More from: United States Agency for International Development

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.”


Renewable Energy Microfinance and Microenterprise Program (REMMP) Benefits 1 Million People with Clean Energy!

We are delighted to announce that as of April 30th 2016, Arc’s USAID-funded Renewable Energy Microfinance and Microenterprise Program (REMMP) has passed the milestone of 200,000 sales of energy products. That equates to over 1 million people benefiting from clean energy in five countries – India, Uganda, Haiti, Kenya and Nepal.

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The 200,000 customers – of which 67% are women – have received access to products such as solar lanterns, solar home systems (SHS) and efficient cookstoves under a range of consumer financing mechanisms which seek to bridge the affordability gap inherent in providing products like these to the poor. REMMP has also addressed distribution challenges posed by the “last mile” through promoting “supplier” financing mechanisms.

These financing mechanisms range from different microfinance loan models built and expanded under REMMP by Arc’s MFI partners, to asset finance offered by energy enterprises, remittances from migrants, and trade finance for agents conducting cash sales. Arc’s goal under REMMP remains to pilot, test, evaluate and scale different financing mechanisms for distributed renewable energy products (such as small-scale solar for off-grid households) and in doing so, pave the way for commercial scaling of this sector by demonstrating the viability of these models.

In order to facilitate sales, REMMP partners have disbursed over US$13 million in loans and over US$29 million in investment has been leveraged under the program. Over 37,000 tonnes CO2e has been displaced by the clean energy products sold and the equivalent of 2.1MW of solar capacity has been installed. A recent annual phone survey reveals 98% product satisfaction among clean energy customers, and 87% likelihood to recommend the product to friends or family.

After spending several years laying the groundwork through capacity building, partner and product evaluation, and all of the other critical steps to building local capacity – mostly from scratch – REMMP is seeing sales accelerating. In fact, the milestone of 100,000 clients reached was just passed in July 2015. REMMP expects even more rapid scaling in the coming months as the affordability gap for clean energy products continues to narrow through the hard work of our partner organizations.


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.


Innovations in Financing Event, NYC 2015

This series of four videos captures a full-day 2015 workshop entitled “Innovations in Financing: The Nexus Between Energy, Distribution And Finance.” Organized by Arc Finance in conjunction with USAID, the day featured stakeholders from across the sector discussing the latest innovations in consumer and institutional finance for providing small-scale clean energy access to the poor.
Watch our video series. ►


Innovations In Scaling Off-Grid Clean Energy Event, Washington, D.C. 2015

This series of seven videos captures a full-day 2015 workshop entitled “Innovations In Scaling Off-Grid Clean Energy: Business Models to Promote Consumer Financing.” Organized by Arc Finance in conjunction with USAID, the day featured stakeholders from across the sector discussing the latest innovations in scaling off-grid clean energy access to the poor. Watch our video series. ►