a woman fills up a jug of water at a water station in Bangladesh Photo by Sohel Parvez Haque, 2017 CGAP Photo Contest

How Digital Finance Boosts Access to Basic Services

Pay-as-you-go (PAYGo) solar loans have emerged as an especially promising solution for energy access. Even in the most remote locations, mobile phones are commonplace. PAYGo loans make it possible for anyone with mobile connectivity to apply for a home solar system via their phone and repay the loan digitally. And because many low-income customers lack collateral to secure a loan, PAYGo uses remote lockout technology to reduce risk for lenders. Meanwhile, as customers pay down their solar loans, they acquire an asset they can leverage for other purposes.

Roughly 1.1 billion people worldwide lack electricity. The problem is particularly dire in Sub-Saharan Africa and Asia. Almost 85 percent of those without power live in rural areas, where it is economically unfeasible to extend electrical grids or brick-and-mortar financial infrastructure for a payments system. However, distributed energy solutions that leverage digital payments open up opportunities to reach millions of people at low cost.  CGAP’s work in energy and financial inclusion focuses on helping PAYGo companies better manage their credit risk, and on helping investors and funders understand how to better evaluate and support these innovative, though unconventional and complex, companies.

Customer Value in PAYGo Energy

Demystifying the PAYGo Business

What does a platypus and a PAYGo solar company have in common? Both are hard to classify. PAYGo solar companies need capital investment if they are to expand and increase energy access and financial inclusion at scale. But interested investors and donors find it difficult to evaluate PAYGo companies’ financial performance and identify good investments. CGAP, IFC and GOGLA are developing a set of standardized key performance indicators (KPIs) that will help PAYGo companies improve their performance and make it easier for funders to analyze which companies would make a sound investment.


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PAYGo PERFORM Initiative

PAYGo PERFORM is an open industry process led by investors, PAYGo executives, and experts in energy and financial inclusion, working to develop a reporting framework and key performance indicators for the PAYGo solar industry. that seeks the active involvement of stakeholders. Learn more about the initiative and how to join.


Additional Resources


This paper analyses the synergies in the distribution of energy and financial services. It describes how an integrated approach could enable financial institutions to profitably serve low-income populations, thus enabling a significant source of growth.

This Brief explains how digital finance is enabling pay-as-you-go energy expansion, which in turn provides a gateway to a range of financial products for the financially excluded.

Globally, over 1.3 billion people lack access to electricity, and another 1 billion people have unreliable connections to national electricity grids. Startup energy enterprises are leveraging digital finance to deliver modern energy to the poor, sold on a pay-as-you-go basis.