Introducing GSM-Enabled PAYGO Solar in CambodiaDr. Benoit Lacroix

09/06/2016

The Cambodian Context

Only 34% of households have grid

connection

Most households use car batteries to power appliances

Who Is Kamworks?

• A social business established in 2006

• That designs and assembles solar products locally

• With a strong innovation mindset

Kamworks’ Main Products

MoonLight Solar Lanterns

(12,000 units sold)

Solar Home Systems

(12,500 units sold)

Large Solar Systems

Kamworks PAYGO Solar Systems

1. Experiment new business models— Rental and credit sales, with internal financing— Collect payments using mobile money

2. Develop a pay-as-you-go solar home system— Integrated in existing products— Enforce repayments and remote monitoring

3. Objectives— Initial target: 300 GSM-enabled SHS in customer hands— 505 units installed in November 2015

Commercial Offers

Option 1: Rental

• Perpetuity rental• Low cost

• $20 per month for a 100W SHS

Option 2: Lease-to-own

• 2 years loan• $35 per month for a 100W

SHS

GSM-Enabled SHS

• Available sizes— 100W, 60W and 40W

• Retrofitted existing SHS with GSM connection— Control the product, for better payment compliance— Monitor the product, for better and more cost effective service

The customer pays with his/her mobile using Wing.

How Does It Work?

Kamworks manages payments using its cloud-based billing and management system.

Kamworks remotely monitors the solar systems and switch them using GSM technology.

Lesson #1Try, Trust, Buy• Customers want to own

— Big investment— Require building trust

• Option: switch from rent to rent-to-own— 65% of customers initially

rented— Within 1 year, 45% had

transitioned to rent-to-own

• Rental used as a low-risk, low-commitment way to test SHS

Lesson #2Customers Like Mobile Money• Standard use of mobile

money: send money to relatives

• Switching to bill pay was low pain— Required some training of the

shops— Very good collaboration with

WING

• 95% of customers prefer using mobile money than using battery charging services

Lesson #3Financing Through Crowdfunding

• Partnership with the crowdfunding platform Kiva

• Low-cost funding for the company and the customer

• Phasing of the due diligence of KIVA in stages is very helpful

Lesson #4In Cambodia, the Bigger the Better

• Customers prefer the large systems— 75% chose the SHS100

• Triggers purchase of appliances— 50% of customers— Flat screen TVs and fans

Lesson #5Customers Pay Late• Excellent initial repayment

rates

• Challenge to maintain long term on-time repayments— Easy fall-back to previous

solution — Hard recovery when issue

• Work-in-progress— Dedicated credit department— Much stricter rules — PAR30=0 for all SHS installed

in 2016

• Mobile network operator:— Initially focused on connectivity — After 1 year of collaboration, moved to reduced pricing

and co-branding of the product

• Microfinance institutions— Partnerships with Vision Fund and HKL— On-the-ground knowledge and trust of customers— Challenge to align priorities and incentivize field agents

Lesson #6Partnerships Take Time To Develop

Lesson #7Machine-To-Machine Is Key• M2M monitoring very promising

— Used for remote troubleshooting— Moving to predictive maintenance,

automated troubleshooting and customer analysis

• M2M control challenging— Network coverage issues— Part of the problem on repayments

rate

• Next version— Keep M2M for monitoring— Keypad + activation code for

control

SHS GSM connection status

The Next Steps

• Accelerate SHS sales in Cambodia— Kamworks certified supplier for solar loans financed by

the French Development Agency’s— Next version of the product supported by the

Cleanstart SHIFT Challenge Fund of UNCDF

• Kamworks as a PAYGO solutions provider1. Hardware with remote monitoring and switch off2. Cloud based platform to collect and manage

payments 3. ERP system to manage sales and operations

Thank you!benoit@kamworks.com