Why MFIs will (Finally) Crack the Solar Market

 Photo credit: Dan Waldron

Photo credit: Dan Waldron

Blog post written by Daniel Waldron

We have long hoped that microfinance would hold the key to unlocking access to energy for low-income households. Until now, we have been largely disappointed. Now, in partnership with pay-as-you-go (PAYGo) solar providers, that hope may finally become reality. This blog post explores the opportunities available for MFIs in the PAYGo sector.


Global SME Finance Forum November 2018

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Date: 05 - 07 November

Location: Madrid, Spain

Under the theme “Reaching the Informal: the Role of Finance in Improving the Growth and Productivity of SMEs”,  the forum will explore how innovation in technology, regulation and partnerships can help overcome various informality problems, and open up a far larger market for profitable, sustainable, responsible financial services. 

Realities of Digitizing PAYGo Operations in an Unbundled World

  PEG Africa Sales Agent, Juapong, Ghana. Credit: Martin Wright

PEG Africa Sales Agent, Juapong, Ghana. Credit: Martin Wright

Digitizing operations for PAYGo 2.0 providers seems like a no-brainer. After all, digitization can make operations more efficient, easier to track, and more cost-effective. But digitization is trickier in practice than on paper. Our recent work with PEG Africa, a leading PAYGo operator in West Africa, is a great example of the new opportunities and obstacles presented by digitization. Through building a smartphone app for in-the-field sales agents, FIBR helped PEG address a number of pain points that their agents experienced, improved critical data visibility to both their headquarters and agents, and strengthened PEG’s relationship with their salesforce. https://bfa.works/realities-of-digitizing-paygo-operations

Visiting a Merchant Shop in Kibera in VR

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An Immersive Experience with Informal Retailers in Africa

Produced and Developed by: Abi Steinberg, Videographer and Director: Adam Wiseman

FIBR's first #VR video from the field, filmed in 360 degrees, provides a closer look into the lives of two informal retailers from Kibera in Nairobi, Kenya. This video invites you into their world, transporting you thousands of miles away and capturing their existence as lifelines in communities. These businesses provide critical products and services and are representative of thousands of small shops around Africa. Learn more

The Promise of “Unbundling“ to Reshape PAYGo Solar

 Photo credit: Oikocredit, a PEG PAYGo customer

Photo credit: Oikocredit, a PEG PAYGo customer

PAYGo solar companies are now looking to specialize in one or two pieces of the solar puzzle including hardware, software, distribution, consumer financing, and value-added services. If successful, this unbundling will create more product options and greater flexibility for distributors, financial service providers, and end consumers of solar energy. What are the implications of an ‘unbundled’ #PAYGo business model?

Jacob Winiecki explores the implications of an unbundled PAYGo business model in this first post in a series on FIBR's collaboration with PEG Africa. Read the post.

Predicting Payment Behavior in PAYGo: Machine Learning Can Power Customer Retention

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The PAYGo model makes solar affordable for end-users and provides sufficient margin for providers to scale last-mile distribution. However, for the model to succeed PAYGo operators must retain customers and build a base of loyal and engaged customers. Our project with Zola Electric (formerly Off Grid Electric) demonstrates that machine learning can help them do so. Read the post.

 

The Odd Couple: PAYGo Solar and Financial Services.

  Photo Credit: Dawn Deeks

Photo Credit: Dawn Deeks

Can the data generated by PAYGo solar providers open new avenues for financial services to be extended to low-income customers? FIBR is partnering with FINCA's BrightLife and FINCA Uganda to demonstrate the potential of this model and explore how PAYGo companies -- particularly ones with highly digitized operations -- can help low-income consumers access superior financial services through formal providers. bfa.works/odd-couple-paygo-and-financial-services

FIBR Partners with BrightLife and Safe Water Network to Deepen Financial Inclusion with PAYGo Payment Innovation

 Jane Namusisi, a 54-year-old Ugandan woman, meets with BrightLife field supervisor, Brenda Nansasi, to discuss installation of a new solar home system. Photo credit: Dawn Deeks

Jane Namusisi, a 54-year-old Ugandan woman, meets with BrightLife field supervisor, Brenda Nansasi, to discuss installation of a new solar home system. Photo credit: Dawn Deeks

NAIROBI, July 10, 2018 — FIBR (Financial Inclusion on Business Runways) today announced BrightLife and Safe Water Network as the newest partners in its program. FIBR is an initiative of BFA and the Mastercard Foundation that seeks to connect financial services to low-income populations in Africa through digital innovation. As part of its work, FIBR has been working with pay-as-you-go (PAYGo) providers such as Off Grid Electric and PEGAfrica to improve and build digital solutions addressing payments, customer retention, data, and sales operations.

