Understanding and Expanding Distribution Networks
ISOBEL COLEMAN: This is our third and final panel, and the focus now is on distribution. How do we -- we've heard about the opportunities and the challenges in the first session, we've heard from the innovators about the makers and getting the products out there, and now these are the people who are actually trying to get the products physically out there, get them into the hands of users.
And we have Katherine Lucey, who's the founder of Solar Sister; we have Carolyn Makinson, who is the executive director of the Women's Commission of the IRC; and we have Toshi Nakamura, who is co-founder of the Kopernik, and I'm going to let each of them tell you in more detail what they do.
I'd like to start with Katherine and Solar Sister, which has been doing some very interesting work really trying to get these products and these new technologies out into the field, and working with women; and I know that they've got a particularly interesting pilot in Uganda going on.
So, Katherine, could you start by just describing Solar Sister -- what it does; how you came up with this idea; what need was it filling; and tell us a little bit about the pilot also, in Uganda.
KATHERINE LUCEY: Sure. Thank you. And thank you for having me here today.
Thank you, Laurie, and ExxonMobil for having me participate. I feel like, after listening to everybody this morning, I'm preaching to the choir. So I've been set up very nicely. As a matter of fact, two of my Solar super-heroes are sitting right here in the front row and just finished a panel -- Mark Bent with BoGo Lights, and Lauren with SELF.
Solar Sister is the little sister of these organizations, really. It's an organization that is focused on the distribution of the solar technology. And, very specifically, the core of what we do is distribute the solar lantern technology out to the very end user. We are the last-mile delivery system out to the women out in the villages, out beyond the grid, out in the, you know, the far reaches of Africa.
And the way we've developed our organization, the way we've developed our distribution system is it is a "by women, for women, to women" distribution system where the women sell the lanterns to women, families, men, you know, to their communities. And so it both provides an income for the Solar Sister -- the woman who is the local distributor, the entrepreneur, but really the bigger impact is the distribution of the lamps way beyond the one woman who's the entrepreneur, to the many hundreds of people and families that she can sell to, these lanterns.
This really has come about just -- it couldn't have happened three or five years ago. It's really come about just in the last few years as the solar technology has improved, and the availability of the types of lanterns that Mark was showing you, the affordability of these lanterns, and the -- you know, the availability of these to go out into the marketplace.
And so what we're really focusing on now is accessibility, because if you -- if, for example, where we're running our pilot project, you can buy the solar lanterns. You can't actually buy Mark's yet, so we have to work on that. But you can buy the -- some of the solar lanterns in Kampala in one store. And it's a man, he's a distributor for large-scale solar products, and batteries and expensive equipment, and he happens also to be distributor for these little solar lanterns that he sells for $15.
Well, a woman who lives eight -- you know, an eight-hour bus ride from Kampala in a village, who has never left her village for her entire life, is not going to come into Kampala; find the store. It's in a funny part of, funny part of Uganda -- funny part of Kampala. It's behind a large wall with razor wire on the top, because he's got quite a bit of expensive equipment up there. There's a guard with a gun at the door. It's -- you know, marketing is not actually his best -- (laughter) -- quality. And you go in there; and he's great, and he very much supports the idea of getting these lights out to the women but it's just not his priority.
And so what Solar Sister steps in and does is we bring the lights from there; we take them out to the village; we work with women in the village to support, encourage, train them to become Solar Sisters; and then they sell the lanterns out into their -- into their marketplace.
COLEMAN: But how do you -- are you fronting them the costs so that they can purchase four or five of these things at a time and then go out and sell them; because they don't have the money to do that?
LUCEY: Right. For the Solar Sister entrepreneur, what we're doing is we are supporting her with an initial inventory, and basically we are -- we're providing her a working capital inventory of a set of lanterns.
COLEMAN: How many?
LUCEY: It's about 50 lanterns.
COLEMAN: Fifty, okay.
LUCEY: And she takes those and is able to sell them. When she sells them, she gets money coming in; she earns a commission. This is actually run on a commission basis, basically. She's sort of like Avon ladies, I think, is the way you can think of it. These are like Avon ladies with lights. And she earns a commission, but the rest of the money that comes in funds her next inventory, and so it's a rolling inventory financing.
If one day she stopped being a Solar Sister, the money that we lent her -- you know, in the beginning to buy her first inventory, would come back in her final sales. My hope is that she is selling into perpetuity -- you know, she will be forever a Solar Sister. And this is an income that she is able to provide over and over and over again, so, practically speaking, that initial inventory is a seed capital.
