How to meet the solar needs of the rural poor — 3 lessons learned
by Agnes Cho, program associate, Global Partnerships
Recently, Global Partnerships and Solubrite, a solar distribution company in Nicaragua, worked together to organize a one-day workshop in Ocotal, a city in northern Nicaragua and home to GP’s partner, FUNDENUSE. I attended the training to share with FUNDENUSE’s credit officers what we at Global Partnerships have learned during our two years of experience of working in the off-grid lighting space in Latin America.
The purpose of the workshop was to train FUNDENUSE's credit officers in the technical aspects of solar products and share with them effective sales strategies to use when pitching them to their clients. Small solar lights and plug-and-play home systems are relatively new products to enter the market in Latin America. For the most part, they remain an unfamiliar technology to both the people living in off-grid communities as well as the credit officers that work with them. Facilitating this knowledge transfer and familiarizing the buyers and sellers of these solar products is integral to the development of this new sector in Latin America.
Observations from the training session
During the workshop, I led an exercise and had each credit officer in attendance write down several reasons why their clients do and do not want to buy a solar product.
Examples of reasons for solar
- To attain a higher standard of living
- Less harmful to your health
- To charge other electronics, such as a cell phone
- To save money
- Easy and practical to install and use
- To be able to work and study at night
Examples of reasons against solar
- Lack of ability to pay
- Limited capacity
- Lack of trust in quality and durability
Just from these several hours, we learned a few things about what drives demand for solar lights amongst poor, rural communities in Nicaragua.
1. Solar distributors should offer a range of products, from simple solar lamps to aspirational products like TVs.
- The first thing that rural customers want is a better light, and a solar lamp is as a cleaner and safer alternative to kerosene and candles. This is why we are supporting small light distribution, to build the early rungs of the energy ladder that enable rural families to begin climbing. And once they start climbing, people are interested in a solar product with additional functionality.
- Our experiences with Franco, one of FUNDENUSE’s solar clients, clearly illustrates this point. In his home, he has a Barefoot Connect 600, a small plug-and-play home system, which he uses to light up his house and charge his cell phone and portable DVD player. But not many people in his town in the mountains of northern Nicaragua can afford such a system. Understanding this constraint and yet wanting to spread solar technology in his community, Franco took out a loan to buy and resell five Sun King Mobiles, a solar lamp with phone charging capacity, to his friends and neighbors. Although his customers eventually want more lights and more solar power in their home, they all started with a smaller lamp. Solar distributors should be aware of this range of demand and capacity to pay and have the appropriate products available to offer their rural customers.
2. Poor customers want high-quality products
- Anecdotally, I’ve heard about how in Latin America, some people have had the misfortune of spending a lot to buy cheap products that broke down soon after. Whether this is true or not, people are wary of spending a lot of money on items that are “Made in China”. In fact, I wish I had a cordoba for each time I heard during the workshop, “It’s not a Chinese product.”
- To address this, the Solubrite trainer emphasized a clear distinction between generic, poorly-designed products made in China and high-quality products designed by international companies that are manufactured in China. Solubrite also spent considerable time convincing the credit officers of the durability and quality of these lights. This goes to show how rural Nicaraguans are looking for the highest quality product that will not break down and those who sell solar lamps to the BOP must be conscientious of the low confidence in the technology. Because even more so than the rest of us, the rural BOP cannot afford to purchase a cheap, flimsy product.
3. Seeing is believing
- During the workshop, credit officers explained that their job of promoting the solar lamps would be a lot easier if they could travel to the field with the lights and show, on the spot, the technology and product to their clients. This has to do with the relative novelty of solar lights. Credit officers want to give their clients the opportunity to see the light with their own eyes and feel it in their own hands. By doing so, they find that it is easier to interest and convince people of the benefits of solar energy.
Central to GP’s thesis of investing in last-mile partners is their access to rural, off-grid communities. By contributing to the training of FUNDENUSE’s credit officers, we ensure that the very people who are reaching these last-mile households are well educated about solar technology. It is also a great opportunity for us to learn from our partners’ challenges and collective experiences to further the goal of expanding solar energy in Nicaragua.
Investors Report for fourth quarter of 2014
In our Investors Report for the fourth quarter of 2014:
- Our Chief Investment and Operating Officer, Mark Coffey, highlights Global Partnerships’ work in rural livelihoods, the challenges in serving small-lot farmers, and promising new channels to deliver credit, technical assistance and market access. (read here).
