FINCA launched its first program in Africa when it brought Village Banking™ to Uganda in 1992. Today, FINCA Uganda serves nearly 100,000 clients in a country where 67 percent of adults lack a financial institution account.
Given FINCA’s extensive experience in the country, coupled with the fact that (at the time) nearly 90 percent of Ugandans lived without electricity, BrightLife was launched to bring life-enhancing energy products—solar lanterns, solar home systems and improved cookstoves—to help raise standards of living. Late last year, BrightLife achieved the milestone of impacting 100,000 lives in Uganda with clean, reliable and affordable energy.
Even greater impact, however, is made possible by marrying access to energy with access to finance. That’s why BrightLife and FINCA Uganda joined forces to launch a new product, called Prosper.
Announcing Prosper to Bring Energy and Financial Access to Ugandans
A colorful ceremony was held in Masindi on March 7, 2019 to officially launch the Prosperproduct. More than 200 people were in attendance, including BrightLife and FINCA Uganda clients and staff, local community members and representatives from Financial Sector Deepening Uganda (FSDU).
Prosper tackles two issues at once. First, it helps Ugandans access BrightLife’s clean energy products that create healthier and safer homes, increase productivity, reduce household expenses and provide additional income-generating opportunities. Second, and crucially, Prosperwill help transition unbanked and under-banked BrightLife clients to FINCA Uganda where they can access a variety of savings and credit products for more impactful financial inclusion.
Here’s how it works:
- Light-Up: Customers pay for a solar home system from BrightLife using PAYGo over 12 months.
- Prosper: Customers who repay their loans in full and on-time receive a 20 percent rebate and are eligible to become FINCA Uganda clients.
- Grow: The 20 percent rebate is deposited, with the customer’s consent, into a FINCA Uganda savings account. The customer is pre-approved for a loan upwards of UGX 2.5 million ($675) from FINCA Uganda with no collateral beyond the savings deposit required.
Testing Credit and New Gateways for Financial Inclusion
In launching Prosper, BrightLife and FINCA Uganda go a step further than linking energy and financial access. This new approach allows BrightLife to credit test customers that FINCA Uganda otherwise may not reach.
Poor and low-income women often lack savings, land or other physical assets to serve as collateral. Even a Ugandan woman with assets may struggle to qualify for a loan given land titles are usually in a man’s name. By assessing credit worthiness through PAYGo financing, BrightLife can become a customer acquisition channel for a microfinance institution or bank.
Norah Basembera illustrates the potential. This Masindi resident is employed and would like a loan to build a few small rooms for rental income. Because Norah lacks collateral, she has failed to qualify for a traditional loan.
However, she recently purchased a solar home system from BrightLife and is enrolled in Prosper. After repaying her PAYGo energy loan in full and on-time, Norah will be able to deposit her rebate into a FINCA Uganda savings account. Instantly, then, she will be eligible for a loan at a multiple of her deposit amount. It’s just the opportunity Norah needed.
“The good thing with this product is that it is for the poor. I want to extend my appreciation to BrightLife and FINCA Uganda for thinking about the poor.”
Norah illustrates how Prosper can help a woman, who previously could not access banking due to structural impediments, access a loan to build a business by repaying a solar home system. Prosper enables BrightLife to welcome a new solar customer looking to climb the energy ladder while helping FINCA Uganda to serve a new microfinance client who previously struggled to qualify for a loan.
Innovating to Tackle Poverty Alleviation
Initially, Prosper is available to those residing in the Masindi and Mityana districts of Uganda. These pilot areas were selected, in part, because of persistent struggles with electricity access and the presence of a FINCA Uganda branch. Following a six-month pilot, it is hoped to expand this offering across the country. Stefan Grundmann, President & CEO of BrightLife, had this to say:
“BrightLife and FINCA Uganda are excited to launch the Prosperproduct, which we believe marks the first joint customer experience between a PAYGo solar company and a formal financial institution in East Africa. We are confident that Prosper will allow BrightLife clients to climb the energy ladder while unlocking previously unattainable financial products, to help them achieve their long-term financial goals.”
Prosper is the culmination of nearly a year of product design and testing, which has been supported by FIBR, an initiative of BFA and the Mastercard Foundation, and FSDU. Furthermore, the collaboration between BrightLife and FINCA Uganda demonstrates the strengths of continuously innovating to deliver products that truly benefit poor and low-income families.
Thanks to Prosper, a new generation of BrightLife clients will not only climb the energy ladder, but also gain access to responsible financial services that help families build assets, create jobs and raise their standard of living.