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 Approach for scale up

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.

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

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

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

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

ProductCostLifetimeValue:Warranty Lantern: Solata/ Firefly 22,500 ($15) 30,000 ($20) 4 yearsFirefly has phone charging 1 yr Lantern: Nova 65,000 ($43)4 yearsPhone charging 1yr Small SHS: PowaPack 160,000 ($107) 5 yearsPhone charging, 4 lights 1 yr Products Tested in Market Research- Tanzania

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

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

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

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 Impact on Business Impact on Health Impact on Education Impact on Savings * Based on a survey of 56 clients. 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.

14 Client Are Using SHS for Business Purposes Client Feedback on Business Benefits of SHS Kerosene cost savings83% Mobile charging cost savings75% Attracting more clients67% Longer operating hours58% Increased income50% Modern looking42% Expanding business38% Other8% No benefit0% Impact on Business Impact on Health Impact on Education Impact on Savings 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. Based on a survey of 56 clients.

15 Impact Assessment Results Show Clients Feel They are Saving Money with SHS Weekly Expenses Before and After SHS* Weekly Kerosene Expenses Weekly Mobile Expenses Frequenc y before SHS Frequency after SHS Frequency before SHS Frequency after SHS No costs Under 1, ,000 – 1, ,000 – 4, ,000 plus9062 Impact on Business Impact on Health Impact on Education Impact on Savings * 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 Impact on Business Impact on Health Impact on Education Impact on Savings 10 W System for hh use New Product- hh use Cost is 20-25% of 10 W system 5W but same functionality as 10 W 20 W system for business use; charge up to 6 phones daily Loan repayment (monthly) 60,000 UGS14,000136,000 Kerosine savings (monthly) 8,600 Savings on phone charging (monthly) 6,000 Revenue- mobile phone charging* (monthly) 80,000 Breakeven17-18 months4.5 months (within repayment period) 7 months Ongoing benefit after breakeven (net of maintenance) 11,600Assume no change101,600 *Assuming 500 UGS per phone charged; 6 phones charged per day, 26 days per month)

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

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

Thank You!