PAYGo PERFORM: Performance & Contract Size

This slide deck is a supplement to the official CGAP Blog “How Can PAYGo Solar Reach the Underserved and Stay Sustainable?” (Dec 2024)

The blog examines the sustainability challenges in the Paygo solar sector, focusing on differences between companies offering smaller and larger contracts. Companies providing smaller loans typically serve lower-income customers and have a broader outreach, especially in East Africa. However, these firms face challenges such as worse collection rates, slower portfolio growth, and higher dependency on subsidies. Their financial performance is weaker, with lower earnings and higher reliance on external support. Despite these issues, they achieve greater penetration in underserved areas, highlighting a trade-off between profitability and broader energy access.

This analysis emphasizes the critical role of smaller-contract companies in achieving energy access for vulnerable populations. Their struggles with financial sustainability underscore the need for targeted support to maintain their outreach. Subsidies remain a key component for both smaller and larger firms, but smaller firms appear slightly more efficient in their use. The findings stress the importance of balancing outreach with financial viability, ensuring that the sector does not shift focus entirely to wealthier customers at the expense of equitable energy access.

Disclaimer

This work was commissioned and funded in whole or in part by CGAP. The publication is a result of a collaboration with GOGLA and ATLAS as part of CGAP’s efforts to monitor the state of the PAYGo sector using the KPIs developed under the PAYGo PERFORM Initiative. Unlike CGAP’s official publications, the viewpoints and conclusions expressed are those of the authors and they may or may not reflect the views of CGAP staff.