May 2017

Public version

Field Studies

The cosTs of collecTing cash

This report examines the added value of mobile money for a Solar PAYG
business model. Through the learnings of Solaris Tanzania (branch of
Solaris Offgrid), it explores the operational limitations of working
under cash payments (versus mobile money) and shares a few tips on
how to restrict its usage.
 Who we are Solaris Offgrid
Field Studies

Solaris Offgrid designs and manufactures

integrated solutions to foster affordable and
sustainable energy access in off-grid areas.
We have been dedicating incredible efforts in R&D since
2014, and successfully experimented it with our last mile
operator Solaris Tanzania. With Solaris Offgrid we scale
up the impact by sharing this unique integrated solution to
our local partners across developing countries.

We run our own field operations And share the recipe of success
in the north of Tanzania to our ambitious partners

POWERING
V I L L A G E S
E M P O W E R I N G
entrepreneurs
Solaris Offgrid and Solaris Tanzania are
trading brands of Eternum LTD
OuTlines Solaris Offgrid
Field Studies

This report explores the findings of Solaris

The cosTs of Tanzania. It looks at how our customers have
shifted towards making cash payments, and
collecTing explores the motivations behind this. It then
cash notes the impact of this for the business and
discusses a few ways to reverse this shift.
Contents
• Pages 1-3: Introduction slides
• Page 4: Executive summary
• Page 5: Methodology
• Page 6-7: A shift to cash
• Page 8: Measuring the impact
• Pages 9-13: Understanding why
• Page 14: Finding a solution
• Pages 15-17: Concluding slides
ExecuTive summary Solaris Offgrid
Field Studies

What we believe are the main take-aways of this study:

• When offered the choice between paying through mobile money or cash,
many customers opt for the latter. Whilst this is appealing for customers, the
costs involved in collecting cash make it unsustainable for the business to
scale up.

• The reasons that these customers choose cash are:

• Convenience;
• Problems with mobile money;
• Unable to read;
• Afraid to make activation mistakes.
• Calling customers to remind them to pay will be more effective than visiting
them.

4
MeThodology Solaris Offgrid
Field Studies

This Field Study explores the

shifting patterns of payments
between cash and mobile money.
To do so, it looks at the payment
data of Solaris Tanzania for the
year of 2016 – a total of nearly 7000
payments from about 800
customers.

When exploring the details of this

shift, we ran a survey of customers
who were regularly paying cash.
We spoke to 30 customers who had
used cash for their previous three
payments.

5
A shifT to cash Solaris Offgrid
Field Studies

Solaris Tanzania offers mobile money payments, a quick and simple way for a customer to
activate. Alongside this, we have also allowed onsite cash payments when enquired. The
reason for doing so is that we realised that often our aftersales representative team would
visit a customer to remind them to pay, and that customer would have the cash to pay
directly there and then.
When reviewing our payments for the year 2016, we realised that the number of cash
payments had increased dramatically:

Evolution of Cash payments

from January to December 2016: x4
What had begun as way to provide extra convenience for a few customers was quickly
growing into a major method of payment, with customers waiting for aftersales
representatives to visit before paying. The next step was to look at the impact this has on the
business.

6
A shifT To Cash Solaris Offgrid
Field Studies

Collecting cash payments, when first introduced, allowed us to combine a visit with a
payment. However as customers began to wait for a visit to pay in cash, we were faced
with a x7 increase in the number of payment reminder visits, illustrated below:

Payment Reminder Visits Per Customer Index

7
6
5
4
3
2
1

Feb Mar Apr May Jun Jul Aug Sep Oct Nov

As visits for other reasons (such as technical support or help with activation) remained
steady over the same time, this was causing us to make an increasing number of visits to
each customer. The impact of this is examined on the next slide.

7
Measuring The Impact Solaris Offgrid
Field Studies

To see the economic impact of visiting a customer to collect cash we carried out a
simple cost calculation – looking at the cost to visit and the average amount paid.