“We work in the PAYGo sector because these companies directly reach low-income customers,” said Amolo Ng’weno, FIBR Project Director and East Africa Regional Director of BFA. “Through our work with BrightLife and Safe Water Network, we hope to demonstrate to financial service providers across Africa that PAYGo companies are repositories of valuable customer data which can be used to extend financial services offerings to low-income customers.”

BrightLife, a social enterprise founded by FINCA International, distributes high-quality, low-cost solar energy and cookstove products, which customers pay for by using mobile money. FIBR is working with BrightLife and FINCA in Uganda to develop data analytics to  improve customer segmentation and portfolio management, and to better understand payment behavior with the hopes of linking banking services to energy customers.

“Most Ugandans still lack access to reliable energy and essential financial services,” said Stefan Grundmann, President and CEO for BrightLife in Uganda. “The project between FIBR, BrightLife and FINCA Uganda aims to demonstrate how millions of people could potentially benefit when social enterprises and financial institutions join forces—and use payment innovations like PAYGo solar—to tackle the energy access and financial inclusion challenges in our communities.”

Safe Water Network is a nonprofit operating sustainable water micro-utilities in Ghana and India. FIBR is helping Safe Water Network launch household connections that lack running water using prepaid meters.

“Safe Water Network is excited to work with FIBR because we see digital finance as critical to enabling the scale-up of small water enterprises to meet the safe water needs of more than a billion people around the world,” said Safe Water Network CEO Kurt Soderlund. “We look forward to this collaboration in Ghana to digitize and improve customer payment processes for low-income consumers and leverage learnings that can apply to the PAYGo and broader water sectors.”

FIBR’s focus on the PAYGo sector builds on the premise that digitizing the many business relationships that low-income customers have in the informal economy, and the data resulting from them, will enable access to products such as credit, loans, savings and insurance. PAYGo is an emerging solution, in which the customer prepays for a service (e.g., power) while acquiring an asset over time (e.g., a solar home system), that is flexible and affordable for low-income customers, and that generates enough margins for operators to scale. FIBR’s recent report with CGAP, Escaping Darkness: Understanding Consumer Value in PAYGo Solar, further demonstrated that low-income customers derive great inherent value from a quality light source and are willing to pay for it.

For more information about FIBR’s research in PAYGo, please visit: http://bfa.works/paygo.

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About BFA

BFA is a global consulting firm specializing in using finance to create solutions for low-income people. Our approach is to seek out, create and implement financial solutions to help people manage challenges and seize opportunities. We partner with cutting-edge organizations that touch the lives of low-income consumers such as financial institutions, fintech companies and information providers. In creating solutions, we integrate our deep expertise in customer insights, business strategy, new technology, and growth-enabling policy and regulation. Founded in 2006, BFA’s clients include financial institutions, technology companies, donors, investors and policymakers. BFA has offices in Nairobi, Delhi, Boston, Medellín and New York. For more information, please visit: www.bfaglobal.com.

About Mastercard Foundation

The Mastercard Foundation works with visionary organizations to provide greater access to education, skills training and financial services for people living in poverty, primarily in Africa. As one of the largest private foundations, its work is guided by its mission to advance learning and promote financial inclusion to create an inclusive and equitable world. Based in Toronto, Canada, its independence was established by Mastercard International when the Foundation was created in 2006. For more information and to sign up for the Foundation’s newsletter, please visit www.mastercardfdn.org. Follow the Foundation at @MastercardFdn on Twitter.

About BrightLife

BrightLife, a social enterprise by FINCA International in Uganda, provides last-mile distribution and end-user financing for basic service products, including solar home systems, improved cookstoves and productive use assets. These life-enhancing products—made affordable to low-income customers through pay-as-you-go financing—help create healthier and safer homes, increase productivity, reduce household expenses, and provide additional income-generating opportunities. Through BrightLife, FINCA International pairs access to finance with access to energy to create pathways to financial inclusion for the unbanked. For more information, please visit: www.finca.org/our-work/social-enterprises/brightlife/.

About Safe Water Network

Safe Water Network is advancing the potential for small water enterprises to ensure millions gain access to the most essential of needs: safe water. Working in hundreds of communities in Ghana and India, we are demonstrating the affordability, effectiveness, and sustainability of the enterprise approach. With a commitment to operational excellence and local capacity-building, we are developing the tools and resources needed to overcome an unacceptable failure rate typical of developing world water systems.  Working with government, development agencies, and implementers, we are scaling this approach to improve the health and livelihoods of millions of people in need of safe water. For more information, please visit: safewaternetwork.org.

Originally posted on PRWeb: http://www.prweb.com/releases/2018/07/prweb15615679.htm.