MFIs, SACCOs Key to Clean Lighting for Women

Micro-finance institutions provide a strong entry point for reaching women as end-users of solar lighting products, as well as for recruiting them as solar entrepreneurs, a new Lighting Africa survey has found.

The survey, undertaken in Kenya’s four key markets of modern solar lights – Nyanza, Central, Nairobi and the Coastal regions, found that women access credit primarily through micro-finance institutions (MFIs), and savings and credit cooperative societies (SACCOs).

The study found that all but one of the 16 MFIs and SACCOs surveyed had on-going strong working relationship with women, who comprise between 51% and 100% of the clientele or the membership.

The survey documented a “strong appetite” among both the MFIs and SACCOs to step up and expand their work with women through Lighting Africa’s Women Initiative in order to catalyze further uptake of the solar lighting products by women consumers, and to usher women into the fast growing solar lighting market in Kenya.

The survey documented the emergence of women groups such as Women Enterprise Development Institute (WEDI) and others supported by NGOs such as CARE and projects like the USAID-funded health APHIAPLUS, which mobilize savings and advance the pooled resources as loans for entrepreneurial activities such as selling solar lanterns.

It established that a good number of these financial organizations were already working with suppliers and distributors of portable solar lights, but found that most work with only one supplier limiting consumer choice.

Lighting Africa will formally present these findings to women groups identified by the survey and its partner manufacturers and distributors at a stakeholders’ meeting scheduled for early May.

The key constraints these organizations cited for limited engagement with women in the solar lighting sector include inconsistent product supply which inflates the cost of credit costs as a result of prospective consumers starting repay loans even before receiving their solar lanterns.

“This ends up making the loan more expensive as consumers have to start servicing it upon signing which results to loss of confidence on the solar lighting products as well increased possibility of loan delinquency and default,” the survey report notes.

The MFIs and SACCOs also lamented an inability to distinguish quality lanterns from those of unknown and untested quality both on their part, and on the part of their clientele. Poor product service and maintenance outlets in rural areas also undermine financing of the sub-sector.

They recommended deliberate effort by programs and initiatives such as Lighting Africa to connect them to credible suppliers and distributors of quality solar lighting products with whom they could forge partnerships that would strengthen the solar lights’ supply chain.

They also saw value in product training sessions for their staff to increase their own awareness and capacity to understand modern solar lighting products so that they could structure better credit products for their clientele, especially women.

“For the catalytic effect to be felt among the women clients and entrepreneurs, they expressed a strong need to undertake a dedicated consumer education on the benefits of using clean lighting vis-à-vis traditional lighting products namely kerosene and candles,” the survey report notes.