COLEMAN: And so how many Solar Sisters do you now have at this point?
LUCEY: Well, we're just in our pilot project, so we have four Solar Sisters who are up and running. And I just got back from Uganda where we seeded these Solar Sisters, and it was incredible. It was so exciting. I mean, the very first -- the response in the villages, and from these women, was so enthusiastic. We were able to find -- I have two different experiences:
In one case we were able to immediately locate the woman who would be the Solar Sister. She was already running a small store in her village, you know, selling all kinds of really small sundry things. This is a village that's up on Mount Elgon in Kapchorwa, in Eastern Uganda. And so she understood buying, selling, making a small profit, and clearly was going to be our Solar Sister.
As a matter of fact, when we -- by the time we explained to her that these are not a gift -- we are not here to, like, hand out lights; we're not a program of giving away light; this is a commercial operation. And when we explained that, and she finally accepted that -- because it, that takes a little bit of a cultural challenge, actually, because so many places are so used to NGOs coming in and giving things away.
But when she finally accepted that, she turned around and looked at me, she says, "Yes, but if I sell many of these, you're going to give me a proper discount." (Laughter.) I thought, okay, I've got my girl. (Laughter.)
COLEMAN: How is she able -- is she, has she sold any? I mean, you have to now convince somebody to part with a fair amount of money to buy one of these things. I mean, she's selling them for, roughly, $15? I don't know how much she's selling for.
LUCEY: There were two styles that we took out: One is a simple lantern that provides light. It's really a very good -- it's equivalent to probably the smaller light, the Mini-BoGo, as far as being able to provide light. And then the other one -- I took sample with me, because I didn't actually expect it to be successful because it's quite expensive in their terms. It's a $45 purchase, but it's a light and a phone charger.
And so we took both these lanterns and we gave her an initial inventory of a box of each -- which is 12 of each, to sell to see how this would go. And by the time we got back to Kampala, she had already sold half of each box. And so she's well on her way to -- As a matter of fact, now we're sending out her next -- she's already sending back in her money -- and sending out the next set of lanterns for her to sell.
And one of the -- one of the things we learned was that the phone-charging lantern was hugely successful, even at the $45 dollar price, which is a lot of money.
COLEMAN: And is the person buying it then using it for their own personal use, family use, or are they then renting it to a larger group?
LUCEY: I suspect these are people using it for themselves, although, I mean, that's open-ended. You know, there's no -- they can do what they will with it. It's really -- if they want to have people charge phones, and charge them.
The reason the phone-charger was so expensive, one of the gentlemen, one of the -- the gentleman who bought the first one said he pays 1,500 shillings to go down to town -- to take a bota-bota (sp) down to town; 500 shillings to charge his phone; and 1,500 shillings back. So that's about $1.50 every two or three days to charge his phone; and, easily, $1.50 every two or three days adds up to $45, you know, pretty quickly.
In the second village we went to, it wasn't as obvious who was going to be the Solar Sister. There was no one who really stood out. But we went through the whole program of, 'This is the solar lights; they replace the kerosene;' all the health benefits; you know, we went through all this, and that they're going to be sold to you. And the women looked and they said, well, we can't afford these, and this "We can't. We don't have -- nobody has $ 15 in their pocket. We can't afford these."
And I'm working with the Mothers Union in Uganda, which is a -- they've been there for, you know, 50 years; they're deep into every village. And the woman who was with me, she's Ugandan, was explaining to the women that this is a -- this is a purchase program; you know, we're not here to give these away, so you're going to have to figure it out.
And the women talked among themselves and then they came back -- one of them came back up and said, "This is what we're going to do: Every month -- every week we get together for our family programming, and we are going to put -- we put a little bit of money into the pot. And the first week, we're going to buy a lantern and give it to one family; and the next week we'll buy a lantern and give it to the next family; then next we'll buy -- and, you know, so on and so forth, until everyone in the, in this community circle had a lantern.
And what's brilliant about this is, for one, it comes from them -- it was their solution. Secondly, it's a blend of microfinance and microsavings, without the, you know, 30 percent interest rates that they'd incur; because they're funding each other, they trust each other, they will be responsible to each other. And so their term for it's "merry-go-round" financing, which I had not heard before.
But they do this often. This is how they handle -- if somebody needs to go to the hospital, it's through this little merry-go-round financing pool of money that they would send somebody to the hospital; if somebody has a wedding, you know, they pool the money for a celebration. And so it's a financing program that they have in place already that they were willing to apply to purchase lanterns.
