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Digital finance for energy access in Uganda: Putting mobile money big data analytics to work

Access to clean energy is a basic need that directly supports people’s livelihood, yet more than 30 million Ugandans live without electricity. Pay-as-you-go (PayGo) is a promising and innovative financing solution that can make clean energy affordable for low-income people. However, there remains significant knowledge gaps regarding the digital energy finance market’s size, outreach, growth and impact.

This study leverages anonymized mobile money data of PayGo solar energy users in Uganda to gain insight on digital energy financing in Uganda. It also draws from a customer phone survey that assesses solar product adoption and quality of life improvements. We find that the Uganda solar market is growing rapidly and currently has around one million active customers. Around 12 percent of the Ugandan households own a solar home system and there is opportunity for further market expansion, especially in areas with high levels of mobile money penetration.

The clean energy market is becoming more inter-connected with the digital finance market. In fact, digital energy financing through PayGo has promoted wider financial inclusion around 110,000 new mobile money customers. Likewise, when Uganda’s implemented a temporary mobile money tax it caused an immediate slow-down in PayGo uptake and new mobile money activations indicating it negatively impacted the country’s access to clean energy and formal finance.

The customer survey result indicates that poorer customers seem equally able to purchase larger solar systems as compared to richer customers because of mobile money financing. Mobile money transaction data confirms this pattern as PayGo customers are making smaller and more frequent transactions of around US$2-3 on average indicating solar home systems are indeed becoming more affordable for low-income populations. There seem to be strong customer journeys as around half of the surveyed customers purchased at least one additional energy product within three years of their initial solar product purchase.

Customers perceived various positive impacts on household’s quality of life including a reduction in use of traditional fuels, increased savings, health, increased study hours and safety improvements. These results highlight the importance of using customer data in designing business strategies and policies aimed at achieving energy access targets in Uganda.


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