment options so customers who can pay up-front avoid high financing premiums.
Device Financing Enables Broader Credit Products
- M-Kopa leveraged initial device repayments to originate more credit products and cross-sell phones, loans and insurance.
- The closed-loop credit history they build is valuable but limited without broader credit bureau integration.
