OFID teamed up with the Shell Foundation to support the rollout of the social enterprise d.light in Kenya and Tanzania, two of the most severely energy-poor countries in sub-Saharan Africa. In both countries, kerosene is the most widely used source of lighting, costing up to US$7.50 per month and placing considerable strain on households with a typical per capita income of just US$2 per day. The aim of the twelve-month project was ‘to empower formerly energy-poor consumers to live a life of new freedoms and opportunity’. This involved setting up a revolving capital pool that made low-interest loans available to rural distributors of solar-powered lanterns. The loans boosted working capital and enabled rural distributors to buy and stock large supplies of the lanterns. By the end of the period, almost 85,000 units had been sold, empowering some 424,000 people; more than triple the original target.
As all loan repayments, including interest, are re-injected back into the revolving fund, the scheme is not only self-sustaining but growing year-on-year. Another crucial element of the project was the training programs that were organized for distributors and brand activators to help them develop more professional business skills and become more effective sales agents.
Duncan, a young family man in Kisumu, Kenya, is making the most of this opportunity. As well as selling d.light products, he works in a local bar which rents out lanterns for a small nightly sum to people who want to continue running their kiosks after sunset. In this way, Duncan creates demand and consistently sells about four units a week. The marketing chain is supported by brand building and consumer awareness activities that educate potential customers about the benefits of d.light lanterns and create free home trial opportunities. This too, has been a major factor in the success of the project.
Since launching its innovative range of solar lanterns in 2007, social enterprise d.light has transformed the lives of more than 25 million people who have sporadic or no access to electricity. Its goal? To boost this number to 100 million by 2020.
The grant from OFID and the Shell Foundation enabled d.light to test the ability of distributors to keep the product in stock when they had the necessary financial support. “it was found that the products were in stock all the time, sales were twice what was expected, and d.light were able to sustain much wider and more continuous distribution than would have been the case otherwise.”