Until 2016, product sales of solar lamps in Nigeria were mostly limited to urban and peri-urban consumers that purchased products outright, without consumer financing. This contrasted with East Africa, where the pay-as-you-go (PAYG) model was well on its way to scale.
In this context, between early 2017 and early 2019, SF supported – alongside UK DFID – Greenlight Planet to establish an on-ground presence in Nigeria and test whether the combination of technology-enabled consumer financing and an active direct sales agent model could help accelerate access to off-grid energy solutions in the largest individual market in Africa, particularly in peri-urban and rural locations.
The following emerged as key learnings:
- PAYG operations in Nigeria must accommodate cash-based and cashless payment channels, though cashless systems result in stronger on-time repayment patterns.
- An understanding of the total cost of ownership significantly influences a decision to purchase a solar home system through a PAYG plan.
- The field sales agents and managers that have taken a leap to the off-grid solar industry have faced steep learning curves.
- Prospective PAYG customers take twice as long to close in Nigeria than in East Africa
- A multi-channel approach is imperative to accelerate market development
“Overall, the Nigerian market holds many challenges, especially compared with some of the more developed markets for distributed off-grid energy solutions, but it also holds a lot of promise and can be developed with meaningful investments, patience, and local adaptation,” said Radhika Thakkar, Director of Corporate Affairs at Greenlight Planet and the report’s author.
Read the full report here, with details of methodology used to develop the lessons, and the outlook for future expansion of the PAYG direct and distribution partner business models.