COLEMAN: Thank you, Katherine.
Toshi, can you tell us about Kopernik and what you're doing? I think Toshi's got a few slides he's going to show also.
TOSHIHIRO NAKAMURA: Thank you.
So Kopernik is an on-line marketplace for the technologies designed for the developing world. I mean, technology -- so these are kind of technology that we deal with on our Kopernik platform. So, one is a Q Drum. You see that normally in developing countries a woman walk many hours to fetch water, and usually it's between five to 10 liters, and they walk very long hours. And this Q Drum will enable them to fetch up to 50 liters of water without putting that water on their head. So it's very, very time-saving device for the developing countries.
And another example is that -- the water purification. So you can fetch water, but the quality of water is really bad. So this LifeStraw that we have, it's $6.50, which basically clean -- remove 99.99 percent of bacteria from the dirty water.
So we have many other products. These are just two example. We have 14 so far in the areas of agriculture, water sanitation, health, ICT and education. And when we speak with these great inventors of these products, they all have really two big issues in common:
One is the distribution. So, you know, they can sell a small amount of these technology to a few people -- 10, 20 people, but it's very difficult to scale expanded distribution channel.
Number two is the pricing. I think this was one of the questions that you asked. If you are living under a dollar a day, it's very, very difficult for you to be able to purchase these great technologies, which potentially have a great impact on the quality of life.
So Kopernik is trying to address these two issues -- distribution channel and the price, by connecting the three actors on-line. So this is how it works. We have individuals, like anybody, like you and me; we have companies or universities who produce these -- who invented these technologies, on the left-hand side; and on the right-hand side, we have the local organizations -- so mainly, at the moment, with the local NGOs in developing countries.
So we showcase -- sorry, we feature these amazing technologies on our website, with a description, how much it will cost, et cetera. And by looking at these menu of technologies, local organizations will pick the most appropriate technology that they want to use to serve their community, and they articulate it how they want to use in a two-page proposal. And that will be then posted on our website, and it will be crowd-funded.
So anybody can put $10, $20 towards the realization of these proposal, and once money is collected, then it's ready for shipping. So this product will be shipped directly from the companies to the local organizations, and the local organizations will then implement the project; report back through our platform, including the feedback on the product -- whether they were happy, or not happy, what can we improve, et cetera.
So it's really like you could say that this is sort of a Amazon, plus a Kiva-type of platform. And so we feature a number of products like this. And you see the proposals on the left-hand side, that's where the money is collected.
So this is a basic model and we are now expanding into a more locally-produced technology dissemination. One example: So we are now partnering with MIT's D-Lab, and they have amazing technologies which can be constructed using the local materials. One example is, this is sort of a fridge, so it keeps the fruit cold so that it doesn't get rotten. And it has, you know, it has an instruction on how to build, what kind of materials you need, and it's very, very simple thing to make.
Another example is a battery, and it's, you know, how to make these batteries.
And a third example is chlorine, which basically purifies water, and then end up -- the chlorine-making process, you need to separate some chemicals from others, and then use the bicycles's pedal in that process. So it really has, you know, how to -- sort of, a DIY-type of instruction.
So now we are not only disseminating, sort of, off-the-shelf products from one country to another, but we expanding into more locally-producible technologies.
COLEMAN: So Toshi, can you give us examples of how the first example -- which is the off-the-shelf technology and the crowd-funding, the crowd financing, the Kiva model, in effect -- can you give us an example of how that's actually worked? What impact have you had so far in that? And how are you getting the word out to the crowd? I mean, how does the crowd know about the Kopernik?
And then also, can you give an example of the local user; how are they hearing about this and being able to -- I mean, it sounds sort of sophisticated to have to go on a website and put in the technology that you want, that may be beyond the sophistication of many of the end-users.
NAKAMURA: Thank you.
So we have piloted four project last year, distributing this LifeStraw, the water purification system. And then a -- I didn't show it, but adjustable glasses. So you basically control the amount of silicone liquid going into the lenses, so you can actually adjust the strength yourself. So you don't need the doctor to prescribe, and doctor is really lacking in most of the parts.
So the experience is that it's very, sort of, intuitive technology, so people immediately "get it." So they -- you know, we got very, very good feedback on many of the products we distributed so far.
On the PR, I try to speak in occasion like this, but we do all this little basic social marketing, using Facebook, Twitters, and we try everything we can possibly think of. And it's gradually, I think, getting more and more page-view and visits, so that's (good news) --
COLEMAN: And how many donors have you had so far?
