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Micro-energy Lending: Increasing Access to Energy for FINCA Clients via End-User Financing

Micro-energy Lending: Increasing Access to Energy for FINCA Clients via End-User Financing . March, 2011. Agenda. Overview of FINCA Client need and demand Research Results from Uganda and Tanzania Results of pilot with SHS in Uganda Operational approach Client impact

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Micro-energy Lending: Increasing Access to Energy for FINCA Clients via End-User Financing

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  1. Micro-energy Lending:Increasing Access to Energy for FINCA Clients via End-User Financing March, 2011

  2. Agenda • Overview of FINCA • Client need and demand • Research Results from Uganda and Tanzania • Results of pilot with SHS in Uganda • Operational approach • Client impact • Approach for scale up

  3. FINCA Mission and Vision MISSION: To provide financial services to poor entrepreneurs so that they can create their own jobs, raise household incomes, and improve their standard of living. VISION: A global network of sustainable financial institutions dedicated to meeting the financial needs of the lowest market niche.

  4. FINCA’s Geographic Footprint Eurasia Armenia Azerbaijan Georgia Kosovo Kyrgyzstan Russia Tajikistan FINCA HQ Washington DC Greater Middle East Afghanistan Jordan Latin America Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Africa DR Congo Malawi Tanzania- 55K clients Uganda- 40K clients Zambia

  5. Agenda • Overview of FINCA • Client need and demand • Research Results from Uganda and Tanzania • Results of pilot with SHS in Uganda • Operational approach • Client impact • Approach for scale up

  6. Current Client Energy Use and Expenditures- Uganda • Clients spend 37-41% of their incomes on cooking fuel (wood or charcoal) and traditional lighting inputs (kerosene and dry cell batteries) • Only 36 % of large loan clients, 31% of small loan clients have access to electricity in rural areas

  7. Current Client Energy Use and Expenditures- Tanzania Lighting Cooking Based on 131 clients interviewed across 8 focus groups

  8. Products Tested in Market Research- Tanzania

  9. Product Preference- Lighting Based on 131 clients interviewed across 8 focus groups

  10. Agenda • Overview of FINCA • Client need and demand • Research Results from Uganda and Tanzania • Results of pilot with SHS in Uganda • Operational approach • Client impact • Approach for scale up

  11. Pilot Operational Model- Uganda • SHS only for Pilot • End user financing+ awareness and training+ back-up after sales care • Specialized sales force • Partnerships with suppliers • Energy loan bundled with business loan

  12. Pilot Results - Client Uptake • 550 loans • 70 cash sales • 98% would recommend SHS to neighbor Children at a school using a solar home system sourced from FINCA Uganda

  13. Client Feedback Indicates Positive Impact on Health, Education, Savings 13 Impact on Business Impact on Savings Impact on Health • When asked about overall benefits from having an SHS: • 57 % of clients felt they had improved respiratory health • 50% reported improved eye health • 84% indicated that their children were able to study at night • 91% saved on kerosene costs • 82% saved on mobile phone charging costs. Impact on Education * Based on a survey of 56 clients.

  14. Client Are Using SHS for Business Purposes 14 • 43% of FINCA Uganda clients surveyed use their SHS for business • 22% have started a new business with the system, mostly by offering mobile phone charging services • Others clients are using the systems for lighting in poultry or pig farming businesses, clinics, retail shops, schools, and salons. Impact on Business Impact on Savings Impact on Health Impact on Education Based on a survey of 56 clients.

  15. Impact Assessment Results Show Clients Feel They are Saving Money with SHS 15 Impact on Business Impact on Savings Impact on Health Impact on Education * Based on a survey of 56 clients; savings include transport costs

  16. SHS is more cost-effective for business vs household, but new products are cost effective for both 16 Impact on Business Impact on Savings Impact on Health Impact on Education *Assuming 500 UGS per phone charged; 6 phones charged per day, 26 days per month)

  17. Agenda • Overview of FINCA • Client need and demand • Research Results from Uganda and Tanzania • Results of pilot with SHS in Uganda • Operational approach • Client impact • Approach for scale up

  18. Approach for Scale Up • Supplier agreements, FINCA sales force key to success • Lower cost, standardized products • Diversify products- cook stoves, lanterns, etc. • Target more customer segments- business loans, innovative partnerships to reach energy entrepreneurs • Explore savings-related services A pharmacy owner using a solar home system for lighting

  19. Thank You!

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