M-KOPA Solar-Technology and Partnership for Sustainable Finance




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BACKGROUND

Nick Hughes (Hughes), a management consultant and researcher who worked as head of the Climate Change Program at British Petroleum Plc , joined Vodafone Plc (Vodafone) in the year 2001. At Vodafone he launched and managed a fund called the Social Innovation Fund to finance new applications of mobile communication systems that would improve society and offer business growth opportunities. In the year 2003, he worked on testing the concept of mobile money in Kenya, where the banking and financial infrastructure was woefully inadequate. The project was funded by the Department of International Development (DID) , Safaricom Limited (Safaricom) , and Central Bank of Kenya (CBK).

In Kenya, people who wanted to transfer money depended on private players. As these private players did not have a license and there was no assurance of the money transfer being done, there was a risk involved in the process. Access to financial services especially in the rural areas was very limited. By the year 2006, around 38% of the population did not have access to any kind of financial services. Only 19% of the population was able to access formal financial services , especially through banks. In rural areas, the financial institutions were not able to attract a large number of customers as customer care was inadequate and service charges were high. Further, customers lacked credit-worthiness and so could not avail credit facilities.

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