Articles

“Customers want ownership and successful strategies will require that as an outcome” – Marianne Walpert, CEO Simusolar

Simusolar serves rural Tanzanians with productive tools and equipment financing payable in installments via mobile money.  Equipment includes both power generation and its applications: irrigation, small business, home lighting, and more.  Co-Founder and CEO Marianne Walpert has over 10 years experience serving off-grid Tanzanians and the team has over 70 years combined experience in solar.   With early support from the DOEN Foundation and Unreasonable Institute, Simusolar is an early growth stage innovator with a mission to improve Sub-Saharan Africans rural livelihoods.

Questions

 

SC News: What is your experience: which product, beyond lighting, customers request the most? And which other appliances for Solar-Home-Systems you think should be provided in future?

Simusolar: Our focus on productive assets has uncovered a number of high-demand solutions.  Farmers, the largest segment of our rural customers, are clamoring for solar water pumps sized for their plot size, usually less than an acre under cultivation.  Along Lake Victoria, we’ve seen high demand for our fishing lights.  The theme is revenue generation, a top priority for most.  Of equal interest, our customers don’t differentiate between residential consumption and income generation. Systems that can serve multiple needs across segments is generally preferred to single-use applications.

SC News: What would you recommend young entrepreneurs in Asia/Africa in the off-grid solar sector when they start to work: what is the most important skill or talent they need?

Simusolar: Know your customer.  Start with market demand.  Always.  New technology is great and can open up new markets, but it should never lead development.

SC News: When companies grow, the need for good and reliable staff is big. How do you find your staff?

Simusolar: Many of our team has worked together for the past 10 years, initially through a non-profit I founded in 2007, TanzSolar.  As a result of our tenure and work in the community, we have been able to source talent through networks and referrals, the best route.  As we’ve grown, we’ve engaged in countrywide searches on our own and also worked with talent firms like Duma Works.  We have had good experience with Duma and the savings in time has been well worth the investment. One piece of counsel: triple check references and current employers of any potential hires; we’ve been burned by simply contacting the provided references.

SC News: The market in developing countries is often influenced by local corruption, insecure governmental policies, bureaucratic hurdles for customs clearance. Which obstacle is/was for your business the most challenging one – and why?

Simusolar: Our greatest challenge has involved importation, working through customs in an environment where tax code interpretations are changing and customs officials may either take widely divergent views or simply stop the entire process for fear of being penalized for making an incorrect assessment.  We’ve lost months of sales due to these delays.  We are working with a larger, established clearing agent in the hopes they can better shepherd our imports.

SC News: Right now we see a huge focus on pay-as-you-go sale in the off-grid sector. How do you see the further development of this type of business?

SimusolarFinancing off-grid clients is challenging as few have land title or collateral.  The PAYG sector has reduced this risk by remotely controlling the equipment, the effective collateral for the purchase loans.  Flexibility is important to customers whose incomes and expenses are volatile; balancing that flexibility with structure to ensure payments are ultimately made is a competency PAYG firms develop.  The actual terms of the equipment service, be they lease-to-own, purchase agreements, or other legal arrangements, will be largely driven by the local policy and tax context.  We do see customers wanting ownership and believe most successful strategies will require that as an outcome.  Pure rental models don’t generally offer that end, and they run the risk of poor equipment treatment: as the saying goes, no one has ever washed a rental car.

SC News: The off-grid sector worldwide is depending on soft loans and donations. Do you think this soft money is helpful to build the industry?

SimusolarIt’s all about the way in which subsidization is provided.  Many industries in both developed and developing contexts have forms of subsidization: from tax breaks to outright subsidies.  These tools, when appropriately used, can compensate for poor infrastructure and can encourage development of a sector and the ecosystem surrounding it.  Some design principles that offset the risks of picking winners or encouraging unsustainable models: criteria and eligibility should be transparent; support should be time-bound; and engagement of non-subsidized players should identify the obstacles and path to market-based financing.  At this point in time, we feel that subsidization is warranted.  However, the industry would do well to develop the metrics and targets for a healthy financing ecosystem, a point at which subsidies could scale back to zero.

***

Facts and figures

 

Name of the company: Simusolar
Founded: 2014
Headquarters based in: Mwanza, Tanzania
Business activity: Productive Equipment Financing & Distribution
Countries/regions of activity: Tanzania
Number of staff worldwide: 31
Webpage: www.simusolar.com
Email contact: mkuntz@simusolar.com
Any other interesting Fact/Figures?
Simusolar is the market leader in solar fishing lights, serving Lake Victoria at present.  The lights replace kerosene lanterns with a clean solution, easier to operate and lower cost than kerosene. Simusolar finances these packages with paybacks in under a year.  Fishers see three-fold increases in their net income, thanks to the savings afforded from the lights.

***

Source:

Email
LinkedIn
WhatsApp
Twitter
Facebook
XING
Print

Comments: