M-KOPA, a financial technology company, launched its phone financing service in Kenya in 2019. Customers can buy smartphones using a pay-as-you-go model. They make affordable daily or weekly payments. It initially focused on solar financing. It later expanded to smartphones and other products to boost digital and financial inclusion.
M-KOPA recently announced plans to enter the Ugandan market with Kenyan-made smartphones. It sent a trial shipment of about 1,000 devices to test demand. This move aims to cut costs by avoiding import duties on Chinese-made devices. M-KOPA’s Kenya General Manager, Martin Kingori, said these savings, estimated at 5-7%, will help customers. Kenyan-made devices qualify for duty exemptions in Uganda. This is possible under the East African Community’s common market protocol, which removes tariffs on goods produced within the region.
The company began assembling smartphones locally in January 2023. This followed the Kenyan government’s imposition of a 10% excise duty on imported phones, plus a 25% import duty. M-KOPA now produces two models, the X2 and X20, at its Nairobi plant. M-KOPA has plans to expand into Uganda. However, high demand in Kenya has limited its current production capacity. To meet this demand and prepare for the Uganda launch, M-KOPA plans to grow its workforce. It will expand from 300 to 500 employees by January 2024. The Nairobi plant now produces about 5,000 devices daily, or around 120,000 monthly. Yet it still struggles to meet the rising demand.
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