Making Clean Technology A Viable Business for Women in Africa
Energy poverty, climate change, financial inclusion and women empowerment are all closely related. Of the 1.6 billion people globally without access to electricity, 70% are women and girls. They depend on kerosene lamps and candles for most basic lighting needs, which is a public health burden due to indoor air pollution and fire hazard. Add to this, the rising costs of a piecemeal dependence on kerosene. This begs the question, how can we build a green economy that addresses this very fundamental need – energy for light – in a way that is gender inclusive?
Solar Sister provides one answer by providing women in Africa with an opportunity to become clean energy evangelists through a model that embraces enterprise while reducing the financial hurdle for launching a business in an emerging market. Solar Sister’s model combines the breakthrough potential of portable solar technologies with a women-driven, micro-consignment enabled direct sales network to improve rural energy access (See Figure 1). In doing so, it is bridging both the geographic and cultural chasms of energy poverty for the rural demographic at large, and for women in particular.
Micro-consignment: First step to a green collar business
A World Bank study has shown that women have lower access to finance than men in many African countries and they tend to rely more on informal sources of capital and personal money management than men. This lack of access to finance impedes female entrepreneurship and prevents women from participating in the modern market economy. Solar Sister overcomes this by offering rural women a chance to make a sustained living through a micro-consignment based “business in a bag” that minimizes the start-up financial risk and makes the business entry point more lucrative (Figure 2). The bag includes a full start-up kit of training, marketing support and access to an inventory of clean energy products. The women earn a commission on each sale and return the rest to pay for the cost of inventory and an operating margin after they sell the product. Through this method, Solar Sister combines women’s microenterprises with financial inclusion while meeting environmental goals.
This approach enhances financial access for rural women with entrepreneurial aspirations who are new to organized business and lack the financial muscle and confidence to take a microfinance loan. The micro-consignment model is flexible, scalable and adaptable with low fixed costs, and leverages rural women’s role as the primary consumers of household energy, their sway on household purchase decisions, and the power of their word of mouth marketing. Every dollar invested in a Solar Sister Entrepreneur generates over $46 in economic benefits in the first year, through earned income for the Solar Sister Entrepreneur, and the immediate cash savings of her customers as they avoid the cost of kerosene.
Product quality, design and affordability are the key criteria for selecting Solar Sister’s technology partners. Entrepreneurs provide customer choice by bringing a range of portable solar products (for lighting, mobile phone charging and radio charging needs at present) to customers’ doorsteps. Customers can select which brand and products meets their specific needs – for example, a task light for reading or cooking, ambient light for a family room or a shop or a rugged light plus mobile phone charger. Solar Sister’s present product partners include joint IFC and World Bank program Lighting Africa program award winners like d.lightdesign, Barefoot Power and Greenlight Planet, the world’s first solar light bulb maker Nokero and United to Light.
Solar Sister started in early 2010 with 10 women entrepreneurs and has since grown to 143 in Uganda, Rwanda and South Sudan. Together, these entrepreneurs have brought the benefits of clean energy to over 17,000 people. The goal is to build a Sub-Saharan network of 5,000 entrepreneurs in 5 countries over next five years. To make this happen, Solar Sister is developing partnerships with crowd funding organizations like Kiva to provide inventory to a growing network of entrepreneurs who want to make the most of this business opportunity. Innovative linkages with Micro-finance Institutions to bundle clean energy products assistance with existing loan programs (for example, for education or small businesses) could be one way forward to make the products accessible to even larger number of people.