Serving more than 5,000 customers and operating from 37 sales points in five regions of Ethiopia including Somali, Amhara, Gambella, Oromia and Southern Nations, Nationalities and People’s Region (SNNPR) and with a plan to expand in two more regions, Hello solar, a solar energy solutions distributor in Ethiopia operating on a Pay-as-you-go model using HelloCash mobile money service provider as the payment solution, has shared the learning experience in its March 2020 report.

Key report highlights,

• Although the global sales of solar lighting products, on a PayGo model, reached 1 million units, accounting for 24% of solar lighting products sales worldwide in 2019, the Ethiopian market was characterized by a few factors that have limited the success of such a model thus far,
• In addition to the very low level of rural mobile penetration rate (35% while African average is 73%) (2017), all mobile money wallets must be linked to an account with a traditional financial institution which brings in systems integration issues and a heavier load of operations as more parties and platforms needed to be integrated together in Ethiopian market, (eepBp noted that the regulation is under reform)
• The conservative regulations around foreign investment and lack of foreign currency for imports made Ethiopia a complex business environment

In the report, they have laid out how Hello Solar navigated the Market (ForEx Risks, Regulatory Environment, Customs and market delays), Enterprise (Funding gaps, IT systems, distribution channels, after sales) and Product and customer (Customer outreach, Customer default risks, Reaching last-mile customers, Product/market fit and Partnerships) Learnings in a way that shades light how other players approach the market.

The business model of a PayGo company stemming from a Mobile Money provider has proven successful in the past, in other countries. However, key considerations need to be kept in mind to navigate the Ethiopian context. HS has been able to successfully leverage BTS HelloCash in order to install well-aligned back-end systems, leverage relationships, establish preferential legal structures and quickly gain traction in the market, the report Concludes.

It is in the interest of eepBp to promote such practical cases to the larger audience and we do think  that the report provides an invaluable insight on the Ethiopian off grid energy market. We encourage you to read the full report to have the full picture.   

Source: Shell Foundation        You may access the Report dierectly

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