- We take a deeper look at APROCASSI, a Peruvian agricultural cooperative that serves small-scale coffee farmers in the northern region of that country. (read here).
- We provide updates on our Social Investment Funds' performance (read here).
Global Partnerships in the news
- In Impact Investor Global Partnerships Invests in Solar to Connect the Poor with Light, The Huffington Post speaks with GP's Chief Impact & Research Officer Peter Bladin about the challenge of connecting poor off-grid communities with access to solar lights. Peter explains, "Solar lights for poor people living off the grid are likely to scale the way cell phones have in the developing world over the last 15 years. [...] The case for solar is extremely compelling but social enterprises serving the base of the pyramid need working capital to scale product development, manufacturing and distribution." Click to read more news >
- In Reaching the Neediest, OPIC interviews GP President & CEO Rick Beckett about the challenge of using impact investing to reach the poor, and about the impact of integrating credit with services. Rick says,"The challenge is that the deeper we go into poverty or the further we go into remote places, the more difficult it is to make markets work. The economics just get harder. The poorer people are, the fewer resources they have to purchase anything, and the more remote their living conditions, the more expensive it often is to reach them. But we can make progress 'extending the frontier' if we’re willing to think differently and try innovative approaches." Click to read more >
Meet KJ, GP’s new impact evaluation officer
Part of our work as a nonprofit impact investor is measuring and evaluating the social impact of our investments. To help us double down on impact evaluation, we recently expanded our Impact and Research team to include KJ Zunigha, our new impact evaluation officer. Get to know KJ in this Q&A, and tweet any questions you have for KJ @GPSocialImpact.
1. What is your role at GP and what is your background?
I have the exciting and challenging job of measuring the social impact of GP’s investments! Here at GP we are very purposeful in selecting quality partners that deliver impact, and so I work closely with the Social Investment Team and directly with our partners to collect and report data that demonstrates the lives impacted by our investments. My previous role was at the global health organization, PATH, on their Monitoring and Evaluation team.
2. Why is impact evaluation important?
Impact evaluation is critical because it allows us to understand our contribution to the lives we aim to serve.
We are constantly assessing our work and seeking ways to maximize our impact. Ultimately we aim to make impact at the household level and evaluating our work helps us to do that in smarter, more sustainable ways.
3. What are some challenges in evaluating impact?
There are so many different ways and levels of rigor in which to evaluate impact, ranging from interviews with individual clients to large-scale randomized control trials, and everything in between.
All organizations struggle to some degree in determining the most appropriate ways to evaluate impact. There isn’t a one-size-fits-all approach.
Here at GP we are committed to constantly assessing and balancing the time and resources we put into evaluation, and making sure they are appropriate to the size and scale of our partners and investments.
4. What is one impact evaluation project that GP is currently working on?
Good question! As I just started at GP I am currently learning who our partners are and understanding how we currently measure impact. GP already does a great job of quantifying the lives impacted by our investments, so I aim to now identify a couple partners to do some deep-dive impact studies.
5. What motivates you to do what you do?
I think one of my biggest motivators for doing this work is the challenge it presents. It is a difficult job to measure social impact because we are tackling really complex, deep-rooted problems!
You can design a perfect study or evaluation plan, but then there are always new on-the-ground factors and challenges that keep things interesting and force you to adapt your thinking and approaches. My own beliefs and theories are constantly evolving and I can’t imagine doing a job that didn’t challenge me on a daily basis.
If you enjoyed this post, you might also like:
- Why is measuring impact so complex?
- Venturing into uncharted territory: impact measurement
- To better understand its impact, Global Partnerships joins ANDE
2015: A pivotal year for people living in poverty
This could be a pivotal year for people living in poverty as world leaders converge at two critical summits – the U.N. General Assembly and the U.N. Climate Change Conference – to shape the global development agenda. Though these meetings take place annually, 2015 will be different. The stakes are higher. Why?
What's next after the Millennium Development Goals?
The Millennium Development Goals (MDGs) are a set of eight goals that were created by the United Nations in 2000 to address extreme poverty. The goals included reducing extreme poverty and hunger, achieving universal primary education and increasing access to education. Quantifiable targets for each goal were set and the deadline to achieve them is this year – 2015. The U.N. will now need to pass a new set of goals called the Sustainable Development Goals (SDGs) at their annual summit in New York this September. This new set of goals will target eradicating extreme poverty, reducing inequality and increasing our planet’s sustainability.