We realised that for an average payment collected in cash, 80% of the value was
invested in the collection process… When we consider that a mobile money
payment has negligible costs, shifting to more visits is clearly unsustainable.

To understand and overcome this issue, we needed to explore the reasons that
people were paying in cash.

8
UndersTanding why Solaris Offgrid
Field Studies

We identified customers who were paying cash regularly, and surveyed them to
understand why they were doing so:

Main principal reasons for paying cash

60%

50%

40%

30%

20%

10%

0%
Convenience Problems using Cannot read Afraid to make
mobile money activation mistakes

This shows that the majority of customers who pay cash do so for the simple
reason that they like the convenience. The next few slides examine each of these
reasons in detail.
UndersTanding why Solaris Offgrid
Field Studies

“I like the convenience”

#1
The majority of customers fall into this category. They are
probably comfortable paying with mobile money, but
typically deal mostly in cash, and so they enjoy the
convenience of just handing cash to an aftersales
representative when they come to make a visit.
UndersTanding why Solaris Offgrid
Field Studies

“I have problems using the

mobile money service” #2
This category includes those who:
• Don’t have a mobile money agent in their village;
• Have lost their phone;
• Or are not comfortable with the process of using mobile
money to pay.
UndersTanding why Solaris Offgrid
Field Studies

“I cannot read”
#3
Typically older customers, this group feel unable to send
money and activate as they cannot read. They therefore use
the cash payment as a chance to have the aftersales rep
assist with activation as well.
UndersTanding why Solaris Offgrid
Field Studies

“I am afraid to make
activation mistakes” #4
Similar to the third category, these customers are not
comfortable with the process and so they prefer to have the
aftersales representative physically with them to support
when they activate.
Finding the solution Solaris Offgrid
Field Studies

To tackle these issues, we decided to make more calls and fewer visits to remind
customers to pay and to limit abilities to pay per cash to an aftersales agent. First,
we looked at how effective both channels are (success is seen as the client
activating within 2 days of the interaction):

Visits Calls

Conversion
rate
CONFIDENTIAL

Visits were seen to be more effective than calls. However we noted that the
aftersales technicians were not the best people to be making these calls, so we
decided to train a focused customer services rep to make calls with a clear
process to follow.
We therefore shifted our reminders from visits to calls. By doing so, we were able
to reduce the total number of visits we made in a month by 66%.
 Conclusion Solaris Offgrid
Field Studies

• When given the choice, many customers will

move towards making cash payments. Their
motivation can be summarized in the
following:
1. Convenience
2. Problems with mobile money
3. Unable to read
4. Afraid to make activation mistake
• Visiting customers to collect cash turns to
encourage them to adopt such mean of
payment, very costly for the last mile operator.
• Restricting cash payment and carrying
payment reminder mostly through phone calls
are necessary step toward an efficient scale up
approach.
Author: D.Henry
 Our integrated solution Solaris Offgrid
Field Studies

The 4 crucial components of a sustainable & T h e 3 m a i n m o d e l s o f

profitable business model T E C H N O L O G Y I N T E G R A T I O N INTO
Y O U R A P P R O A C H
HARD SMART & MODULAR
charging controller including
W A R E PAYG technologies FULL HOME SYSTEM
Be exclusively dedicated to this
range of technical solution and
replicate our successful Tanzanian
SOFT CUTTING EDGE CRM model, partially or totally
enhancing customers and
W A R E resources performance monitoring
WITH APPLIANCES
Our solution will allow you to extend
your range of products from entry level
EMPOWER STRATEGIC & TECH powercapacitiestoaTV-friendlysize in
expertise in running a Solaris order to follow your customers’ needs
M E N T business is shared from day one

WITH MINI-GRID
FINANCE MA T C H F U N D I N G Our solution will give you a flexible and
cost efficient way to extend the reach of
can be provided to cover post pilot your grid to un-served customers while
P U S H capital expenditure effort relying on a CRM to manage them all
 Field Studies

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