More from: Sogexpress

Sogexpress’ Consignment Model Innovates in Inventory Supplier Financing for Solar Street Agents in Haiti

Haiti is the poorest country in the Western hemisphere and has some of the lowest levels of electrification in the world. To address this massive shortfall in access to quality and reliable energy, Haitian Money Transfer company Sogexpress, has made a commitment to radically increase access to clean energy products.

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The vehicle Sogexpress has chosen to achieve this goal is through its agent network, especially its street agents. To test the initial viability of this approach Sogexpress introduced a pilot to encourage 340 of its 1,000 street agents to sell solar lanterns. Sales were strong, but the test demonstrated a need for a source of supplier credit to finance the inventory the agents planned to sell.

Market research conducted by Arc Finance in 2014 indicated that the consignment model was the best financial mechanism for this pilot: as it lowers risk for the agents and Sogexpress as compared to a more formal loan product. Sogexpress was not prepared to bear the risk of handing over large amounts of inventory without some sort of guarantee, and the agents were uncomfortable borrowing money to purchase inventory for new, unfamiliar products and carry the risk until those products were sold.

So Sogexpress, with the assistance of Arc Finance, the IDB’s Multilateral Investment Fund and United States Agency for International Development (USAID), spent several months developing the consignment mechanisms, structure and policies. It also upgraded and adapted the Sogexpress IT and Management Information Systems to ensure they were fit for the purpose of tracking the credit and status of agents.

Towards the end of 2015, Sogexpress started implementation of its retail consignment program. The agents or shop retailers don’t have to purchase the products they sell. Instead, the company lends them its products on “consignment”, which allows Sogexpress to increase the working capital of its street retailers, diversify its portfolio, and expand its business and increase revenues.

A background check and selection process involving several steps mitigates the risk of lending. Firstly, Sogexpress’ démarcheurs (trusted senior agents) identify prospective street agents and recruit them. Next, store managers create and evaluate files on each potential agent. The store manager interviews selected candidates. The store manager registers the approved agents, and sends their files to the selection Committee. Once the Committee approves an agent’s application, the street agent signs a consent form. This form describes the agent’s commitment, duties and responsibilities in detail.

The new agent pays a 300 HTG (approximately US$5) deposit to a Sogexpress store manager to be enrolled in the consignment “Loyalty Program” and receives a special “loyalty card” as identification of membership. This program has various objectives, including: to track sales data and agents’ performance; to allow agents to accumulate loyalty points; and to track consignment portfolio quality, with an alert system in place to flag delinquencies or other problems.

After agents are registered, they are given a credit limit of 3,000 HTG (US$50), with which they can borrow energy products from the company (the value of approximately three solar products). Later, once the agent has demonstrated creditworthiness, he or she may receive a limit of up to 50,000 HTG (about US$900). Each new agent is given a kit that includes different models of solar lamps with a maximum value of 3,000 HTG (US$50), a branded backpack in which to carry the lamps, and flyers with descriptions of the products.

In order to support its new agents, Sogexpress provides marketing support through sound trucks and advertising. Training sessions based around product details and selling tactics further bolster the agents’ capacity to effectively engage with prospective customers.

As of August 31st 2016, Sogexpress has enrolled 561 agents in this program. In the summer of 2016, Sogexpress and Arc Finance conducted a first review of the pilot, collecting feedback and data to make the consignment process faster and easier. As the company moves forward, it is aiming to increase its efforts to retain active agents. Arc is helping Sogexpress to grow this program, and to reach its target of enrolling 1,000 agents by the end of the year – especially outside Port-au-Prince where the competition among energy companies is less intense. It is also in these rural areas where people are in the most need of reliable and safe lighting solutions, such as the solar lights for which this model is so well suited.

Dominique Policard, Executive Commercial Director at Sogexpress, foresees that:“This program has not only the advantage of facilitating access to clean energy but also of helping the street agents access financial services. Sogexpress is very proud of this new program and hopes to scale it in the future.”


Soge-EASY! Launch of Branchless Banking Product from Arc Partner Sogebank Can Help Bank Solar Energy Agents

For thirty years, the Sogebank Group, the parent company of Arc partner Sogexpress the leading money transfer and payment services company in Haiti, has been innovating in the banking market. From being an early mover with ATMs in the 1980s, to mobile banking this decade, the company has led the Haitian banking sector in improving the customer experience.