Why this matters:
This unity behind a common set of goals contributed to several important MDGs being achieved, including the reduction of extreme poverty by half (accomplished ahead of schedule in 2005). Though some targets will not be met on time, a great amount of progress was made across all eight MDGs. In order to maintain this momentum, a new set of goals – the SDGs – needs to approved.
Climate change and poverty are linked
The U.N. Climate Change Conference is slated to take place in Paris in December, during which time world leaders will try to reach a binding agreement on measures that can curb climate change. Reaching an agreement will be critical to lowering greenhouse gas emissions in order to prevent global temperature rise from breaching levels that will cause dangerous and irreversible damage to the climate.
Why this matters:
Climate change affects all seven billion people living on the planet but it disproportionately impacts the poor. The poor have fewer resources to recover from
climate events that cause crops to fail, food and water shortages and destruction of infrastructure. World Bank President Jim Yong Kim has repeatedly said,
“The poor will be hit first and hardest. This means that the people who are least responsible for raising the Earth’s temperature may suffer the gravest consequences from global warming. That is fundamentally unfair.”
Kicking off this year of critical global development discussions is the World Economic Forum’s annual meeting this week in Davos-Klosters, Switzerland. As a nonprofit impact investor, we hope that world leaders can come together and agree upon a path to a future with more opportunities for people living in poverty.
Traveling with purpose: Witnessing impact in Guatemala
by Peter Solar, former donor relations officer, Global Partnerships
Donor travel has become a valuable and compelling way for nonprofit organizations working on international initiatives to engage their supporters and bring them closer to our work. Understanding the value of firsthand interaction, Global Partnerships offers its donors and investors an opportunity to travel on one of our “Impact Journeys” and deepen their appreciation and understanding of programs, communities and people to whom they commit their resources.
Our Impact Journeys are designed to allow our supporters to meet and interact with our partners and their clients in their homes and businesses and learn about their successes, challenges and dreams. In addition, our travelers get a better sense of the cultural, socio-economic and political climate of the host country through interactions with our staff, partner representatives and foreign affairs specialists.
In late November, we took a group of donors and investors on a visit to Guatemala. Less than three hours by air from Houston, Guatemala is a captivating country with rich culture, history and people full of hope and entrepreneurial spirit. Although the country is troubled by a wide array of problems, the partners we work with in Guatemala offer a unique glimpse into market-sustained solutions that have the potential to empower communities living in poverty.
In the western highlands of Guatemala, we met with our partner Friendship Bridge, a nonprofit microfinance institution dedicated to improving the lives of impoverished women in rural Guatemala through credit and education. We traveled to two village bank meetings that enabled us to see the effectiveness of the village bank methodology in action.
In each of the meetings, we saw small groups of Maya women discussing topics such as managing earnings or borrowing funds responsibly, all in their native language Kakchiquel. Elevating the experience was the opportunity to listen to their conversations, witness the atmosphere and share the laughter with these courageous, inspiring and warmhearted women.
We also got the opportunity to get our shoes dirty and visit one of the local farms with FUNDEA, our partner organization that primarily empowers farmers through loans and technical assistance. Here, we had an opportunity to witness the importance of technical assistance and the positive outcomes of agricultural practices such as drip irrigation, crop diversification, or organic practices implemented thanks to FUNDEA’s program.
Recognizing the importance of investing in women, FUNDEA also works with women's groups. We met with some of the groups that participate in their pilot program known as Credimujer, which provides their clients with credit and essential services such as preventive care, vaccinations and pediatric care for their children. Although FUNDEA’s product differs from that of the Friendship Bridge, our interactions with their clients have been equally inspiring and empowering and offered a comprehensive insight into the breadth of business models we support.
On our visit to Guatemala, we traveled in boats, ventured across rough roads, made our way through cornfields and even rode in the back of a pickup truck to witness the impact of Global Partnerships’ investments. At the end of the day, our group appreciated the opportunity to catch our breath and reflect on our experiences over a delightful and unhurried meal that much more.
The GP Impact Journey program leaves lasting impression on people who travel. Humbling. Eye-opening. Life-changing. Amazing. These are just some of the words that repeatedly come up when our travelers look back on the meetings, conversations and adventures from the trip and realize the sheer power of their friendship and support.
We hope to share our travelers’ insights from our visit to Guatemala with you soon. In the meantime, we invite you to look at some of the photographs we took along the way and learn more about our upcoming journey to Peru!
