http://www.gvepinternational.org/en/business/news/creating-successful-tripartite-partnership-rolling-out-energy-products-women-kenya
Creating a Successful Tripartite Partnership on rolling out Energy Products to Women in Kenya | GVEP
Posted by Alessandra 14 Dec 2010
An innovative partnership between GVEP International, Women Enterprise Development Institute (WEDI) and Brazafrique is accelerating access to solar lanterns for people living in the Central Province of Kenya.
WEDI is a fund manager with a portfolio of 800 women’s savings and credit groups operating in the larger Central Province of Kenya. Their mission is to stimulate self-reliance and initiate development through promoting savings and lending activities among women’s groups. “WEDI runs a project through which member groups are introduced to various technology products and if interested individual members can borrow and buy from their savings”- explained WEDI’s Director Jamleck Mugo.
Award winning D.light solar lamp. Photo: courtesy of Ashden Awards for sustainable energy
In early 2010, GVEP International contacted Mr. Jamleck Mugo, to introduce energy products to the 800 (and growing) women’s savings groups that he manages. WEDI realised that energy was a key component that affected the lives of the women that it serves and this generated interest in offering energy solutions in the form of LED lanterns. As a result, GVEP International introduced Mr. Mugo and some of his team members to Brazafric, suppliers of the award winning D.Light solar LED lamps, a potential lighting product for rolling out to the groups.
Seeing the benefits of the lighting products to the women and a financial opportunity, WEDI placed an order soon after the meeting for the first batch of lighting products. To absorb initial risks, a tripartite supplier guarantee arrangement was signed between GVEP International, Women Enterprise Development Institute (WEDI) and BrazAfric with an agreement that GVEP International will stand as a partial risk guarantor to the supplier through a loan guarantee scheme.
More than 90 percent of WEDIs groups are women only savings group. Each group has 30 members who mobilise group savings and lending amongst themselves. With a mission ‘to stimulate self-reliance and initiate development through promoting savings and lending activities among women’s groups’ WEDI was started mainly to gain independence from donor funding and create localised funds for socio economic development.
Within the tripartite agreement, BrazAfric supplies the lamps to WEDI, who then distribute them to its member groups. WEDI being the fund manager collects a deposit of 50% of the cost of the LED lamp from the customers, and the other 50% is paid in three equal instalments. WEDI manages all the back office work which includes collection of the 50% down payment, delivery of LED lamps to the group members and loan tracking. The first LED orders from WEDI were delivered in mid March 2010. By September, WEDI had already sold over 400 LED solar lanterns as a result of the project intervention.
The LED solar lamps not only serve as sustainable energy solutions to the women and their families, but will also save household budgets for lighting fuel spent on kerosene. The most successful product has been the Nova S250 which won an award from Lighting Africa in 2010. The lantern includes a popular phone charging facility. With communications technologies spreading fast in rural East Africa, mobile phone charging is expensive. A product that combines both lighting and phone charging is therefore a sure winner. Payback rates for a household can be as low as 4 to 6 months.
With funding support from the United States International Development Agency (USAID), GVEP International has been successfully partnering with WEDI throughout 2010. Key to the whole programme has been the various awareness sessions and trainings for WEDI’s twenty five loan officers who are key motivators for the ‘project’. The success of the scheme also results from the incentive schemes in the supply chain. WEDI who manages the project as a whole receives the LED lamps at a wholesale price and each loan officer who is responsible for the deployment of the lamps receives KES 100 (~US$1.25) for each lamp that is sold.
The women receive the lamps and can pay in instalments through their savings scheme. ‘‘With over 800 member groups and a total membership of 24,000 women, WEDI has great potential to accelerate access to sustainable energy solutions to many beneficiaries in Kenya’’ says Phyllis Kariuki, GVEP International’s Finance Expert in Nairobi who has been tailoring the scheme to the group’s needs. Further, she says “We guaranteed a total sum of £6600 to support BrazAfric, in the event of a missed payment. We have also trained 25 loan officers from WEDI to equip them with knowledge on LED technology, so as to address any minor technological challenges that might arise whilst using these solar lanterns”.
In an interview with WEDI’s Director, it emerged that the LED solar lamps have become so popular that the demand for them seems to have exceeded their supply. ‘’There are great opportunities in this type of energy business – says Mr. Mugo. “We hope to consolidate our relationship with Brazafric and GVEP International, so to ensure an adequate supply of products for our members.” Further, WEDI believes that this partnership can have a real empowering impact on the lives of the women themselves. “Given the demand for affordable, energy efficient lamps, they can learn to depend on themselves and their business, instead of relying on external livelihood support systems, which are not sustainable.”
Because of the lamps, WEDI is receiving many inquiries from women in other localities. For WEDI, this is a positive impact on their core business itself. If new groups can be formed because of the lighting products, business will expand both for the fund and from the energy project itself. In addition, since the funds in the women’s groups are revolving, the groups have been able to earn income as a result of selling LEDs to members of the group. By September, WEDI has traded LEDs from Brazafric worth KES 1,182,000 (~ US$14,962).
For successful partnerships to occur, it is absolutely important to combine resources towards the common goal. While WEDI pushes for sales, Brazafric is committed to supplying quality products and replacing faulty products if any on time. GVEP International provides the bridging support needed through trainings and regular meetings apart from the loan guarantee itself. One of the key lessons learnt by GVEP International in the experience of working with WEDI is that smaller Savings and Credit Co-operatives (SACCOs) and Group Fund Managers are able to push the sales of low end renewable energy products faster than the formal and big financial institutions. WEDI and GVEP International plan to start a portfolio around another energy product, potentially cookstoves.
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