SOLAR ENERGY THROUGH DIGITAL FINANCIAL SERVICES

About Solution

Uptake and usage of digital financial services among rural households in Uganda, especially served by savings groups is very low. However, new opportunities exist for triggering uptake and usage of Digital Financial Services through technology-enabled pay-go solar products, which also improve the quality of lives for the beneficiaries.

By design, few projects target rural households in savings groups with technology-enabled renewable energy products as an entry point for Digital Financial Services. Most of the current initiatives that are promoted by Non Governmental Organisations are by design time-bound, and mostly do not combine their interventions with digital financial services, and where they do, it is an end and not a means to an end, leading to low usage. On the other hand, few savings groups’ promoters have a deliberate alignment of clean energy products as an add-on to their savings groups’ activities. Instead, focus has been on linkages to formal financial services with little results as witnessed in the dormancy of accounts by banks. Other projects either integrate savings groups in health and agricultural programs or completely expand savings groups as standalone projects.

However, there is evidence where international NGOs have sought partnerships with solar energy companies. CARE International and Catholic Relief Services in Kenya have linked solar energy companies to their savings groups, Village Savings and Loan Associations but these initiatives came to an end with project closure. Most of these Non Governmental Organisations initiatives are usually time-bound, leave out local entrepreneurs and don’t have sustainable business models as an exit strategy in their project design.

This project is designed to work with local entrepreneurs who can serve these groups through their outlets in the long term (post-project). Introducing Digital Financial Services through technology-enabled solar lamps has a triple-bottom-line effect to the beneficiaries. This include: enhancing financial inclusion and safety of group funds through Digital Financial Services; Innovating savings groups product offerings; and improving the quality of life for rural households through solar lighting.The above business propositions combine innovations within the group fund, build on the existing savings groups infrastructure in rural areas while creating employment and business opportunities among rural youth and women actors. The purpose is to have a socially viable project that is financially sustainable and environmentally smart.

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