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Yet, Haiti remains one of the most financially excluded markets in the hemisphere, with only 20 percent of Haitians having a bank account. To help address this, Sogebank has developed a new product called SogeIzi (pronounced Soge-EASY). SogeIzi is a savings model targeted at poor and rural Haitians. The target market includes street agents that sell solar lighting products on consignment with support made possible by technical assistance funded by the Multilateral Investment Fund (MIF), a member of the IDB Group, and USAID, and provided by Arc Finance.

Recognizing that like many other Haitians, many of these agents are financially excluded, Sogebank is offering them the possibility to save their income as well as make payments using a debit card (Izicash card). They will be able to use a range of locations within the broad Sogebank Group network (not just the brick-and-mortar Sogebank branches), including Sogexpress stores and ATMs. The clients benefitting from this program, including potentially many of Sogexpress’ solar agents, will be able to access a basic bank account, enabling them to save, earn interest and conduct transactions all over the country, in rural or urban areas, irrespective of whether there is a Sogebank branch nearby.

Simplicity is a hallmark of the program. Sogexpress believes it is important to make it as easy as possible for financially excluded customers to make financial transactions while keeping operating costs low. Accounts can be opened in 10 minutes, using a single identification document and a low initial deposit (HTG 300, or US$5). Customers are provided with a starter kit of an Izicash debit card, explanatory documentation, a PIN, transaction registration, and free enrolment in the Sogemobile (mobile bank account access) and other Sogebanking programs.

SogeIzi is particularly valuable for the agents selling solar lighting products under the program Arc has implemented with Sogexpress. The initiative helps to bring them into the formal financial sector with the associated advantages. It works in tandem with the consignment finance model, which provides solar products on credit to the agent. The extended opening hours of Sogexpress stores (including Saturdays, Sundays and holidays) compared to Sogebank branches is designed to accommodate the needs of clients such as agent entrepreneurs, as is the 24/7 access to their account and execution of transactions through ATMs, Sogebanking and Sogemobile.

As Dominique Policard, Executive Commercial Director at Sogexpress, describes it, this new product is timely, “enabling Sogexpress to take another step in supporting the network of sales agents to increase their livelihoods through financial access and by facilitating savings”. Policard says that the Sogebank Group wants to bring the financially excluded in Haiti into the financial sector, ensuring that even the very poor have access to basic and affordable financial services. This effort is particularly significant in Haiti, which is the poorest country in the hemisphere, with very low levels of financial access and literacy.

The agent consignment model launched by Sogexpress with the support of USAID, MIF/IDB and Arc Finance will benefit over 1,000 agents by the end of 2016. Hopefully many of these people will be able to benefit from the financial access and flexibility of this innovative new program. SogeIzi will be an important way to bring these entrepreneurs into the formal financial sector; enabling them to save, pay and transfer money safely, quickly and affordably as they build their businesses and bring quality clean energy to their customers.


Sogexpress’ Dominique Policard Appears on TV in the U.S. to Promote the Klere Ayiti Solar Remittance Program

Dominique Policard, Executive Commercial Director at Arc’s partner Societe Generale Haitienne de Transferts S.A (or ‘Sogexpress’), appeared Tuesday April 14th in a Miami television interview. The program, Teleskopi, was hosted by Gepsie Metellus, and was broadcast on Island TV, a channel targeted at the Haitian diaspora community in the U.S. Dominique talked about the Klere Ayiti initiative (Haitian Creole for “Light up Haiti”) which is an online platform that allows diaspora members to remit solar products back to families in Haiti, using the existing remittance network and architecture of Sogexpress in Haiti, and the Quick PaySM payment service of Western Union.

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Dominique demonstrated four solar products on the remittance platform ranging in price from $55 to $180, described the options, price configurations and benefits of each, and explained the payment process. She described how a customer in the diaspora can place an order on www.klereayiti.com and then pay for the product at any participating Western Union using Quick PaySM services.

The focus of the interview was on the extensive benefits to customers in terms of education, health, security and livelihoods that have been tested and demonstrated over the course of Arc’s engagement with Sogexpress. The Klere Ayiti platform enables the Haitian diaspora to use remittances to finance renewable energy products for families and friends in Haiti, where a large majority of the population does not have access to electricity.

