Success Story: How FRES Upgraded Their Non-Paygo Systems to Paygo

Overview

Pay-as-you-go (Paygo) allows consumers who are unable to afford an asset or service at once, to pay for it in instalments, flexibly over time, thus not only being able to get access to solar energy solutions, but gaining access to financial services for the first time in their lives. This enables them to build a credit history. Given the flexibility of the model, consumers are also able to climb the energy ladder and access more products that are literally changing their lives. Products, such as cooling devices, mobile phones, clean cooking, water access and even agritech solutions, are providing new financial opportunities for larger communities.

Since 2000, Foundation Rural Energy Services (FRES) has been providing people in rural Africa with affordable solar energy under the energy-as-a-service model, currently helping more than 20,000 customers and 100,00 beneficiaries climb the energy ladder, with more than 17,000 SHS installations completed to date. Starting in 2020, they set off to enable Pay-as-you-go capabilities for all of their distributed SHS across their four countries of operation (Uganda, Mali, Burkina Faso, Guinea Bissau). Prior to Paygo being introduced, payments were collected in cash on a monthly basis. Managing arrears with customers was problematic, with few options in the event of non-payment except to repossess an entire system.

Challenges

	Paygo-enabling the whole fleet of SHS devices distributed by FRES without making major modifications to the hardware in place.
	Achieving acceptable payment rates, an essential aspect for the sustainability of FRES’ operations and security of their investments.
	Avoiding FRES’ field agents (debt collectors) from carrying large amounts of cash in remote areas.
	The growing size and complexity of FRES’ customer databases, the increasing reporting required, along with the upcoming Paygo component of the products, required a robust IT solution tailored to such requirements with broad experience in Paygo product distribution.

Solutions

Taking advantage of the component-based aspect of solar home systems, FRES upgraded their fleet of SHS by retrofitting a state-of-the-art Paygo smart switch designed by Solarworx, the SHS manufacturer. Given the novelty of the solution and the unfamiliarity around it from the customer base, it was necessary to educate and sensitise customers on the Paygo model and with the use of Mobile Money payments. This was achieved by providing technical training to the FRES teams, on a country by country basis beginning in Burkina Faso, in Q2 2020; and Uganda, in Q4 2020. These training sessions followed a ‘training-the-trainer’ approach by initially training the management teams, who would then train the field agents and customers.

The Solarworx Paygo Smart Switch is used in SHS devices that consist of a standard configuration of a charge controller, an external battery and a solar panel. The switch is placed between the charge controller load terminal and the actual load. The device relies on protection features like undervoltage and overcurrent of the charge controller. As long as the timer has not counted to zero the device switches on the load and will cut out once the timer reaches zero. The timer also continues counting even when the SHS has switched off the load.​

FRES’ customers were initially reluctant to adopt the switch, since it represented a new piece of technology they were unfamiliar with. However, given that, as reported by FRES, 9 out of 10 customers own mobile phones, they were able to grasp the use of the equipment quickly, entering codes and parameters within 1 to 2 days and a short demonstration provided by FRES’ field agents.

​The switches have really helped me to manage and reduce the debt of my Energy Store. I hope that we can install all of our SHS with Paygo switches very soon. Ivan Ashaba, Energy Store 5 Manager, FRES Uganda

In order to avoid customers from bypassing the switch and the SHS charge controller from being tampered with, FRES installed and locked switches within the already in use wooden battery box.

Installation of the Paygo Switches in Burkina Faso (Photos by FRES)

From an operational management perspective, the flexibility and interoperability PaygOps came into play to complete the Paygo pursuit, as FRES required a SaaS platform which was tailored to its last mile needs, particularly with regards to the management of contracts distributed over 4 countries. In this sense, the solar devices are always synced according to sales and payment schedules captured on PaygOps. Likewise, field agents are now able to handle their different sales and debt-collection operations with efficiency via the PaygOps Offline Mobile App, which allows them to collect data even in remote areas where there’s no internet connection.

