Serving the Under-Served(Bottom of the Pyramid) is Profitable
One of the Unique advantages of technology ecosystems across Africa is proving consistently that serving the underserved in profitable; providing essential services to people who live just on or above the poverty line , enables them to have the things they need whilst providing profit for the companies .
Below a list of companies doing just that
The Problem Space: Lack of Electricity
According to the African development bank (Afdb) most Sub Saharan African countries have an energy crises with 2 out of 3 people in sub-Saharan Africa lacking access to sustainable, reliable electricity leaving over 650million without access to electricity. Only 7 countries in Africa have electricity access rates at or above 50%
Which is why projects like Power Africa by the United States government to provide 60million new electricity connections with 30,000 MEGAWATTS of new and cleaner power generation across Africa along with Afdb’s Power and Light up Africa are looking at alternative solutions
The 650 million disenfranchised Africans cannot wait for the grid electricity to reach them and this has sprouted a number of solar, off grid startup solutions across the continent, one such solution is the service provided by M-Kopa.
The Solution: M-Kopa
M-Kopa believes itself to be an assert finance company that enables underserved communities to finance solar powered devices like solar lamps, televisions amongst others with a pay as you go business model .
The two founders Jesse Moore and Nick Hughes of M-Kopa headquarters in Nairobi , initially started as Managing directors at Signal pointers a global incubation and advisory group which over a period 2 years built and incubated 3 mobile services Jipange ku Save and M-Kopa in Kenya, and MeraDoctor in India.
The success of M-kopa led them to concentrate and expand on the product. Since its founding in 2012 the company has sold solar units in Kenya, Tanzania and Uganda connecting over 300,000 to electricity via solar power.
The Solar power lamps which becomes the main source of light in the homes they are in work and has raised over $161.8M since its inception.
Clients pay an initial 35 United States dollars and then pay a daily 45 cents, the solar lamp includes a sim card that is connected to M-Kopa headquarters that turns off the device once payments are not made. There is a current standing of 98% repayment rate
The Problem Space: Lack lending opportunities of small holder farmers
The African continent has over 60% of world’s non-cultivated arable lands but still spends $25 billion annually on food imports .Agriculture in Africa is plagued by many problems, notably the fact that over a third of the calories consumed on the continent is imported and over three fifths of the continent employment is in agriculture but the average age of a farmer is 60 years is very worrying.
Additionally the logistics issues with transportation and preservation of food leading to wastage is also very prevalent, along with extreme poverty and the inability of small holder farmers to purchase tools and fertilizers keeps agriculture in Africa far from meeting its full potential.
The Solution: Alternative credit scoring and lending for farmers
Farmdrive: FarmDrive collects and aggregates alternative datasets from multiple sources, in Kenya and around the world, to build credit scores for smallholder farmers in Africa.
According to their Co-founder Peris Bosire , who I met in Paris in 2018 at the Africa tech stage during the Viva Tech Conference:
“FarmDrive helps financial institutions reduce the time spent manually assessing farmer creditworthiness and creating agriculture loan products, thereby accelerating agricultural portfolio growth.
Farmdrive is the first line of defense against credit risk with their algorithm and by providing decision tools and bundling the loans with hybrid index insurance, which helps financial institutions create loan products that are more likely to be repaid on time and protected in the event of unforeseen environmental circumstances.
The startup in 2017 received seed round funding from Safaricom Spark, the investment vehicle for Safaricom , Kenya largest telecom company with over 72.6% market share 29 million subscribers and owners of the Mpesa mobile money platform( Africa’s most successful mobile platform)
The Problem Space: Lack of Toilets in homes
Diarrhoea kills 480,000 children alone annually in African and is caused by sanitation deficiencies. One of the biggest health challenges across Africa is the availability of toilets facilities in underserved areas, leading to unsanitary ways of disposal of fecal matter. Over 1 billion people globally do no have a toilet and, and globally 1,000 children die every day from fecal related infections.
The Solution: Sanivation
Sanivation is a social enterprise dedicated to improving the overall dignity, health, and environment of urbanizing communities in East Africa through delivering clean, safe, and efficient sanitation services.
Sanivation operates in Kenya, by placing a mobile toilet unit in households where an agent collects the waste from the homes of the users a number of times a week for a low price of about 7 United Stated dollars per month.
The waste is then taken to the Sanivation center, where a solar concentrator heats the biosolids over 70 degrees Celsius to remove pathogens in the waste. The waste is then further dehydrated in an agglomerator, and turned into charcoal briquettes that are used as fuel for burning.
According to cruchbase this startup has raised over 200,000 United Stated dollars since its founding in 2006.
Africa as a continent has its unique problems and rather than be a clone of the Silicon Valley, we need to put tech at the center of our betterment as a people…