The platform features a dedicated website that allows diaspora-based customers to pre-order the solar light kit of their choice at www.klereayiti.com. They select the product and then use their order number to complete payment at participating Western Union Agent locations via the Western Union® Quick PaySM platform (present in over 174 countries around the world). Orders are fulfilled by Sogexpress in 3 to 5 working days.

All the products for sale have the capacity to recharge mobile phones, a highly desirable feature in Haiti, and were carefully selected by the Sogexpress team with the help of Arc Finance. All products come with a warranty by local distributors in Haiti.

The Klere Ayiti platform was launched in late July 2015 in Port-au-Prince and Miami. It was the culmination of many months of preparation and hard work by the Sogexpress and Western Union teams, and was made possible with support from the USAID-funded Renewable Energy Microfinance and Microenterprise Program (REMMP) and the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB).

Here at Arc, we’re delighted to see this program reaching the Haitian community in the U.S., and look forward to working with all the partners to increase clean lighting access in Haiti.


Films on Utkarsh and Sogexpress Selected as Finalists at the Off-Grid Experts Awards 2015

We are excited to announce that two videos featuring Arc Finance partners have been selected as among the top four finalists for the Off-Grid Experts Awards 2015 – organized by Phaesun and taking place in Memmingen, Germany September 25 to 26. Over the course of the Off-Grid Experts Workshop 2015, all top four films will be shown to workshop visitors, who will vote on the winner at the event. Both videos are finalists in the “Filmlet-Energy Independence” category.

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Arc Finance’s profile of microfinance institution Utkarsh’s solar lending program, “Utkarsh Brings Light to Uttar Pradesh, India,” was shot by our photographer and videographer Souradeep Ghosh, and was produced as part of our Renewable Energy Microfinance and Microenterprise Program (REMMP), which is funded by USAID. “Remittances and Solar Energy,” our profile of Haitian money transfer org Sogexpress’ remittance and energy program, is a result of a public-private partnership between Arc Finance, Sogexpress and the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB), and the filmlet was funded by the MIF/IDB. The video highlights the key innovation of using remittance corridors to finance clean energy products.

We are delighted for Utkarsh, Sogexpress and all the other entities involved in the production of these two informative, elegant and warm films, which show the impact that small-scale clean energy can have on people’s lives.

We congratulate all finalists in all categories, and send our thanks to our digital media team, our partners, and the talented Souradeep Ghosh for all their work in getting us this far!








Western Union and Sogexpress Innovate: Remittances to Fund Renewable Energy in Haiti

The Western Union Company (NYSE: WU), a leader in global payment services, and Western Union Agent Sogexpress, a leading Haitian money transfer and payment services company and subsidiary of Sogebank, today launched a new platform that enables the Haitian diaspora to use remittances to finance renewable energy products for families and friends in Haiti, where only 28 percent of the population has access to electricity. Read press release.




Arc Finance and Sogexpress Launch KlereAyiti.com

Arc Finance and Sogexpress launch KlereAyiti.com, a new platform for financing clean energy in Haiti through remittances.

Arc’s partner the Societe Generale Haitienne de Transferts S.A (Sogexpress), a leading money transfer and payment service company in Haiti, and the Western Union Company, a leader in global payment services, have launched a new platform called Klere Ayiti, Haitian Creole for “Light up Haiti.” This platform enables the Haitian diaspora to use remittances to finance renewable energy products for families and friends in Haiti, where a large majority of the population does not have access to electricity. This collaboration expands on a pilot implemented from 2012 to 2013 by Arc Finance with support from the Multilateral Investment Fund, a part of the Inter-American Development Bank Group (MIF/IDB).

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The platform features a dedicated website that allows local customers and senders living abroad to pre-order the solar light kit of their choice at www.KlereAyiti.com. They then use their order number to complete payment at participating Western Union Agent locations around the world via the Western Union® Quick PaySM platform (present in over 174 countries around the world). Orders will be fulfilled by Sogexpress in 3-5 working days.

This platform was launched in late July 2015 in Port au Prince and Miami, the culmination of many months of preparation and hard work by the Sogexpress and Western Union. The process involved market research, product selection, website construction, adaptation and development of IT and web platforms, marketing and promotion. The platform will provide an enormous opportunity for innovation in using an established remittance corridor to finance renewable energy in the poorest country in the Western hemisphere.

