For most Nigerians, 40% of whom live below the poverty line, buying electronic devices in a single installment is a daunting task.
Most devices and work equipment cost more than Nigeria’s minimum wage, a meagre $73. The average price of mobile phones was $95 in 2020 and without constant power supply, it can cost about $48/month to run generators.
Electricity and connection play a large role in growth and development. It’s fair to estimate that many people cannot access the tools they need to succeed because they cannot afford them.
In recent years, asset finance and Buy Now Pay Later platforms have become sources of relief, allowing customers to pay for products in installments.
One such platform is M-KOPA, a Kenyan company that is expanding its services into Nigeria so more people can have access to installment payments for devices like solar systems and smartphones. Earlier in 2021, M-KOPA ran a successful pilot test in Lagos where 20,000 devices were reportedly sold.
With the appointment of a new general manager, the company is now looking to accelerate its Nigeria operation.
Over 1 million customers in eight years
In an email to TechCabal, M-KOPA’s Chief Commercial Officer, Mayur Patel said, “Last October, we reached an exciting milestone of 1 million customers served by M-KOPA after 8+ years of work on the ground.”
Since its launch in Kenya in 2012, M-KOPA’s financing model has been helping people get instant access to products while slowly building ownership through micropayments. Usually, BNPL services are offered to credit-worthy customers only and this means that customers whose credit history cannot be discerned are denied access to these services.
An estimate of 500 million African adults are unbanked without formal access to financial institutions. This means that they would be naturally excluded from BNPL providers that require credit history.
However, M-KOPA uses a different financing model. All payments are automated, and the company doesn’t accept cash payments. The devices are also connected to M-KOPA’s CRM by IoT so default payments on a customer’s end will result in the automatic lock of their devices.
Initially, M-KOPA only offered its solar lighting products in Kenya, aiming for 80% of the population who had poor access to electricity at the time. In 2019, however, it entered into a partnership with Safaricom and Samsung to begin offering smartphones to customers. While its current portfolio includes refrigerators and television sets as well, the company has successfully sold over 500,000 smartphones in just two years.
Scaling in Nigeria and Babajide Duroshola’s role
“Nigeria represents the largest smartphone device market in Africa, with well over 12 million devices sold annually. We started piloting in Lagos, and have built up a great team and base. With an established foothold in the market, we will now rapidly expand across Nigeria,” said Mayur Patel.
After the pilot, M-KOPA is moving to spread its wings in other parts of Nigeria.
“We want to reach 2 million customers in a fraction of this time and our expansion into Nigeria will help build momentum,” Patel said.
“The rollout is underway, and we’ve already started setting up operations in Oyo State this month. Babajide Durshola, M-KOPA’s new Country General Manager has experience in scaling companies in Nigeria, and we’re excited for him to be leading our expansion across the country.”
Babajide Duroshola previously served as the Country Head for SafeBoda, a ride-hailing service based in Uganda, where he helped scale the business to 1.5 million rides a year. Before SafeBoda, he worked as a Community Manager for Andela.
Duroshola told TechCrunch he plans to balance the number of products M-KOPA offers Nigerians to reflect what is offered to Kenyans. On its website, M-KOPA only offers four Samsung smartphones to its Nigerian customers. In Kenya and Uganda, where it expanded to in 2013, customers can access other products included in its portfolio.
In speaking about how its operation in West Africa will differ from its East African activities, CCO Patel noted that only weekly and monthly payment options will be available in Nigeria.
“As part of our early piloting in Nigeria, we’ve spent a lot of time localizing our service and adapting our product offering. For example, we’ve refined our payment plans to match the preference of our customers. Whereas in East Africa, the prevalence of mobile money penetration facilitates daily transactions, in Nigeria we’ve focused on weekly and monthly installments.”
The post M-KOPA aims for 2 million customers with Babajide Duroshola leading expansion into Nigeria appeared first on TechCabal.
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I am the CEO of 9JAGISTLAND.My name is Adedeji Timothy and my co-owner is Oyekola Damilare.This blog is born out of our passion to educating to people in all aspect of internet life.We are enthusiastic about writing posts and articles online.
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