Publication - Working Paper
587 million people, roughly 69.5% of the population, lack access to electricity in Sub-Saharan Africa. Retailers with poor access to electricity have limited means to keep their shops open at night. This limits their ability to operate during evening hours and reach customers who might be at work during the day. Solutions like kerosene do a poor job of lighting the room and have negative health effects. Indeed, the World Health Organization estimates that the use of solid fuels contributes to 551,000 premature deaths in Sub-Saharan Africa every year. Besides, traditional off-grid solutions require significant one time investments, making them unrealistic for poorer consumers.
This project studies the pricing schemes for a new solar technology that combines solar power, mobile repayment, and mobile enforcement. We are partnering with Angaza Design who will roll out 1000 units of their Solite-3: a solar-powered device that provides light and charges phones. The devices allow payment via mobile money and monitoring of payments with enforcement upon non-payment. This enables Angaza to ask retailers for a very low and affordable down payment and allows them to gradually pay back the full amount of the device over time, based on use and at no transaction cost (PAYG using M-PESA, the current mobile money system in Kenya).
The project aims to study three broad sets of research questions.