Only 28% of the Haitian population has access to grid electricity , and the 2010 earthquake was devastating in both human and economic capital. The country receives a considerable percentage of its GDP in remittances (over 20 percent of GDP ), with a huge diaspora population living in the US – about 420,000 Haitians live in the New York area alone. Thus, Haiti was an idea choice to test remittances as an end-user financing and distribution mechanism in the 2012-13 pilot phase, and the success of that program has led to its current expansion stage.

The results of the pilot phase were encouraging, and led to a joint venture between USAID and the IDB’s Multilateral Investment Fund to fund Phase III, which will, after months of careful review, provide the Sundaya T-Lite for purchase exclusively at Sogexpress e-commerce site at KlereAyiti.com. The T-Lite is a modular solar light kits, available as a kit with two or three lights, will be sold for US$140 and $180.

Both systems have the capacity to recharge mobile phones, a highly desirable feature in Haiti. Awango by Total, an initiative of the company Total to market affordable solar lamps in developing countries, is committed to bringing only the highest quality products to Sogexpress customers and backs this assurance with a two-year warranty. The selected systems have been sold in more than 16 countries, with total sales exceeding 600,000 units.

Already, training delivered by Sogexpress, Awango by Total, and Arc Finance in February 2015 has increased the capacity of Sogexpress sales staff to effectively market, sell, and service the Sundaya T-Lite products that will be sold through the remittance platform.

Staff from all 57 Sogexpress stores were trained on the Sundaya products to ensure the staff had optimum knowledge of the lamps’ features, use, and after-sales service, through ongoing training throughout the course of the program, recognizing the importance of client satisfaction in the success of this initiative.

This exciting new program will target 5,000 sales across the remittance platform, with marketing reaching 300,000 existing remittance senders in the Diaspora and 500,000 recipients in Haiti through an awareness-building campaign, which will use energy literacy and promotional programs to educate Haitians both at home and in the diaspora on the economic and social benefits of switching to clean energy products.


Arc Finance Partners Milaap.org and DCBS profiled at Paris Crowdfunding Event

Yara Akkari of Arc Finance tells an expert audience how Indian crowdfunder and Arc partner Milaap.org is bringing new financial channels to small-scale renewable energy sector

Arc Finance’s Remittance Specialist and East Africa Manager Yara Akkari was in Paris on June 17th to speak on a crowdfunding panel at the CrowdTuesday event – a regular platform that brings together various stakeholders in the crowdfunding industry at the local and regional level. CrowdTuesday is run by the European Crowdfunding Network (ECN), and organized by Alex Raguet, ECN’s French Ambassador.

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Presenting in a panel discussion entitled Crowdfunding as Financing Mechanisms for Clean Energy, Yara demonstrated to her high-level audience how tapping the “crowd” provides much-needed capital opportunities for MFIs that aim for social benefits – namely, clean water, clean energy, education and sanitation.

“Crowdfunding enables MFIs to tap into new sources of funding: it fills the gap for essential-service lending by using financial resources sourced from large numbers of lenders – a form of ‘unconventional lending,’” she said, and then put its role in the context of financial services to the poor as they stand. Microfinance Institutions (MFIs) – several of which Arc partners with – “can play an important role in the removing the barriers to affordability in adopting new sustainable energy products.”

However, she argued, “The Indian microfinance sector has been slow to embrace energy lending as a mainstream practice. While a number of factors contribute to this situation, lack of access to affordable capital from conventional sources of debt and investment is a significant one. Milaap’s crowdfunding platform was developed to close this gap.”

Milaap.org is one of Arc’s partners under the USAID-supported Renewable Energy Microfinance and Microenterprise Program (REMMP), the goal of which is to “increase access of underserved populations to clean energy products in order to improve livelihoods and quality of life among these target recipients while minimizing climate-damaging emissions.”

With the support of USAID, Arc Finance launched REMMP in 2012 to test a range of business models that are designed to increase financial access to clean energy for poor people around the world. REMMP partner organizations include FWWB-I (an “apex” microfinance organization); Bandhan (by some measures the world’s largest MFI); Basix-IGS (within which Arc is “greenfielding” an energy-lending enterprise); Simpa Networks, which is pioneering metering technology for solar home systems; SolarNow, which provides an innovative in-house credit facility for solar systems to rural farmers in Uganda; Sogexpress, a money transfer organization in Haiti that, with Arc’s support, is using remittance channels to enable the diaspora to remit clean energy technology; and Milaap – a crowdfunding platform with a focus on using MFIs as a means to help people get clean energy products for their homes and businesses.