3 keys to building a sustainable health services program
by Agnes Cho, program associate, Global Partnerships
As a Global Partnerships program associate, a position partially funded by the Princeton in Latin America Fellowship, I have been working with GP’s Program & Impact team since September to support GP’s health and green technology initiatives. For one year, I will be based out of GP’s office in Nicaragua and working onsite with our partners to help implement and evaluate their programmatic work. I’ll be reporting back here with regular updates from the field!
Most recently, I spent three weeks in Honduras to collaborate closely with COMIXMUL/FUDEIMFA as they strengthen their community pharmacy program and work towards a sustainable business model. Their community pharmacy program utilizes a network of women in rural communities to operate home-based pharmacies; these pharmacies provide vital access to anti-diarrheal medications, painkillers, and other kinds of pharmaceuticals.
Since partnering with GP in 2012, COMIXMUL/FUDEIMFA has been looking for ways to achieve financial sustainability, increase medicine sales, and further support their dispensadoras (the women who operate the pharmacies from their homes) and the community promoters (they facilitate communication between the dispensadoras and COMIXMUL/FUDEIMFA).
Over the course of working with Global Partnerships, COMIXMUL/FUDEIMFA has implemented a few changes to their business model, which have been outlined in a previous blog post. Earlier this year, they scaled to 301 community pharmacies, established a 10 percent commission for their dispensadoras to incentivize higher sales, and adopted a smarter purchasing strategy to stock the quantity and kinds of medicines that have proven to sell.
During my visit, I interviewed 41 dispensadoras and all six community promoters to hear from their perspective what it takes to build a sustainable program. Here are the results of those conversations:
1) Selecting and supporting the right dispensadoras
- The most successful and motivated dispensadoras had prior experience working in the health sector, either as a nurse or as a volunteer for the public centro de salud. They are already recognized and trusted in their communities as a source of medical knowledge.
- However, COMIXMUL/FUDEIMFA also works with women without health experience, which requires extensive training and support (i.e. training workshops, a manual, the phone number of a nurse that can be reached in moments of doubt or emergencies).
This point is often emphasized by organizations that implement microentrepreneurship programs, such those I met at the FOMIN/IDB conference in September, entitled “Accessing New Markets through Inclusive Distribution Networks.” In the various working groups during the conference, there were many conversations about the necessary conditions for a true win-win micro-enterprise created by and for the bottom of the pyramid. I was happy to find that the two factors that were highlighted throughout the conference were a central part of COMIXMUL/FUDEIMFA’s pharmacy program:
1. Thorough and continuous training and support of the microentrepreneur; and
2. Financial risk sharing so the microentrepreneur won’t be burdened with the entire cost of failure.
In my interviews, I found that dispensadoras that have received more training by COMIXMUL/FUDEIMFA were more likely to sell more medicine and report higher self-confidence in their health knowledge and business skills.
2) Clear communication between the dispensadora and the community promoter
- Currently, the six community promoters make monthly supervision visits to all 301 pharmacies. In these visits, the primary objective is to record the inventory and restock the pharmacy. However, the supervision visits can also be used as a way to listen to and incorporate the advice of the dispensadora. During the hour or so that is spent with the dispensadora, the promoter learns from her which medicines are in demand, which prices are set too high, and upcoming activities, such as public medical brigades, that will increase demand for medicine. This relationship is integral to the program’s supply strategy, because the experienced dispensadora knows best which medicines in what quantities s/he will be able to sell in the upcoming months.
3) Identifying the determinants of demand
- A community’s demand for medicine depends upon a confluence of factors. Seasonal illnesses, which vary by region and by community, determine which medicines will be in demand.
- A productive alliance with the public health center serves as a pipeline to the pharmacy, but their periodic stocks of free medicine also reduces demand. The demand for medicine is very sensitive to the price at the community pharmacy, as well as the comparative prices in the local corner stores and private pharmacies. Identifying the factors that determine demand helps COMIXMUL/FUDEIMFA make smarter purchasing, stocking and pricing decisions.
At the end of the day, the purpose of building out a sustainable business model is to ensure that more families in rural areas can access the medications they need at affordable prices. After all, good health is the foundation upon which better lives are built. Meet some of the dispensadoras I visited here.
11 hours in Yopal, Colombia with GP partner Amanecer
by Mark Coffey, chief investment and operating officer, Global Partnerships
My plane leaves Bogota, Colombia for Yopal at 6:09 am on a chilly and damp morning. I am disappointed to learn that I am seated in the last row in a window seat. However, I soon learn that I am fortunate to be in that seat.