NAKAMURA: We have about -- so we launched on the 19th of February, which is the birthday of Koperniks, and since then I think we have about 30, 40, 50 donors, individual donors making small donations; and the average donation, so far, is between $80 to $90.
COLEMAN: And how many donors does Kiva have, roughly?
NAKAMURA: Additional loan that they collected last year exceeded $60 million, so --
COLEMAN: Sixty million (dollars).
NAKAMURA: Yeah, so it's huge --
COLEMAN: So crowd-financing is a -- has enormous potential.
NAKAMURA: It has enormous potential and it's growing at the rate of 50, 60 percent a year.
NAKAMURA: So the last point, on the local NGOs: So we didn't do much PR to reach out to the local NGOs, but we already got 250 NGOs lined up to partner with us.
And I lived in Sierra Leone between 2007 and 2009, which is one of the poorest countries, according to the Human Development Index of the UNDP. And even in that country, outside of the capital you can always find Internet cafe. And those we are -- who we are working with is the local NGOs, who are actually the local leaders in their communities, so they know how to get to these points. So, so far we didn't have much problem reaching out to the NGOs.
COLEMAN: Carolyn. Carolyn brings a very important perspective here, which is the refugee community.
And we've heard, in each of the panels, reference to the refugee community -- Leslie was talking, in particular, this morning about the use of cookstoves with refugees; Mark has worked with refugee communities to distribute lights.
And Carolyn, I know that you've had experience in trying to get some of these new technologies out to refugee communities. So maybe you can talk a little bit about what the Women's Commission is doing, and some of the successes, and some of the challenges that I know that you've faced along the way in trying to get adoption.
CAROLYN MAKINSON: Great. Thanks very much, and thanks for putting all of this together as well.
The Women's Refugee Commission was set up 20 years ago in response to a sense in the humanitarian field that nobody talked to the women, and that needs that were specific to women and children were really neglected. What we try and do is change things at the level of the system.
So we're not delivering services, we're in some ways trying to tackle the kind of a problem that Mark mentioned, which is how do we get humanitarian organizations to behave differently, to deliver the kinds of services that we think women and children need. So we do this in a variety of ways -- and then I'll give a concrete illustration, maybe with firewood collection.
In the U.S. we often go by trying to alter legislation. We also try to influence U.S. government funding. So, for example, the Women's Refugee Commission was really the first to draw attention many years ago to the complete lack of reproductive health services -- family planning, HIV/AIDS programs in refugee settings.
And we went about that in a variety of ways:
Persuading the U.S. government it absolutely had to fund these services in humanitarian settings -- just the way it did in other settings, by providing training, and guidelines and manuals to humanitarian workers, where an obstacle to change was the fact that these would be new areas of work for them and they felt they didn't know how to deliver the services.
We often coordinate and found networks in trying to do this -- in trying to change the way the whole system works, either to bring together all the interested parties so that we can act in concert, much more powerful; maybe as a group, to decide on priorities so that we don't have everybody trying to do different things, and to share information.
So I'll give one concrete example -- right now the programs that we're running that focus most on technology, the issue of fuel; and we're working on maternal mortality, which I can talk about later at this time:
So you heard at the very beginning Isobel talking about the problem of firewood collection in humanitarian settings. About three years ago we tackled this because we were concerned about women and girls getting raped when they went out to collect firewood.
The problem originates -- it's one of those things where once you stop and look at it you think, 'This is crazy; how did this exist for so many years?' The World Food Program is responsible for delivering food in refugee and humanitarian settings, but nobody had responsibility for how women cooked that food -- and it's grains and beans, and food that you can't eat unless you cook it.
So for years women and girls just went out to collect firewood and roots, and were raped often. And the longer the problem went on, the further out they had to go, and the more exposed they were to danger.
So we produced the first report where we tried to pull together all the information on solutions. We knew that people had tried different things around the world, some of which had worked, but that information wasn't being shared and there was no attempt to get these solutions into standard practice.
The report got a lot of attention. And on the, sort of, "momentum effect," we managed to persuade the U.N. to set up what's called an "interagency standing committee task force." It's basically a mechanism that has the power to convene all U.N. agencies concerned with humanitarian assistance to change policy.
So you can see, you know, this is, for us, like how we -- you know, we're not going to try and raise the money to get the fuel to women themselves, how do we get the "system" to put soft law in place so that this is somebody's responsibility?
