The Weaker Section Development Society (WSDS) is one of seven microfinance institutions (MFIs) that Arc Finance currently assists under its USAID-funded Renewable Energy Microfinance and Microenterprise Program (REMMP). A small but fast-growing, community-based MFI, WSDS operates in the central and southern districts of India’s northeastern state of Manipur and has recently begun finance and disbursals of solar home system components to underserved communities.

In India, Arc is working with two quite different financing entities that are both helping MFIs scale their energy lending programs. One of them is Milaap, which provides Indian MFIs with debt finance under its crowd-funding umbrella for energy related lending. The other is Friends of Women’s World Banking-India (FWWB-I), an apex funding organization based in Ahmedabad India that provides market-based loans to MFIs including a sub-group that have energy lending portfolios. WSDS has received funding from both FWWB-I (2010) and Milaap (2012). Beginning in 2010, WSDS sought to address its clients’ energy poverty by promoting and financing small portable solar lighting devices manufactured by the Hyderabad-based social enterprise, Thrive Energy. In less than two years, the organization financed or sold for cash over 25,000 units.

Part of WSDS’s success is because it understands the real needs and challenges faced by its clients and the people in Manipur, which contradict official statistics. According to the 2011 India Census, nearly 70% of Manipuri communities are connected to the central power grid. However, this relatively high figure (by Indian standards) belies chronic supply deficits and disruptions that leave most households, businesses and institutions without reliable power for much of the day. Especially hard hit are the less accessible tribal villages and hamlets that are scattered throughout the hilly, rural districts that make up the majority of the state’s total area. Here, the grid – if present, at all – typically provides service for no more than 3 to 4 hours, per day – and not necessarily in the evening, when power is needed most for family time, children’s education and cooking.

What does this translate to in reality? It means that lack of reliable electricity access ensures continued dependence among target communities on that great curse of the energy poor – kerosene – for evening and early morning lighting, and limits WSDS’s clients’ (including their children’s) ability to carry out and sustain productive livelihood and educational activities once the sun goes down. Most of WSDS’s active clients are weavers of ornate, traditional garments, a vocation for which productivity, and therefore earnings, are directly dependent on the availability of powerful, reliable, high quality lighting.

Identifying client demand and the resulting opportunities for large-scale impact, is core to Arc’s work with partner organizations under REMMP. In the early months of 2013, WSDS and Arc Finance began to explore expanding solutions based on the program’s success and feedback from customers, who were now inquiring in growing numbers about the availability of larger (and higher quality) products capable of better meeting their small-scale energy needs. Following initial market research involving several interviews and focus groups with clients in WSDS-served communities during the spring, the team concluded that Solar Home Systems (SHSs)  capable of powering multiple LED lights and charging mobile phones best matched clients’ needs and their capacity and willingness to pay.

To that end, in July and August of this year, WSDS and Arc began a process of identifying a dependable, high quality, local “system integrator” that would be suitable and able to partner with WSDS in the long-term, and most importantly, be able to help expand provision beyond the “low hanging fruit” of Manipur’s main cities and large towns.

Following a review of proposals from four local companies, WSDS selected Imphal-based SS Electronics as its exclusive SHS product partner. Founded in 1992 by electrical engineer S. Saratchandra Singh, SS Electronics is a family-owned and operated design and manufacturing company that meets significant local demand for inverters and uninterrupted power supply products in Imphal and surrounding areas. In 2005, the company launched its “SunPride” SHS product line, which today includes DC and AC systems ranging in size from 45Wp to 500Wp. SS Electronics is particularly well-recognized for sourcing and integrating high quality, certified components, including best-in-class Exide tubular lead acid batteries.

Under the new initiative, with high-touch technical assistance from Arc Finance, WSDS offers loan financing for two different SS Electronics SHS lighting products: a 45Wp system that simultaneously powers 4 LED bulbs for up to eight hours per day, and a 75Wp system that can power up to 8 bulbs. Based on the demand assessment, WSDS estimates that nearly 75% of loans will be for the 40Wp systems, which retail for roughly US$200, while the larger US$375 systems will be attractive for a smaller number of larger, more affluent households and businesses.

