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Nigeria: Kenyan M-KOPA to scale up Airtel collaboration to lift smartphone use

By David Whitehouse
Posted on Monday, 19 July 2021 12:34

Babajide Duroshola, M-KOPA Nigeria General Manager
Babajide Duroshola, general manager, M-KOPA Nigeria. Photo supplied.

M-KOPA aims to scale up its partnership with Airtel to extend smartphone penetration in Nigeria, Babajide Duroshola, M-KOPA’s new general manager for Nigeria, tells The Africa Report.

The company aims to extend its footprint in Nigeria outside its presence in Lagos and Oyo in 2022, Duroshola says in Lagos. Expansion may take place in Port Harcourt, Ogun and eastern Nigeria, though no final decisions on the areas to be targeted have yet been reached, he says. Duroshola joined M-KOPA in July.

M-KOPA was founded in Kenya 2011 and helped the country’s pay-as-you-go (PAYG) solar market to expand. The company, which also operates in Uganda, has sold more than 1 million PAYG solar systems and expanded its finance offer to include televisions and fridges. It launched smartphone financing in 2019, with loans designed to help people who can’t afford to buy outright and may not be able to borrow from a bank.

M-KOPA, which also has a partnership with Samsung, will seek to deploy its Kenyan brand equity in Nigeria, Duroshola says. “There is a huge market opportunity” in financing smartphones for Nigerians.

Investors in M-KOPA include Japan’s Sumitomo, Mitsui, and FinDev Canada. Despite being billed as Kenya’s most-funded start-up, the company in December 2017 carried out a restructuring that saw its headcount in east Africa cut by 18% to 850, with 78 Kenyan developers among those fired.

  • CEO and co-founder Jesse Moore said at the time that the firings were due to  rising costs of technology and the need to protect investor returns.

4G acceleration needed

According to GSMA, sub-Saharan Africa will have nearly 700 million smartphone connections by 2025 as low-cost devices and smartphone financing schemes accelerate adoption. GSMA says that the number of Nigerian smartphone connections will rise to 144 million in 2025, from 53 million in September 2018. Still, GSMA says, Nigeria has lagged behind South Africa, Kenya and Angola in adopting 4G, which would accelerate the use of more advanced phones.

Duroshola was previously general manager at motorcycle ride-hailing platform SafeBoda Nigeria. He plans to set up M-KOPA shops and put agents in Airtel stores. The aim is to help micro, small and medium-sized companies (MSMEs) access smartphones that would otherwise be unavailable.

Duroshola does not anticipate any major changes in the company’s strategy in Nigeria. “PAYG is PAYG anywhere,” he says. Still, M-KOPA is introducing weekly and monthly, as opposed to daily, payments to take account of the “cultural context” as Nigerians are used to paid larger sums more infrequently than in Kenya, he says, citing the fact that rents are often paid annually.

  • Covid-19 has created an opportunity as more people are having to move their businesses online, he says, meaning a positive impact on the need to buy smartphones.
  • A survey from Visa found that 71% of respondents in Nigeria bought groceries online for the first time because of the pandemic.

Bottom line

M-KOPA is betting that Nigeria is ready for mass smartphone adoption.

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