M-KOPA Tuesday lowered by Sh10 to Sh40 per day the amount that customers will pay to access its solar lamps.
The lamps are programmed in such a way that they automatically switch off whenever customers default on the daily payments.
“We have already connected 90,000 Kenyan homes to clean energy and with this upcoming suite of Safaricom-branded devices we aim to reach at least one million homes in the next four years,” said Safaricom CEO Bob Collymore during launch of M-KOPA 3, which has more features than the earlier two versions.
M-KOPA 3 comes with a solar-powered radio and mobile phone charger. The new version has a rechargeable torch and expandable solar panel.
The company estimates that the reduction in daily charges from Sh50 could increase M-KOPA’s daily top-ups to 20,000, from just about 1,000 a year ago.
Kenya power’s pay-bill transactions stand at an average of 135,000 per day.
The proportion of Kenyans connected to the national electricity grid is below 30 per cent of the population, leaving many households to rely on kerosene for lighting.
M-KOPA buyers pay Sh2,999 upfront and then settle the balance in daily installments of Sh40 via M-Pesa for a year, bringing the overall cost to about Sh17,599 which is a reduction from the previous Sh20,999.
The reduction of the fee was driven by the removal of VAT on solar powered devices by the government in June.
As long as customers keep making payments via M-Pesa, the system provides free light and power, and eventually they own it outright.
“We know most households with no connection to the electricity grid spend over Sh17, 000 per a year on kerosene. We also know Kenyans would prefer brighter, healthier and safer alternatives. We’ve developed our technology and business model precisely to meet that consumer needs,” said Jesse Moore, M-KOPA co-founder and managing director.
Mr Moore co-founded M-KOPA with Chad Larson and Nick Hughes who helped develop M-Pesa, which has more than 19 million users in Kenya.
The trio wants to apply the same thinking to lighting. The solar start-up accounts have generated three million M-Pesa transactions in which Safaricom earns an undisclosed fee for every deal since its launch less than two years ago.
Mr Moore said that penetration of solar energy use in Africa is still very low and expects that M-KOPA will enable low-income population to access affordable home lighting.
“We are not just lighting homes, but also enabling children to do their homework at night as well as providing convenient unlimited mobile charging at home,” added Mr Collymore.
M-KOPA has 95,000 customers and wants to grow its clientele base to one million homes by 2018.