Nairobi, May 6 -- In a brightly lit, air-conditioned godown in Nairobi's Industrial Area, rows of workers in blue coats and hair nets sit along a moving conveyor belt. Every few seconds, another smartphone inches forward to a new station, where it receives a new component.

By the end of the day, more than 7,500 of these devices will roll off the line, boxed, sealed and ready for sale across Kenya and Uganda.

This is the assembly plant of asset financing company M-Kopa, one of Kenya's most heavily funded startups, now at the centre of a shift towards local smartphone manufacturing.

Founded in 2011 by Jesse Moore, Nick Hughes and Chad Larson, M-Kopa built its business on pay-as-you-go solar financing before expanding into smartphones and...