Following my last post about the Escaping Darkness report by CGAP, I’d like to focus on the last chapter of the report, which deals with drivers for payment performance for PAYGo Solar clients.
Among those drivers is flexibility. In the following infographics, CGAP summerized how daily PAYGo models are more flexible than monthly ones and allow for a wider range of repayment patterns, answering the needs of a more difficult to serve market segment.
“I can pay what I have”
Flexibility of daily repayment patterns go beyond grace periods, partial payment, or authorized late payments associated with penalty fees. Flexibility is rather about the customer being allowed to pay what they have when they have it.
They can pay in advance (with a discount for early final repayment) or pay late (this would cut power off but not generate any additional fee). They can pay regularly or pay in lumps depending on their income. After a payment delay, paying again, even a small amount, would automatically turn the power on again, except after a too long payment delay (~90 days) where a sustantial payment would be required.
Such a system is closer than traditional ones to person-to-person loans you would do between relatives or friends. This proximity and simplicity build trust for the customer who is willing to pay but meets unexpected circumstances. It avoids the financial burden as well as the shame one can feel when not respecting their engagements. Ultimately, such a system helps building, growing, and preserving the customer relationship with such a market segment.