Improving lives with AI and digital and financial inclusion in Kenya, one smartphone at a time

Supporting ‘financial resilience’

Founded in 2011 in Kenya, M-KOPA has expanded into Uganda, Nigeria and Ghana and is currently beginning operations in South Africa. By 2022, it had deployed more than $1 billion in credit with a focus on providing solutions that give people access to the digital world and help them financially in a way that is affordable and sustainable.

Nancy Sangoro, director of customer experience and retail at M-KOPA. Photo by Jenkins Kuyoh for Microsoft.

Nancy Sangoro, director of customer experience and retail at M-KOPA says, “Our mission is to make financing for everyday essentials affordable to everyone.”

That financing gives M-KOPA customers access to essential products they need to improve their lives, she says.

“When I think about the challenges that a lot of customers face, I can group them into two. One is financial resilience … Most customers are incapable of dealing with unforeseen emergency situations. Through our upgrade products like health insurance, these customers are able to deal with unforeseen emergencies.”

She says that M-KOPA has issued about 204,000 customers with health insurance policies.

“The second challenge relates to access to credit,” she says. “Eighty-two percent of our customers have reported that by being able to access credit, they’ve been able to expand their businesses and grow their income investing the excess funds in essentials like food, rent and education, which essentially improves their quality of life.”

Nicholas Njama, 44, a taxi driver in Nairobi, learned about M-KOPA at a critical moment in the fall 2022. His smartphone had broken, and he couldn’t afford to buy a new one. “I rely on my smartphone because many of my clients are in India and they need to be able to reach me for when they are here,” he says. “I was losing business.”

“A friend told me about M-KOPA and I applied for a phone,” he says. The company requires an initial deposit, typically about 20% of the cost of the phone. “I couldn’t have gotten a loan from a regular bank, and the payments were small enough.”

The M-KOPA app makes payments easy for clients and collects data for the company. Photo by Jenkins Kuyoh.

Once he paid it off, he had a credit line, and he took out loans to pay off school fees for his two children. One loan was 9,000 shillings, and the payback is 75 shillings a day (around 50 cents). The interest charges amount to about 2,000 shillings, according to an M-KOPA spokesperson.

“M-KOPA helped me because I was weighed down with school fees and I was carrying a balance,” he says. “I have one kid in high school and the other one in the second year of university.”

Njama, like many M-KOPA clients, stays with the company because it has become a trusted source of help to get ahead.

M-KOPA has been growing rapidly. And while part of M-KOPA’s mission is to help foster entrepreneurship, it also creates thousands of jobs. In Kenya alone, it has over 12,400 sales representatives and employees, many of whom are sales reps whose pay is based on commission for finding new clients.

Empowering women

Sangoro of M-KOPA says that female customers are more likely than their male counterparts to increase their spending on education and health. She says they are also more likely to report an improvement in their quality of life because they tend to save more and use earnings to support their families. Because of these trends, Sangoro says, M-KOPA is offering new opportunities to increase women’s financial access.

“One out of three of our customers are women, and two in five of our sales agents are also women,” she says.

Ruth Njuguna is an M-KOPA sales agent in the low-income community of Kawangware. Photo by Jenkins Kuyoh for Microsoft.

Ruth Njuguna, 27, is one of those sales agents. She sells phones where she lives, in the low-income community of Kawangware, about 15 kilometers, or 9 miles, west of Nairobi’s business center.

Unemployment there is high and daily income averages less than 300 shillings, or about $2, daily.

After losing her smartphone more than a year ago, a friend told her about M-KOPA. “Being able to get a good quality smartphone and having access to it at such a low price appealed to me,” she says. The low payments made it more attractive than settling for what she could afford at a regular smartphone store.

She later joined M-KOPA as a direct sales representative, selling M-KOPA smartphones in her community and earning a commission in return. The customers who buy an M-KOPA smartphone and make timely payments on it get access to cash loans. She says her clients have included ride share app drivers and people running businesses through social media apps who need smartphones to operate.

“I like my job and I like seeing how my clients’ lives improve,” she says.

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