So about 18 months ago the U.N. approved guidance on the safe provision of fuel in humanitarian settings for the first time ever. The guidance is two wall charts -- one of them is over there. The wall chart we didn't hang up is on roles and responsibilities. So for the first time -- there's another wall chart that shows exactly who is responsible for doing what to solve this problem, so now we know whose feet, in a way, we can hold to the fire.
And the one over here is a set of decision trees. And I think many other people said this morning that, you know, "There isn't one solution," you know, "We wish that solar cookers were the solution everywhere." But the fact is they're going to be a major part of the solution, but they don't work everywhere for a variety of reasons.
So this chart -- you know, that emphasizes the need to work with the women too to come up with a solution, helps walk humanitarian workers through the options in their settings. You know, and in some settings it probably will be firewood, at least for awhile, so you might think about making charcoal, or having mud-brick stoves that conserve fuel, or sending out physical protection patrols.
But these charts kind of walk people through and help them see what their best options are in their setting.
COLEMAN: Katherine, maybe we can go back to you on Solar Sister, and tell us a little bit more about how you're going to take Solar Sister to scale, because we've heard about a number of different initiatives that all seem to have enormous promise, but how do you get it from today four Solar Sisters to, you know, 40,000 Solar Sisters? How is that going to happen?
LUCEY: Okay. Our biggest opportunity is that this is so needed -- light in village lives, in village homes. It has just a great benefit -- you know, to go into a village, and with a product like a solar lantern that the women and the community immediately "get" -- they understand the benefit.
You know, our need to market is really nonexistent because they -- there's the demand there for this product; and there is product there, you know, the solar lanterns are there. And so the big gap is access, and that's where we're focusing. We're focusing is access -- bringing that product out to the demand, have the supply meet the demand and close that gap.
The way that scales is, after we prove it out with the pilot, and, you know, if initial response has been overwhelmingly positive -- it's been fantastic; and then because we are -- we've organized this to be a commercial operation, a sustainable, funded -- once you fund that initial Solar Sister, she is funded for the rest of -- you know, she can grow with the capital. You know, with the money that she brings in she can roll over her inventory; she can produce an income, you know, for herself, for, you know, on and on.
The issue then is not that we're just having to, you know, reseed the lanterns over and over and over again. And so that gives us a tremendous advantage in scaling up this operation, because it is a market operation. To go from one Solar Sister to four, to 100, to 1,000, to, you know -- so that eventually the 1.6 billion people out there who don't have light have access to at least solar lamps, is going to come from Solar Sister, and I suspect from many, many others who will begin to address the access need, and, you know, it's a commercial-driven operation.
COLEMAN: Maybe this is something you and Toshi can both answer, but how do you feel about the whole issue of subsidies? You know, you're trying to create a commercial product here, and how do you feel about providing -- you know, subsidizing the initiative?
LUCEY: I hate subsidies -- (laughs) -- as far as at the ground level when you've got a product that is -- has the ability to be commercially distributed, because what subsidies do is they come in and they disrupt that market operation. And then you run into the problem like we did when we go into a village and say, we're here to help you have access to a product that you can afford; and they're so used to being given product; they're so used to being given solutions, that there's a real resistance to having to pay for it.
And subsidies -- I can absolutely understand, when you're dealing with any particular situation, you want to give that light. You know, you see a woman and she needs light, you want to give it to her. You see school children and they need light, and you want to give them all away. But what that does is it just creates this -- it creates a problem for the market solution, which is, in the long term, going to be the real solution.
NAKAMURA: So this is a question that we've been struggling every day.
So if you are very, very poor and cannot afford any of these products, you have basically three options: One is you give it for free; two, you provide some subsidy so that the people pay appropriate price; number three is microfinance.
Now, microfinance -- we are not also giving aid for free, we don't like this, sort of, "handing-out" strategy, so we only have two options. Now, the microfinance, because of the nature of their business, they tend to finance either the money-making technology or money-saving technology, and I think probably the solar light is probably money-saving technology. And then it's starting to finance the purchase of these technologies, so that's good.
Although, when I was talking today -- (inaudible) -- village people, they were saying that some of the microfinance institutions, because the solar lanterns substitute to kerosene, and kerosene was considered consumable, they didn't want to actually finance the purchase of the solar lantern. But it really varies. Some MFIs do finance it.
But there the technology that does not necessarily bring money. And an example can be this water filter, or the eyeglasses, or the hearing aid that we also have. And in these kind of, sort of, more public type of technology, I believe subsidy would make sense. And then you -- and an interesting analogy is that this discussion on the -- (inaudible.) And the question is not whether it should be sold at the full price; the debate was always been should it be -- should it be for free or with at the subsidized rate?
