|Startup group Solar Sister is a 'business in a bag' working in several African countries to bring affordable lighting to families. Courtesy of Dowser.org|
One-year-old start up Solar Sister is using cosmetics company AVON's model to distribute solar energy in Uganda, Sudan, and Rwanda. To learn more about the ďbusiness in a bagĒ model that's giving rural African women an income and a renewable light source, Dowser spoke to Katherine Lucey, Solar Sister's founder.
What was the problem you saw and how could you fill that need in a unique way?
Lucey: Problem: Gender-based technology gap in rural Africa. When I was doing work for a nonprofit that was installing solar energy in schools, clinics, and rural homes, the maintenance of the project, the adaptation of the solar wasnít very good because weíd return a year later and find that 50 percent of the systems were not functioning. It was a very high fail rate.
In rural Uganda, where 95 percent of the homes donít have electricity, solar technology is a distributable energy source; so, itís a very good solution to clean rural energy or actually, rural energy period. It just happens to be clean as well.
Also, the technology that we were using Ė the solar panel, the PVC, etc., was very "techie" and we were in homes where there was no technology. So, the women didnít have a comfort zone with the technology that we were bringing into their home.
We realized that the women are responsible for the solar panel Ė itís a household utility. So, thereís a gender gap there for technology. And thatís not specific to Uganda. Itís an issue here at home as well when you look at the gender ratio in science and math. It leans towards men.
Thatís how I started thinking about how we can close that gap.
And the solution?
The AVON model for solar energy.
At the time that I was developing this idea, the design of the solar lamps became micro-solar. These are designed specifically for BoP [Base of the Pyramid] application. Theyíre rugged, very intuitive to use, affordable, and readily available. And itís not as "techie;" itís really just a light. So, the gap bridged. All of a sudden itís a lot easier for women to use. You stick it out during the day; you bring it in at night; you flip a switch and you have light to read, cook, and even a source to charge your phone.
Itís also 1/10th the cost of a home solar system so itís within the price point of these homes. They can range from $15 to $50, and when youíre already paying $2 a week for kerosene, itís an investment that will pay off in a few months because youíll no longer have to pay for an energy source. They use those extra funds then for better food, health care, and schooling fees.
And the price continues to drop as the technology evolves.
Did Solar Sisters pair with a micro-finance institution (MFI) to provide women entrepreneurs the initial capital needed for this "business in a bag" model?
No. Rather Solar Sister uses a "micro consignment" model versus micro franchise. These women donít have to pay the franchise cost up front and we donít work with MFIs.
For example, we had a lady, Viola, who signed up to be an entrepreneur. But she had just had a baby so was not able to sell immediately. If she had taken out a loan then she would have had to start paying back within a week or so. That would have been difficult in her situation and put her collateral at risk Ė her home.
Rather, we want them to sell and our intent is not to make money off the interest rates. So, we extend a loan ourselves by providing them the inventory.
In handling the finances, do you utilize mobile banking or other forms of banking?
Yes! In Uganda, 5 percent of people in rural Uganda have electricity but 80-85 percent have a phone. Not only do they have one phone but four phones for different calling plans and mobile carriers to get the cheapest rates. In fact, with solar energy, many women are able to charge the phones of their neighbors for 25 cents and provide a service. So, itís another source of income.
And yes, we use mobile banking and SMSs to communicate with the entrepreneurs and streamline funds. It makes the operation much more efficient.
Have you had any default cases?
Yes, weíve had women who have sampled it and decided itís not for them so theyíve bought the lamps themselves that are in inventory or returned them to us and thatís alright. Thatís not a problem. We understand.
What propelled you to focus on this particular issue Ė energy poverty?
My background was in energy so I was sensitized to the idea that energy is fundamental to development. My work experience was on a much bigger scale, though Ė developing large plants and big-scale economic development. But as I left that post, I knew that the same principles apply at the home level, the grass-roots.
I was really interested in microcredit and how it was giving access to financial services. But I saw that there was this same need on the energy side Ė access to energy in a way that they could do it at the grass-roots level. The will of government wasnít there; waiting for the government to solve the rural energy problem was not the answer. We needed a solution that was closer at hand.
Solar is the most democratic Ė we all live under the sun. Energy is free and the equipment is a one-time cost. Compare that with cost of burning wood or kerosene, and [the] health issues involved. The cost is extremely high. Thatís why I went with solar.
When you come back to the States, do you wonder why canít we do some of these ideas on a more grass-roots level at home?
For those in Uganda, the cost of solar is much cheaper. Theyíre paying 20-30 percent of their income on energy already. We donít pay that much. And if we were to put in solar equipment, it would require us to spend a bit more. So, we think of solar as a luxury, which makes it harder to implement here.
Youíve been in this startup mode for a year, any hiccups along the way?
We met this one lady who seemed like a great businesswoman, had a lot of potential, and we thought sheíd make a great entrepreneur. But after the initial box of lamps she took from us, we never heard from her again. So, we got back in touch and asked her how the experience was. She told us that sheíd sold the box and it was a wonderful opportunity. But why didnít she ask for more lamps? Sh responded, that she thought it was just a one-time opportunity.
So, I found myself wondering how did we not convey this correctly that this is an ongoing business opportunity, not a one time thing?
Sometimes, such simple details make you realize flaws that you couldnít have conceived because we just assumed that these ladies would come back to us when they wanted more inventory.
With these lessons in mind, what do you say to other budding social entrepreneurs?
Be committed and open to learning. Thatís the key. Just stick with it and be open during the process of developing your idea/organization.
Youíre working with Ashoka as a changemaker. How do you see this model as being scalable?
Weíre partnering with womenís groups who have been working in the community for 10-20 years. By doing such partnerships, weíre able to use their foundation and their local knowledge. The biggest challenge in scaling is actually identifying funding partners, should it be a developing impact investor, philanthropic organization, or some other entity. So, what we need to do is really become the experts in our business. Women can sell a lot of items. Solar energy is one of them, and itís one mode to economic freedom.