Crowdfunders that partner with MFIs to lend to microentrepreneurs are not new. Kiva.org was the first to reach scale doing this, and has lent over US$500 million dollars since 2005. Milaap is newer and much smaller, but is differentiated in its specific focus on water, energy, and education. Put another way, and as Milaap’s founders have put it at various Arc Finance events, microfinance is “a means to an end, not an end in itself.” Lenders coming to the platform are not lending to small businesses; they’re lending to help people access clean water, energy or education, and the livelihood and income development that comes with each.

Milaap (“connecting people” in Hindi and Urdu) was initiated in June 2010 by three young MBA graduate entrepreneurs who wanted to change people’s concept of giving by making it a personal, transparent and sustainable process. The end-borrowers on this platform are the deserving, working poor of India – students, small businesses, families – for whom a small amount of capital will significantly change their lives for the better.

One hundred percent of a lender’s funds go to the end-borrower for energy, water, sanitation or education purposes. Milaap charges its field partners a 5 percent fee on the funds raised, which currently covers a fraction of Milaap’s costs while it works towards achieving financial self-sufficiency. The shortfall until it reaches scale and when the fee is enough to break even is covered by investment from individual and institutional investors and donors.

It’s been a rapid learning curve, said Yara. By mid-2014, Milaap has raised and channeled nearly over US$1.5 million into a diverse portfolio of nearly 10,000 loans, impacting the lives of 50,000 people, while maintaining a 100 percent repayment rate from field partners. Funds are raised from an increasingly global crowd of lenders and disbursed to borrowers across ten Indian states through a network of 15 different current field partners. The company’s energy portfolio continues to advance through its active partnerships with three Arc-partnered MFIs based, respectively, in the states of Orissa, West Bengal and Manipur. Due to the comparatively small size of loans for clean energy products such as solar portable lanterns and improved cook stoves, energy represents only ten percent of Milaap’s total portfolio – but is increasing.

After taking the audience through the Milaap.org website, the loan-disbursal and repayment cycle (see figure), selected client profiles, and the filters that lenders can apply to direct their loans to specific regions, sectors or purposes, Yara gave a short profile of DCBS – a small MFI in Eastern India which is a sub-partner of Arc Finance under REMMP, and a beneficiary of Milaap’s crowdfunders.

DCBS is a small, community-based MFI that operates in 200 village communities in West Bengal. It has an active client base of 8,000 women borrowers. In December 2012, DCBS began promoting a new solar lantern loan product to existing clients (through a line of credit provided by Milaap, funded by the crowd), which is now expanding to non-clients.

As of mid-2014, DCBS’ solar lending program has a 100 percent repayment rate, has seen rapid portfolio growth and high penetration in the target communities, a consistent validation of this type of energy-lending as sustainable and commercially attractive, and early but positive social impact results. Other MFIs supported by Milaap and Arc Finance are also providing finance for a range of products, from clean cookstoves to multi-light and multi-appliance solar home systems.

Not everything has worked perfectly, of course. As Yara told the audience, there is always an element of trial and error in piloting new and innovative channels in order to demonstrate the commercial viability of a model for scale. Learning lessons along the way is important, and inevitable. Not all MFI partners have had the same success. Due diligence conducted by the crowdfunding platform to determine the capability (and, crucially, the dedication) of the MFI to introduce energy lending, is paramount. Finding the right field MFI partner is a necessary criterion for success.

What’s more, just providing MFI clients with access to credit for energy products isn’t enough either. Providing marketing support, client education, after-sales service, quality and appropriate products that are demand-driven, efficient “last mile” distribution, and appropriate pricing and financing options are all crucial. It is the role of the crowdfunder to assess – and where appropriate, assist – with these variables for success. It is this type of specialized technical assistance that Arc Finance has been providing to DCBS and other Milaap partners under REMMP.

Finally, Arc’s experience has been that training and awareness-raising are crucial elements which should be included as part of the clean energy program. Whether funding comes from donors, funds or in small increments from a crowdfunding platform like Milaap, and whatever the business and distribution model the MFI uses, a highly-engaged and informed staff, capable of talking to clients about their energy usage, costs and needs, is indispensable.

Yara finished with Q&A from the audience (which was particularly interested in product selection and warrantee challenges in remote communities). Arc looks forward to being invited back to further ECN events as it works with crowdfunding platforms to fill the working capital “gap” in pioneering small-scale, clean-energy finance.