Partnership is the sine qua non in the small-scale energy finance sector, particularly in targeting hard to reach communities. Mutual benefit and appropriate, shared incentives are key elements for a pilot intervention’s success, so the terms of the partnership must deliver clear value for both WSDS and SS Electronics. WSDS receives, from SS Electronics, high quality, affordable products, factory-to-branch distribution, crucial, ongoing staff training for after-sales service, extended three-year warrantees and fast-response, local technical support. The quid pro quo for SS Electronics is clear too: through its existing rural networks and lending capacity, WSDS opens up new, previously inaccessible markets for SS Electronics beyond the immediate vicinity of Imphal. In order to accommodate timely, additional demand from WSDS clients, the company has invested in a facility expansion and has hired ten additional factory staff. SS Electronics engineers have already trained two WSDS technicians in how to properly install and service the products in the field, with further training to come.

Since launching the new program in September 2013, the results have been nothing short of staggering. WSDS has financed and installed over 600 45Wp and 100 75Wp systems in three different districts of Manipur in only three months – with rapidly growing projections into the next quarter (WSDS estimates that total approved loans will have reached 2,000 by January 1, 2014). During a three-day field visit in November, the Arc team had the opportunity to meet with several WSDS clients who had recently purchased SHSs with WSDS loans, and to tour SS Electronics’ Imphal facilities. During this visit, the team observed an SHS disbursal event at a WSDS branch office in the city of Churachandpur, Lamka District, 75 kilometers south of Imphal. It was a boisterous, memorable scene, with clients’ enthusiasm and excitement surprisingly heart-warming; it is, after all, hard for people who are accustomed to cheap, reliable energy to appreciate the watershed experience of getting it for the very first time. Beginning just after 10 am in the morning, small groups of WSDS borrowers – all women – began to trickle into the Churachandpur branch office. They had come – several hours early, in most cases – to collect the components for their systems, which would then be installed over the next two days in all of their homes by WSDS technicians.

It’s difficult to convey in words a joyous scene like this one. Many women arrived with dozing toddlers slung over their backs. Some came with husbands and teenaged sons to help with the heavy lifting. As each hour passed, their numbers grew. By 3 pm, when the SS Electronics truck finally arrived from Imphal, the crowd had swelled to over a hundred, filling the branch’s main room to capacity before finally overflowing out into the front yard and driveway. A palpable feeling of anticipation hung in the air; these people had seen home systems before, and knew the ways their lives were about to change for the better.

Once all the hundreds of system components were neatly organized within the branch, WSDS officers convened the crowd for a twenty-minute tutorial on system use and maintenance, conducted by two members of SS Electronics staff. Then disbursals began, and, one-by-one, members lined-up to sign for and receive their component bundles. By sundown, only a handful remained, most having left with their new systems by taxi, rickshaw and even on foot.

Lamkhomang Kipgen, WSDS Founder and CEO, was present to oversee the event and to congratulate clients on their new acquisitions. As the last member was departing from the branch, Mr. Kigpen smiled, sighed with satisfaction and said, “This week, 500 more people will have light.” It is a remarkable achievement in a very short period of time, indeed.

There is sometimes an over-reliance on anecdote and “happy stories” in the microfinance sector, but there are times when only a story can convey what the provision of affordable, reliable, clean energy to people in energy poverty truly means. A disbursal event like this – one of dozens taking place around Manipur thanks to WSDS, Milaap, FWWB-I and Arc Finance – illustrates, better than any impact measurement study can, the transformative effect that Arc’s initiatives under the USAID-funded REMMP program are having on the lives of end users. If all goes according to plan, many thousands more people will benefit from clean energy by the New Year as a result of WSDS’s home system program, and the technical assistance that Arc Finance is providing.