We were truly excited to train the FRES staff on Paygo and Mobile Money technologies, being aware of how much of an impact working with PaygOps would represent for both their last-mile operations and the end user. Our platform, PaygOps, aligns quite well with our partner's mission, as it's conceived to support people to climb the energy ladder and access further essential services while improving their operations efficiency. Charlene Giraudier, Director of Customer Success, Solaris Offgrid (PaygOps)

Thus, PaygOps is currently backing FRES to record and monitor all of the customer interactions and payment data, serving the not-for-profit organisation as a complete last-mile CRM. The information concerning maintenance, however, is currently being recorded and tracked manually using an ACCESS database, which FRES foresees incorporating into PaygOps along with Customised Dashboards for each Energy Store and Cluster owner in order to track performance granularly and in real time. This is expected to further improve operational efficiency and reduce operating expenses.

PaygOps and FRES’ teams training FRES Guinea Bissau staff on Paygo

Results

So far, 5,500 Solarworx Paygo smart switches have been installed (as of August 2022) and are running smoothly at client premises across all of FRES countries, with 100% of the contracts being managed through PaygOps. In Uganda, for example, of the 3491 switches currently installed, only 230 customers with Paygo switches didn’t pay in the month of October. 9,000 additional switches have been shipped to the 4 operating countries to upgrade the remaining SHS, which FRES expects to be achieved by July 2023.

We're excited to be joining efforts and providing improved technology to FRES customers, as we are supporting 9,000 devices managed on PaygOps. The general customer satisfaction level is high and, on behalf of our distributors, we appreciate the work that the PaygOps team is doing. Felix Boldt, CEO, Solarworx

The impact of this joint venture is already being felt by both the social enterprise and the customers, with all FRES branches reporting higher repayment rates and fewer customer suspensions and terminations. The benefits of Paygo came along shortly after the switches were deployed, as the rate of suspension decreased from 5% to 1% in only 6 months, while the levels of debt have also decreased.

​Switches installed until 2022	Switches to be installed in 2023	Increased repayment rates	Suspension rate

Additionally, by adopting Paygo technologies, FRES is not only improving payment rates, but also enhancing after-sales services, as well as limiting credit exposure, reducing operational costs and customer attrition and minimising fraud risks, among others. What's more, FRES has successfully transitioned from a cash-based payment system to Mobile Money, further promoting financial inclusion among unbanked populations who can now climb the energy ladder with more ease.

On the other hand, Paygo and Mobile Money have helped significantly to improve the security of their 200+ field agents, who no longer have to carry around large amounts of cash and can allocate more time to more customers, as they no longer have to bring the cash collected back to FRES offices or to the bank, for instance.

The installation of the Paygo switches have really helped me in my day-to-day work, by reducing the need to visit every customer to collect payments. This has been especially helpful when dealing with panga-wielding customers. Patience Turyasingur, Energy Store 4 Field Officer, FRES Uganda

Customers now pay via Mobile Money	Field agents now feel more secure and autonomous to perform sales and debt collection duties	Reduced operational costs and increased efficiency for FRES teams

Having the full support of a flexible SaaS like PaygOps is enabling FRES teams to be more efficient in carrying out their operations, since less time is spent on collecting money, and time can be allocated to maintenance and marketing tasks. As a next step, PaygOps could help further if implemented to support field planning and enable maintenance scheduling.

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About FRES

FRES is a Dutch not-for-profit foundation that aims to advance electrification in rural Africa. We do this by establishing electricity companies under local management in areas that have no access to a national or regional electricity grid and that are insufficiently served by commercial solar energy providers. Our aim is for our companies to become financially sustainable in the long term. Expenses are kept to a minimum, and any profits are reinvested locally to support relevant expansion and finance future asset replacements, ensuring investments have a lasting impact.

About Solarworx

Solarworx is a German manufacturer of a new generation of solar home systems for off-grid households and businesses. Our goal is to foster the global energy transition and connect the 1.2 billion people living without access to electricity around the world. With our productive use bundles we aim to create local value and circular economy within the rural areas.

About PaygOps

Solaris Offgrid’s flagship fintech software, PaygOps, enables credit to be provided to the bottom of the pyramid for essential products like solar home systems, agri-inputs, water pumps. The end customers pay incrementally via mobile money under a PAYGO model. PaygOps provides the software infrastructure to manage the contracts, payments and related communication for the local retailers of such products. Our affordable modular and interoperable solution connects energy and payment methods (Pay-as-you-go, mobile money) to a suite of enterprise applications that allows the smooth management of lease financing and field operations, while providing key financial data and metrics to investors.