MAKINSON: Can I also comment, actually --
MAKINSON: -- because it's interesting, I suppose one would think of us as the ultimate, sort of, subsidized -- (laughs) -- (inaudible) -- in a way.
But I think in the humanitarian field there's increasing attention to promoting livelihoods, you know, and I think there's a huge amount of progress that we could make. I also believe in markets and I think that they're the best way to find out what customers want. I mean, we try and do that, obviously, by going asking people, 'What are your biggest problems? What do you most want us to solve?'
But, for example, after Aceh, Mary Anderson did a very interesting study about some of what had been provided by humanitarian organizations, and overwhelmingly heard from people, "Help us get jobs, because when you come and build housing for us, you don't build the kind of housing that we want."
So I think even on something like the fuel, obviously if you'd look at what's happening in Haiti at the moment, there will be a phase early on where people do need. You just come with the stuff that they need directly. But, over time, you need a strategy for how your fuel strategy is going to provide livelihoods.
Now, I know we heard earlier that sometimes when you switch strategies that will remove some people's livelihoods. But I think an important part of a fuel strategy is how that new strategy can be used to help people earn a living.
So, anyway, I'm all with you, even if that sounds --
LUCEY: And I agree with that as well, if I can put in one more comment.
LUCEY: Is that while I think the markets have to drive the market, there is so much need for support, encouragement and development of markets, and what -- and so, and that actually does get -- need to be -- and maybe "subsidy" is the right word there. But maybe if you subsidized the building of markets, and the building of industries, that helps then the market itself.
Because, it's a big gap between -- for example, with the solar lights there's a big gap between me coming into this room and saying, "Here are these solar lights," and everybody, you know, completely understands how they're going to be valuable, and how they're going to buy them, and where they're going to go, and where they're going to get the money for them; to going into a rural village in Uganda, and they may get the value of the market -- the value of the light, but there's still a lot of support needed to encourage them that, "This is how you can buy them; this is how they'll be delivered; this is how you can get them repaired." You know, there's still a lot of support there.
COLEMAN: Tell me just a little bit about how you all collaborate, because you've all mentioned other organizations -- Toshi, you were just talking about Millennium Development villages, how you think about these different organizations as partners, and, you know, I think it depends so much on those networks that you form to scale all of these things.
And so maybe just comment on that, and then we'll -- then we'll go to questions.
NAKAMURA: We at Kopernik are all for the partnership. Basically, our model is basically connecting the technology providers and the technology seekers. So the more partners we have, the more market mechanism we will have.
MAKINSON: An important part of our strategy for almost anything we do is to try and set up networks or consortia around the problem.
And I've put materials outside. So, just as an example, we coordinated the first NGO consortium in reproductive health. And it was really the power of bringing a number of organizations together. We couldn't possibly have achieved the change that we did alone. And there's a very large network now in reproductive health called the "Interagency Working Group," and there's a flyer outside.
And then, in fuel, we coordinate and host a website for the "Fuel Network" in humanitarian settings. And, again, that's supposed to connect everybody -- inventors, users, funders, as a way of sharing the information; maybe trying to promote rigorous evaluation of some things.
And we're also involved in a technology group in the humanitarian field. The idea being that there are many very useful technologies that are quite routine in development settings that haven't reached our settings.
So it's a primary way in which we do our work, to be honest.
LUCEY: And in our -- Solar Sister is very specifically focusing on access and distribution. And so our partnerships are at both ends: You know, the product development, that Mark Bent and people who have focused on, really bringing -- you know, really bringing this product to be available, affordable, and then we take it from there and make it accessible; and then on the other end, in distributing the product.
It is so important to be going into -- in with strong partners, with people who have been in those communities, are in those communities, and will be in those communities for a long, long, long time, so that that trust, and the understanding -- so that it is not, you know, 'Here I come with my great idea,' but that we are coming in in partnership with someone who's already working deeply in that community. So we work at both ends.
COLEMAN: Okay, I know we have some questions. Let's start over here.
QUESTIONER: Thanks. I'm Mark Carnesi, from Eisenhower Fellowships.
This question is for Katherine, although others might be able to speak to it.
Thinking about the issue as you bring Solar Sisters to scale, you started off by telling the story about the man with that one store, with the barbed wire and the armed guard, and I'm sure, behind those walls he as a product worth a lot more. But, you know, just doing the math, a Solar Sister with one box of a dozen of each of these lanterns has about $700 to $800 worth of product.
