Modern farmer financing for irrigation solutions

With our existing solar distribution and financing we can create a breakthrough in financing solar irrigation for small scale farmers.

Photo of Peter
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I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

SolarNow

Year founded

2011

Initiative stage

  • Growth (the pilot has already launched and is starting to expand)

Annual budget in 2017 (USD)

  • Over $5mil

Number of beneficiaries impacted so far

  • 10,000 - 50,000

Organization type

  • Social enterprise

Secondary Focus Area

  • Rural development

Headquarters location: Country

  • Uganda

Headquarters location: City

Kampala

Location(s) of impact

Uganda: ALL districts (SolarNow has 47 existing branches)
Kenya: Western Region (SolarNow currently has 5 branches and will open 4 more in 2017)

Website

https://www.solarnow.eu

Facebook URL

https://www.facebook.com/SolarNow-144484182305237/

Twitter URL

https://twitter.com/solarnowbv

Problem: What problem is this initiative trying to address?

Introducing irrigation solutions and financing for small-scale farmers will improve resilience to climate change and boost farmers' incomes.

70% of Uganda’s population is involved in farming, relying their farming practices on rainfall. Changing weather patterns has made rain-fed agriculture highly unpredictable and led to low productivity. The potential of irrigation in Uganda remains largely untapped due to limited access to normal financing for agricultural assets and an underdeveloped supply chain.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

Using our existing financing and distribution, farmers can suddenly get access to affordable irrigation equipment!

SolarNow has already included solar irrigation solutions to their product line, which can be purchased on credit. A farmer can opt for a cash or a PayPlan up to 2 years with fixed monthly repayments. The program would enable us to develop tools that allow introduction of harvest dependant and thus fully customised PayPlans. This will give large numbers of farmers access to irrigation solutions who typically don’t qualify for a credit product elsewhere.

Farmers typically start with a basic irrigation solution, and as soon as cash flow permits, continue investing in more advanced irrigation equipment. This program will allow us to expand the product range in agricultural solutions suitable for improving small scale farming businesses.

The program would also foresee the development of agri services and creative and innovatie market awareness campaigns!

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

SolarNow’s Solar Home Systems already touched 150,000 lives in rural Uganda and Kenya improving their quality of life!

Since its establishment in 2011, SolarNow has developed and optimized a distribution and financing system that has resulted in a network of 47 branches in Uganda and 5 in Kenya, with over 800 staff employed. To date we have sold to over 17,500 rural clients, many of whom have become ambassadors and repeat clients.

Since 2016 we have added solar irrigation solutions to our model, which has resulted in over 5,000 sales leads and 150 solar pumps sold. These solutions help our clients to cope with the effects of climate change. So far, over 65% of our clients have already seen an increase in income, and 50% of our clients have replaced their fuel pump with our solar solution, which contributes to the reduction of GHG emission and results in cost savings.

According to our clients: “Work is no longer tiresome. All we need is sunshine and our pump runs for free!"

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

Social impact is achieved through commercial sustainabilty!

SolarNow is a commercial entity which means that all income come from earned income from our clients. Start-up losses to date were funded through equity, i.e. external shareholders. SolarNow is currently near break-even with realistic projections for 2018 to be operationally break-even.

Starting a new venture under the SolarNow umbrella like the sales of agricultural products come with start-up losses but will eventually be commercially sustainable. SolarNow seeks additional funding to cover for these start-up losses which will allow for more aggressive investments that accelerates the lift-off for this new product range.

We recently attracted $6 mln debt funding for funding of the credit, allowing us to scale our model.

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

Commercial sustainability only works if you understand your clients and offer products they want and need!

SolarNow’s proven distribution and credit system offers a great vehicle to launch agricultural products that support small scale farmers in professionalizing their business. We have the expertise to introduce customized payplans due to our 6 year track record in managing a credit portfolio and our on the ground presence across Uganda in 47 locations with over 800 committed employees.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

After years of trying to get others involved in financing solar solutions for the massive off-grid population in East Africa, we have built our own scalable business from scratch in which sales, financing & after-sales work hand in hand to offer products and services that clients are happy with:

A recent market study showed us that market prices in Uganda double or even triple during the dry season due to under-production after the rainy season. This opportunity is largely untapped, due to extreme low technology uptake by small scale farmers. After 6 years of fine-tuning and scaling, SolarNow's model has proven to be successful for selling high quality solar home systems, and is now ready to launch agricultural products that will enable farmers across rural Uganda and Kenya to professionalize their farming business and tap into this potential!

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Social media

5 comments

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Photo of Giulia

Dear Peter,

what a great innovation you shared. Irrigation is such a big challenge for small scale farmers accross Africa. In Ghana many farmers experience similar challenges. Would be interesting to pilot your innovation on this side of the continentDo you have any plans to start operations in new countries?

Best,

Giulia
MoringaConnect

Photo of Peter

Dear Giulia,
Great to hear from you! We don't have operations in West Africa yet, but we can connect you to a distributor of the irrigation solution in Ghana. Please send me your email contact, than I can link you up!
Best regards

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