Partnership with solar supplier companies

1. Partnership with solar supplier companies SECRET OF SUCCESS OF THE SRI LANKAN SOLAR PV. PROGRAM

2. HISTORY / BACKGROUND • Single handed operation of the suppliers and the MFI proved to be less effective, progress was slow and the operation was not cost effective • SOLAR PV. COMPANIES – Market penetration did not work. Off grid village clients did not have funds to invest cash and purchase a solar home systems [SHS] SEEDS – Trying to play a duel role . Total service concept Supplier / Marketer Finance provider Slow operation - Unviable

3. Solution to the problem SPECIALIZATION-It was found that the special knowledge and capabilities of each party to be utilized for up scaling the SHS market THE MODEL INTRODUCED Financier and the supplier to join hands With clearly defined roles described in a Governing document --- MEMORANDUM OF UNDERSTANDING (MOU)

4. EFFECT OF MOU JOINT OPERATION of the supplier and the MFI – Win Win situation for both parties as well as for the customer due to the following. • Operational standards were established • Work norms & procedures were defined. • The suppliers’ and the financiers’ work force has teamed up together to carry out one common task , that is to provide a complete service to the client. • SOLAR COMPANY- Familiar with the requirements of the MFI. Act as a facilitator for the financier , Preliminary examination on Financial feasibility done , Equity contribution of the borrower confirmed MFI – Aware of all company procedures, Field officers technically trained, do minor repairs, facilitate complaints, keep a good rapport with the company staff

5. BENEFICIARY IS THE CLIENT • PV company sales person does the application level work for the client • Technical feasibility checked • Compulsory after sales service • Warrantees and guarantees • Educate the client of use of the system • MFI ACTS AS CLIENT’S watch dog IN COORDINATING AFTER SALES WORK, facilitates PROMPT ATTENDANCE FOR TECHNICAL FAULTS

6. Total service at doorstep Credit at better terms Warranty After sales service Synergy Scaling up with low cost Free publicity New clients Removal on non-payment Acceptance at the village level More sales More products Expansion island wide Win–Win Situation for All CONSUMER SEEDS COMPANY

7. Mutual work handling in risk mitigation and risk sharing • PV company collects the equity from the client, introduces the client to MFI • Provide a good after sales service and keeps customer service at satisfactory levels. • Remove the SHS of defaulted borrowers of MFI, store in their stores , find a new customer and re install the SHS to a new customer

8. SPECIAL ARRANGEMENTS • Collection of recovery by the solar PV. company • Storing the removed SHS as trust goods at no cost to the lender • Provision of some services at no profit no loss basis • Provision of office space for the lender by the PV. company • 5% retainer against technical defects of SHS introduced by the MFI lately

9. ADDED SERVICES TO THE CLIENTS IN ASSOCIATION WITH THE SUPPLIER • Repeat loans • Loans for up grading • New product offerings • Replacement of components at cost

10. LESSONS LEARN- – What has worked –what has not worked • Initial stage of operation – Lack of knowledge of the supplier’s sales staff has caused problems to the MFI PROBLEM AREAS - Client identification, income assessment, Completion of basic documents, Extracting correct and accurate information • Adverse effect of competition - Quality vs Quantity Unattended Technical faults caused customer dissatisfaction – Taking undue advantage of Poor education level of the village clients • Non availability of Ideal composition of the SHS for adverse weather conditions has developed customer dissatisfaction

11. Removal and reinstallation - Refurbishing • THE PROGRAM did not work properly when the numbers became large. Refurbishing became costly and the refurbished SHS became expensive. HOW DID THEY HANDLE THE SITUATION

12. Change the procedure • Re installing without re-furbishing • MFI employees to look for new clients • Commission for re-installations • No fixed equity Initial expenditure for wiring is the contribution • Balance capital as a loan • This simplified procedure has been the answer for clearing the removed SHS stocks.

13. Operation of the Change procedure • There again with the assistance of the supplier company • Re-fixing by the company technical persons • Balance period of the warrantees offered to the new customer • After sales service to the new customer

14. Way Forward More stronger and more flexible relationship • Training & joint awareness, marketing programs • Developing the knowledge of the suppliers’ sales staff by distributing leaflets on the lending program of MFI • More frequent meetings with the staff at all levels of the supplier companies • Monthly meetings between solar center staff and MFI field staff • Adoption to what ever changes

15. Ultimate motive of Sharing Risks • Reduce the risk of default – • Keep the customer satisfied with the service and prevent the program falling apart on customer dissatisfaction. • Preserve the quality at all times

16. SUCCESS FACTORS in the partnership KEY WORDS Flexibility Cooperation Understanding Do change according to the needs of the market