Have you, when you thought about bringing it to scale, factored in the security issue? I mean, as the Solar Sisters get better known, and people realize what it is that they have available for sale, and therefore in their possession, you know, how to deal with that?
LUCEY: Yeah. Well, there's a security issue because, as you say, in bulk those -- you know, a box of lanterns is quite valuable. And then there's also the security issue individually -- you know, each one of these lanterns is both valuable and very portable. And so that is something that we think about very much.
Part of the reason -- what we're doing is breaking down that value to very small segments, so that we are delivering to a woman out in, you know, a rural village, you know, two boxes of lanterns, or a box of lantern(s) at a time; working with her so that she -- what she's doing is she's working within her community so that they're effectively sold by the time she gets them and distributes them, and so she's not sitting around with a big inventory.
And that's why we are supported by the importer-distributor in Kampala -- why he likes working with us. Because, he can't effectively sell the lanterns either geographically -- get them out to where they need to be, or in an effective way, you know, he can't put a whole big inventory out in a remote area without the strong, strong local support.
COLEMAN: Can I just piggy-back on that question and ask -- Mark, you had mentioned in the earlier panel about being in Mombasa and the customs guy saying, hey, we're a long way from Nairobi -- what about corruption and how big of a problem is it for the work that you're doing?
And each of you, I'm sure, has a different perspective on it. I'd love you just to comment on that.
LUCEY: I think we probably don't run into it as much because we are at such a small scale of product, and we are not the importers. And so we're not -- we're not having to pay those duty fees. Somebody else is, so --
COLEMAN: Has already done it.
LUCEY: Yeah, if there's -- if there's corruption, and it's been factored into the cost, it's already in there, and, you know, it's -- we're not encountering it at the local level.
MAKINSON: Yeah, I mean, I think we're a bit distanced from it too.
I mean, obviously both security and corruption are a big problem in the humanitarian field. I'm trying to think whether there's any way in which our policy guidance would alter because of that, but I can't off-hand. So I think when we're promoting things that we want provided, probably this -- you know, the humanitarian field, in other ways, is thinking about those issues broadly that affect everything they do.
NAKAMURA: Yeah, we do have -- received requests at the custom(s) to pay additional to clear some of the products. But it doesn't happen all the time, but it is really one of the challenges that we have. And that's partially why we are also promoting the locally-manufacturable, more low-tech technology.
COLEMAN: And what do you do when you're asked to pay extra duties?
NAKAMURA: We haven't paid -- (laughter) -- and it's --
COLEMAN: You have not paid.
NAKAMURA: -- it's often very high, so --
NAKAMURA: -- it's just too, too much for us to pay. But it's --
COLEMAN: Yeah, sorry, in the back there. Yes.
QUESTIONER: Thanks. I'm Sharene Azimi. I'm with Fenton. We're a company that works with organizations like Women's Commission. And was the LifeStraw -- was that -- (inaudible)?
QUESTIONER: Yeah, it's a great product. And we help them get the word out.
Until today, I assumed that the same kind of tactics that we use to spread the word in the U.S. would not work in the developing world because they wouldn't have access to communications technology. But what I've heard all day is that everybody has cell phones and even Internet access. So I guess it's mostly a question for Toshi, but really for anyone.
I mean, two things: One is, what are people using the phone for? Are they using it for Mobile Web, or for games, or for texting? I mean, I would have thought that if you lived your whole life in a village, you wouldn't have that much need for a cell phone, or people going into a town to get access to the Web.
And then secondly, are there lessons from the companies, the private-sector companies that created those networks -- right, somebody had to build the cell phone towers and provide the wireless service -- are there lessons to be learned for those companies, in terms of whether it's extending the grid in the private sector for electricity, or getting products to market? Is there something that they did that helped those technologies catch on, and help people be willing to pay for them, that we could learn on the more, sort of, socially-constructive technologies?
NAKAMURA: The use of mobile phone -- So, the typical mobile phone they use is basically $20 Nokia thing. So you can either call or text. There's no Internet connection. So that's -- that basic.
Some of the example, it's still small, but the exchange market information: what kind of agriculture produce is sold, at what price. And this kind of information exchanges is beginning to happen: Google started the "Google Trader" in Uganda, which is also sort of a "Craig('s) List" for developing countries, and it's enabled through the mobile phone. So it's growing, but it's still very, very basic use.
LUCEY: In the areas where I was, which were completely remote, the two things you do see is the big red-and-white cell tower. It's amazing. And probably 80 percent of the people -- 80 of the men in the village have cell phones, about 40 percent of the women. And this is in a village that has no electricity and no hope of electricity in the next 100 years.
