Establishing local solar light businesses means we can reach further faster and create a ripple effect of change throughout communities. Microfinance offers a path to start and scale a business for entrepreneurs in remote, rural communities.

Why Microfinance – Reaching Rural Areas

The traditional banking system and Microfinance Institutions (MFIs) are not set up to provide loans to entrepreneurs in rural areas. People in remote, rural areas are seen as high risk due to their location and lack of collateral, credit history and formal business registration. 

When loans in these communities are available, they often come with high-interest rates, averaging around 40% per year. High-interest rates can make it difficult for small business owners to make a profit and grow their business.

Our work in the most remote areas of sub-Saharan Africa showed the need for financing solutions that worked

Penny Mupeta, a solar entrepreneur in Zambia, demonstrating solar lights to a customer. Photo: SolarAid/Jason J Mulikita.

How does it work – Affordable finance

SolarAid offers microfinancing to the entrepreneurs we work with in two main ways – consignment and our cooperative, Financing Energy Businesses Cooperative (FEBCO).

In Zambia, we have created a zero-interest credit facility. Solar entrepreneurs receive the stock they sell on consignment and pay SolarAid back when sold. The zero-interest credit facility allows the entrepreneurs to have enough stock to sustain the business and agree on a flexible payment plan, depending on how they make their returns as they continue to provide clean, safe solar light to people in their communities. 

In Malawi, we created the first energy focused cooperative in the country, FEBCO. It is a membership organisation run by Solar Entrepreneurs for Solar Entrepreneurs with the most affordable interest rates in Malawi. Solar Entrepreneurs and Mayi Walas can join FEBCO as members by investing some of their own money, differing depending on the type of entrepreneur. This capital is supplemented by external financing from the supporters of Lendwithcare. It is then all pooled together for members to access as a loan to help build their businesses. 

"Becoming a consistent agent not only gives me an opportunity to sustain my business through the credit facility under SunnyMoney’s agent program, but also the honour of being able to make a positive change in my community… more people can now access clean, safe lighting as opposed to candles, kerosene and the regular spending of money to replace torch batteries."
Mengezi N’cube, Solar Entrepreneur Zambia

The Impact

Across Malawi and Zambia, we have reached hundreds of entrepreneurs. These business owners have started and scaled their businesses allowing them to reach more people with clean, safe solar light while creating sustainable income and development for their families and communities. 

Affordable financing options have the potential to revolutionise the adoption of renewable energy sources like solar power in rural communities while ensuring that the loans do not burden poor communities with excessive debt. 

Stories from the Ground

A sense of independence

Eness Naliwa struggled to feed her family with the small amount she made from her businesses. When solar came to her village, everything changed.

A group of women from the Chimwemwe Mayi Walas are dancing and celebrating together under a tree.

The Power in Togetherness

There is power when women come together. Mayi Walas, Margret and Sagurani, know this first hand. From creating thriving sustainable businesses to building relationships with other women in the community, solar lights change everything.