Micro-Finance

It is now possible for poor people living on $2 a day to buy a renewable energy system costing as much as $200.

It is now possible for poor people living on $2 a day to buy a renewable energy system costing as much as $200.  They do it with micro-finance on Pay-As-You-Go (PAYG).   They now pay cash for phone charging and for kerosene fuel for lamps, and this may use a substantial amount of their income.  If they can pay a little less every week for an alternative, a renewable energy system, they will.  $2 a week will pay for a $100 product over a year, and save the customer money compared to their previous practice.

The key to the system is the ability to turn the system off remotely if the customer does not make the regular payments.  In regions with cell coverage, this is done simply by including a GMS text messaging chip in the system that turns it on or off when a coded text message is received.   A good example is How M-KOPA unlocked pay-as-you-go solar in rural Kenya.  M-KOPA predicts they will sell over a million solar lamps for $200 each, just in Kenya.

Even where there is no cell phone coverage, PAYG can be done.  Quetsol Solar has pioneered the use of keypad code entry to activate their solar lights.  Each month the customers buy a scratch card with activation code on it to get another month’s operation from their solar-powered light.

Digital finance for renewable energy is now happening around the world.  Read this recent paper from the World Bank for an excellent summary.   Another good paper is Clean Energy Services for All: Financing Universal Electrification.  It estimates a market for off-grid charging worth $12 billion a year.

The Hydrobee is equipped with a GMS messaging chip and a Bluetooth chip so it can be remotely activated over mobile networks or in Bluetooth proximity, and it can also be controlled by an external keypad that plugs into the USB port.

CGAP (the Consultative Group to Assist the Poor) is a global partnership, based at the World Bank, of 34 organizations that seek to advance financial inclusion.  They have published numerous articles on micro-finance of energy for the poor.  They also have a database of companies working in digital finance for the poor.

The MIFOS Initiative is developing open-source financial software to facilitate banking for the poorest people.

Hydrobee is establishing partnerships with non-profit groups promoting micro-finance.   Please contact us if you want more information.