Sitting next to me is a young project engineer from Bogota named Adriana. She travels to Yopal once a week to consult and monitor projects in this oil-rich region for her employer, Houston-based Environmental Resources Management. I tell her that I’m going to attend a 20th anniversary celebration hosted by one of Global Partnerships’ longtime partners, Fundacion Amanecer, a microfinance and training institution founded by a group of local companies. Adriana is interested in collaboration opportunities between ERM and Amanecer, and we spend the next hour talking.
The plane ride passes by quickly as we chat. Suddenly I look out the window and realize that the emerald-colored eastern mountain range of Cordillera Oriental has been replaced by vast stretches of open plains. When we deplane, the air feels completely different from that of Bogota: it is warm and humid.
I call Cesar Ivan Veloso, the general manager of Amanecer. He advises me to grab a cab, and says all cab drivers know where Amanecer is located, which I later find to be true. Since I arrived in Colombia late the previous night and don’t have pesos, Adriana gives me 5,000 pesos (less than $3) for a cab ride, and I promise to pay her back on my return, since we have learned that we are on the same flight going back to Bogota.
The cab driver drops me off in front of a beautiful brick building near the center of Yopal. I see signs everywhere for Amanecer and its 20th anniversary. In the lobby, already buzzing with people, I am greeted by Cesar Ivan and Claudia Jimenez, the director of finance and administration. I spend the next couple of hours meeting with Amanecer’s staff, supporters and board members.
Reflecting on two organizations' 20-year anniversary
Shortly after the celebration begins and Cesar has given a welcome speech, the master of ceremonies announces that I will be the first guest speaker. Since I didn’t receive an agenda, I was surprised to be the first speaker, especially since there are many dignitaries on the stand, including the Colombian Minister of Energy, the governor of the state of Casanare, and the mayor of Yopal.
I talk about the coincidence of Amanecer and Global Partnerships being established in 1994, both with similar goals of providing people with few resources with opportunity through training and access to finance. And while both organizations grow and prosper over time, the strength of the institution is not the true measuring stick of success. Rather, the progress and what we are celebrating is the hundreds of thousands of families who are now more informed and empowered to make their lives better. I see lots of heads nodding in the standing-room only crowd.
After me, there are a few more speeches, including one from an Amanecer client and communal bank leader. She is about 50 years old and a true Colombian cowgirl, dressed in a Stetson hat, long-sleeved jean shirt, jeans and boots. She is the star of the show, speaking in her Orionquian accent, telling jokes, and detailing how Amanecer has helped her with her cattle business and helped her rural community, far outside of Yopal. She says that she and those in her municipality are just humble campesinos (farmers), but she is proud of what they have accomplished.
Working shoulder-to-shoulder with Amanecer
After the event, I meet with Rosaura, Amanecer’s social manager. We walk through both their microfinance and social programs. I learn how they are integrated mainly through the 160 comunal banks. I also learn how the Action Board Committee in each vereda (small villages within each municipality) decides to create a communal bank, elects the officers, receives training from Amanecer, and then makes its own credit decisions. The theory is that the vereda officers are the ones who know the people applying for credit the best. Rosaura is also very interested in meeting with my airplane friend Adriana to see if they can collaborate.
As we get into the second hour of our meeting, we focus more on impact measurement. Amanecer has developed its own rating system for each communal bank, and an experienced manager named Alirio joins us to explain the rating system. Since Amanecer has historically focused mostly on financial performance, we discuss how more social impact measurement could be done. We all agree that focusing on three or four measures would be best, and that they should then track those measures over time.
Further, we talk about not measuring the unique things about each vereda, an almost impossible task, but rather tracking aggregate data on programs that apply to all of the communal banks, such as the holistic education they are currently providing on values and ethics, preventing violence against women, and alcohol abuse. The conversation becomes quite animated as we jointly realize that complexity is their worst enemy. We talk about the planning process for next year and the need to focus on what they can and should track.
A common bond
I end my day with Cesar Ivan and Claudia. They say that they feel differently about Global Partnerships than other financiers; they say that we are more interested in the programmatic aspects and impact of what they do, and that they feel a common bond with us. We wrap up with lots of hugs and Cesar thanks me for the alignment between our two organizations.
After checking in at the little airport, I bump into Adriana, provide her Rosaura’s card, Amanecer’s annual report, and her 5000 pesos, and we chat until our flight boards. I feel grateful for all the people I have met during my “once horas en Yopal”.