BUSINESS MODELS TO LEVERAGE THE DIASPORA TO EXPAND ENERGY ACCESS

Webinar on occasion of the Global Diaspora Week 2015 October 14, 2015

Photo credit: Souradeep Ghosh, Arc Finance

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AGENDA

•  Introduction: Nicola Armacost, Arc Finance

•  Presentation: Dominique Policard, Sogexpress

•  Presentation: Segeni Ng’ethe, MamaMikes

•  Presentation: Mayukh Choudhury, Milaap

•  Questions and Answers

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ABOUT ARC FINANCE

Ø  Established in 2008, Arc Finance is a global non-profit that brings together practitioners, funders, pro-poor enterprises, and end-users to promote access to finance for clean energy and water.

Ø  Our expertise is in providing a neutral platform with the tools, technical services, catalytic investment, and linkages that allow these diverse groups to find common opportunity and achieve mutual benefits.

Ø  Arc operates globally and supports the creation or improvement of energy lending programs in Africa, Asia and Latin America.

Ø  The USAID-funded Renewable Energy Microfinance and Microenterprise Program (REMMP), implemented by Arc Finance, seeks to improve access to clean energy for underserved populations while mitigating climate-damaging emissions.

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SOGEXPRESS: FINANCING SUSTAINABLE ENERGY IN HAITI USING REMITTANCES

Dominique Policard Director, Commercial Affairs

Sogexpress

Photo credit: Arc Finance

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CONTEXT

•  Almost 82% of population have no access to electricity - lowest coverage in Western Hemisphere (before the earthquake)

•  Receives about US$2 billion annually in remittances (about 26% of GDP)

•  Over 1 million Haitians live in the US (40% in New York and 40% in Miami)

Challenge: Arc Finance market research revealed that even before the 2010 earthquake, the ecosystem to deliver electricity in Haiti was under-developed with no functioning suppliers, distributors and financing mechanisms to channel clean energy devices to Haiti. Innovative Solution: To leverage remittance to finance the purchase of clean energy devices, using Sogexpress’s existing and growing branch and agent network as the distribution mechanism.

Haiti (Pop. approx. 10M)

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ABOUT SOGEXPRESS

Société Générale Haitienne de Transferts S.A. (Sogexpress) is the leading money transfer and payment service company in Haiti, with more than 30% of market share in Haiti. Ø  Sogexpress started operations in October 2002 with the goal of offering diversified

payment services through a national network that has high technology standards, efficient operations and competent personnel.

Ø  Sogexpress provides money transfer services as an authorized agent of Western Union. Sogexpress has become an important provider of phones, phone cards and electronic recharge (pap-padap) in Haiti.   

Ø  Sogexpress has national coverage with 59 branch locations in Haiti, and also an extensive network of street agents.

Ø  Sogexpress began its solar initiative through a pilot program in April 2012.

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SOGEXPRESS ENERGY SALES CHANNELS

KlereAyiti.com In collaboration with Western Union Newest program: launched in July 2015 after successful pilot in 2012 Target clients: Haitians of the Diaspora Technology: QuickPay Payment Services Products: Sundaya T-Light Solar Home Systems

Haiti Flagship Stores Products available in 59 flagship stores across Haiti Target clients: Haitian who regularly receive remittances and collect money at the store Technology: new MIS system to track inventory and client data and ensure warranty services Products: EKOTEK and d.light solar lamps

Haiti Street Agents Network Sogexpress has a network of 1,000 street agents who regularly sell Digicel phone time Target clients: Haitians who do not have access to or have poor access to grid electricity Support provided by Sogexpress: consignment, training, loyalty program.

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Delivers to family member in Haiti

•  Money sent via QuickPay to Western Union by family member living in the diaspora.

•  Sogexpress receives notification of payment from WU along with receiver’s information and delivers product.

•  Receiver picks up product in one of the 59 Sogexpress flagship stores in Haiti.

Pay via QuickPay at Western Union

Sogexpress

Haitian diaspora member places order on www.KlereAyiti.com

ENERGY BUSINESS MODEL: USING REMITTANCES AS A SOURCE OF END-USER FINANCING

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KEY ACHIEVEMENTS AND IMPACT

ü  More than 60,000 products sold by Sogexpress as a result of the project as of September 30th 2015

ü  More than 300,000 people benefiting from the use of the products in Haiti

(average 5 members per household) ü  More than 600 agents enrolled as of Sept 30th 2015 ü  More than 10,000 products sold by street agents or during promotional events Huge awareness building efforts on the push and pull side with: ü  More than 1 million remittance recipients reached via direct & indirect marketing

efforts ü  More than 300,000 remittance senders reached via direct & indirect marketing

efforts

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MAMAMIKES: E-COMMERCE FOR CLEAN ENERGY

Click to enter Speaker / Topic

Segeni Ng’ethe Founder and CEO

MamaMikes

Photo credit: MamaMikes

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CONTEXT

•  Only 20% of the total population and 5% of the rural population have access to electricity (as of 2010)

•  Received about US$1.5 billion in remittances in 2015 •  World leader in mobile payments: 80% of those with cell phones (75% of the population) use them for mobile payments through M-Pesa

Challenge: Only 20% of Kenyans, and 5% of rural Kenyans, have access to electricity, and over 15,000 deaths are attributed to household air pollution from cooking in Kenya each year. Innovative Solution: To sell clean energy products through an e-commerce platform used by the Kenyan diaspora and urban Kenyans.

