Productive Power to the People: Simusolar is Transforming How Tanzania’s Farmers Work - Acumen

Productive Power to the People: Simusolar is Transforming How Tanzania’s Farmers Work

By Dennis Otieno on March 25, 2019

Acumen’s latest  investment, Simusolar, is catalyzing a new form of power for Tanzania’s off-grid communities: affordable solar-powered appliances. For years, the promise of low-income customers, like smallholder farmers, gaining access to energy products beyond solar lanterns and lighting systems has been a hot topic. Now, Simusolar—which sells, distributes, and finances solar equipment like water pumps and fishing lights to rural farmers and businesses—is making that dream a reality.

What excites us most about Simusolar is (1) its laser-sharp focus on penetrating last-mile distribution hurdles, (2) its drive to stimulate income generation from solar-powered appliances, and (3) its customer-centric approach to business.

Simusolar’s appliances are reaching last-mile smallholder farmers for the first time. According to our Lean Data, Simusolar is providing first-time access to 100 percent of its fishing light customers and 87 percent of its water pump customers. The company’s mobile registration application allows staff to remotely register new clients for real-time underwriting and approval. And through Simusolar’s wireless platform, they can remotely monitor clients’ systems, service the products as needed with  product warranties, and collect valuable insights on customer needs to ensure satisfaction.

Driving income is also key. Because pumps are one of the more efficient ways to irrigate crops and solar fishing lights help fishers save on energy expenses, the systems have the potential to double incomes in under a year. The pumps increase yield per acre for farmers, providing alternatives to rain-fed agriculture, which can be unpredictable and unreliable with the changing climate.. An outstanding 93 percent of pump customers reported an increase in productivity yields and 100 percent reported an increase in income.

Lastly, the company is customer-focused, building deep relationships and employing dynamic pay-as-you-go pricing that aligns with customers’ ability to pay. Farmer-friendly payment plans are designed to meet the seasonal cash flows of rural businesses, making life easier on customers while reducing credit risk.

In Tanzania, agriculture is the single largest contributor of the economy’s GDP.. Of the  57 million living in Tanzania, 67 percent reside in rural areas. And around 85 percent of the rural population consists of farmers who are facing weaker yields and lower incomes due to climate change, drought, and unpredictable weather patterns.

Simusolar aims to be an engine that powers rural economic growth.  The company’s ultimate goal is to help change the rural economic model from subsistence farming—or providing food solely for one’s immediate consumption—to agribusiness farming.

Since 2011, Acumen has invested in multiple companies that provide access to productive use appliances, including SolarNow, Juhudi Kilimo, and KMRI. These investments have driven Acumen’s market insights on business models and types of productive assets preferred by rural households.

Acumen believes that access to affordable appliances will enable smallholder farmers to increase their productivity and incomes , which will ultimately lead to sustainable and resilient rural economies. Simusolar is playing a critical role to  deliver on this dream.

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