Kenya (Pop. approx. 46m)

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ABOUT MAMAMIKES

MamaMikes is an e-commerce shop for the Kenyan diaspora. Kenyans living in the diaspora buy airtime, shopping vouchers, grocery products, cakes, electronics, flowers, baby gifts and more for delivery to their loved ones in Kenya. The diaspora who use MamaMikes are spread throughout the United States (70%), United Kingdom (15%), Australia, Germany, Canada and more (15%). MamaMikes started retailing clean energy products in November 2014.

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MAMAMIKES E-COMMERCE PLATFORM

Everything started with one impressive stove…

MamaMikes clean energy product sales started with the Jikokoa stove from Burn Manufacturing. Now, MamaMikes offers solar lamps, solar home systems, and cookstoves from three different manufacturers. All products can be purchased online through Mamamikes.com; MamaMikes customers are in contact with MamaMikes through the website, Facebook, Whatsapp, and by phone.

Photo credit: MamaMikes

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MAMAMIKES CUSTOMER PROFILES

Customer groups have distinct purchasing patterns

1.  Kenyan diaspora: purchase products online for family members in both rural and urban areas

2.  Local customers in urban areas: local customers buy products over the phone or in person for their family members in rural areas

3.  Entrepreneurs: purchase

products in bulk for resale in Kenya and neighboring countries

Photo credit: MamaMikes

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MILAAP: CONNECTING THE DIASPORA TO CAUSES AT THE GRASSROOTS

Mayukh Choudhury Co-founder

Milaap

Photo credit: Milaap

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CONTEXT

•  Over 300 million people still lack access to electricity, and over 140 million rural households depend on traditional biomass for cooking

•  Receives over US$70 billion in remittances annually, making it the world’s largest remittance destination

Challenge: The lack of financing mechanisms to make clean energy products affordable for low-income households is a barrier to access modern energy solutions. Innovative Solution: To bring in philanthropic capital, both from individuals and institutions, for on-lending to microfinance institutions to use in their clean energy lending programs.

India (Pop. approx. 1.25 bn)

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THE ROLE OF MILAAP

Create maximum impact of philanthropic capital

Individuals, HNIs, Institutions

www.milaap.org

Beneficiaries, organizations, causes

Sustainable A loan to create

sustained mechanisms

Scalable Driven by state-

of-the-art technology

Accountable Credible

partnerships at the grassroots

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PHILANTHROPIC CAPITAL TO CREATE IMPACT

Options to the Diaspora to choose the cause they care for

Help a family

construct a

sanitation facility

Help a youth train for

meaningful

employment

Help a family get

access to water

Help parents pay for a

child’s education Help a family or

community access

clean energy

Help an entrepreneur

build a micro-

business

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THE MILAAP MODEL: ENGAGING INDIVIDUAL AND INSTITUTIONAL LENDERS

Field Partn

er

Field Partn

er

Milaap aggregates funds across the world

Community organizations Micro-finance institutions, artisan cooperatives, social enterprises

Beneficiaries Households, young people, rural entrepreneurs

Contributors give a loan to Milaap online or offline

Individual lenders across the world

Institutions – foundations, family offices, corporate

$ 100

$ 100

$ 109

$ 104

Raised: USD 6 M Field partners: 35 Lives impacted: 160,000

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PRESENCE: MULTIPLE OPTIONS FOR THE DIASPORA

First micro-

enterprise lending in

Mizoram

Solar lanterns for

families in Manipur

Solar lanterns for

families in eastern UP &

Bihar

Solar lanterns for

families in West

Bengal

Education in Balangir,

Orissa

Only organization to

exclusively finance water &

sanitation

Help trafficked women

establish their own

businesses

Help artisans in

Gujarat build

businesses

Artisans of

Kashmir

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PRODUCT OFFERING: TECHNOLOGY ENABLED PRODUCTS TO ADDRESS NEEDS

HNI / Foundations Impact investment

•  Maximize impact of

philanthropic funds

•  Scalable platform – can drive

disruption

•  Transparent – detailed

impact reports, real time

monitoring

Individuals Crowdfunding platform

•  Lend as little as USD 25

•  Choice of individual profiles

of borrowers

•  Easy: Create an impact from

a mobile phone, in just a click

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THANK YOU FOR ATTENDING!

Questions? Want to get involved? Send us an email at info@arcfinance.org, and stay connected with us through our online channels:

Arc Finance

@arc_finance

Arc Finance Ltd

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