And we actually -- Lydia (sp), who's my Solar Sister in that village, has her cell phone and that's how she communicates. She sends a text -- you know, "I'm out of lanterns. Send number four." You know, that's how she communicates to us so that we know to renew her stock. So it's very effective, but it is -- it's texting and calling.
And the other really interesting thing -- one of the things I think we can learn from the cell phone industry gets back to the argument for distributed power. Cell phones are distributed communication. There's no land lines. You know, there's towers, but everybody's got their own personal cell phone, and I think that's very equivalent to how the solar lanterns are going to be adopted in these rural areas.
MAKINSON: We actually have a pilot that we're just planning using cell phones. We've been doing some research amongst young people -- young refugees who've been resettled to the U.S. So we've been to refugee communities here in the U.S. to ask, 'What did you get when you were a refugee, and how did that affect your ability to resettle in the U.S. successfully?' And so, obviously, we're hearing that much of the time that people spent in "limbo," in a way, was wasted.
And one of the major things we've been told is that young refugees absolutely want to have more English language training before they're resettled. And so we're planning a pilot with Nokia, actually, and with Pearson educational publishing, to see whether we can help teach young people, before they're resettled, English to reset cell phones. And we're probably going to have the first pilot on the Thai-Burma border, because that is a population where there'll be quite a bit of resettlement to the U.S.
Don't ask me anything about the technology -- (laughter) -- or how it -- what this is going to look like, but everybody seems quite excited about it.
COLEMAN: I'm sorry, Agnes (sp).
QUESTIONER: (Off mike.)
COLEMAN: Just a second. Just wait a second.
QUESTIONER: Hi. I'm wondering, how much of the $100 donation goes to the costs of the product? And just another little point is just, don't you need a name that suggests more what you do, to increase --
QUESTIONER: -- participation?
MAKINSON: Maybe that's a Fenton question -- (laughter.)
NAKAMURA: Thank you very much.
So basically, at the moment, the on-line giving marketplace, the average fee that they take out of the individual donation is about 15 percent. Kiva suggests -- you can actually have more or less, but Kiva suggests 15 percent; GlobalGiving also asks for 15 percent also -- now 17 percent maybe; and the DonorsChoose around the same fee.
We are charging 5 percent at the moment because we have companies who are selling the product. We are getting some commission for the sales. So we're combining the fee, taking some small percentage -- 5 percent from individuals, and then also some revenue share from the companies.
The name? Thank you very much. We were told many times -- (laughter) -- but I think we are sticking it to it. (Laughter.)
QUESTIONER: Well, where does it come from?
NAKAMURA: So it's a -- it's from the Copernicus. That spelling is the original Polish spelling of "Kopernik." And I've been in this very traditional development assistance business for the last 10 years, and I have -- It has a strength, but it has a weakness. And we wanted to, sort of, bring about some kind of change by bringing technologies and in directly assisting the local NGOs. So it's sort of a
"Copernican revolution" for us, in our own way.
COLEMAN: Inez (sp)?
QUESTIONER: Thanks. Inez (sp) -- (inaudible.)
Just on the mobile phone thing, you know, M-PESA in Kenya has six million users right now. And our affiliate there -- we're a network of microfinance banks, in three months has gotten 30 percent of their customers to repay their loans through M-PESA; and estimate in the next two months to have 100 percent. And approximately 20 percent of those women are also saving through the system immediately.
So I think a mobile phone is an incredible distribution channel. So I would piggy-back on the Safari.com (sic) folks, et cetera. I mean, I don't know much about this, but there's -- they're everywhere all over Kenya and they could easily be distribution channels.
On the women's side -- which I know we want to make sure that women capture value out of this, we've done a lot of research in the last few years on savings, and these "roskas," as you're describing as "merry-go-rounds." And they're ubiquitous in every country, and many of them are actually set up by women themselves to sell their own products.
So for instance, in the Dominican Republic women would go to the border -- they used to, anyway, up until recently -- go to the border of Haiti and get sheets, sets of sheets; and then come back down to Santo Domingo and set up a roska. So that women would save each week for a packet of sheets, and then once a week one woman would get those sheets.
So I think there are lessons -- plenty of lessons from the informal sector financial systems, and how to really make people -- you know, because $15 is actually not out of reach of the majority of clients, certainly, that we serve. That's a very low price point.
The other thing I think is, you know, really interesting is, you know, Grameenphone, and all these -- you know, this is -- there are massive MFIs out there that really, almost nowadays, need to prove to the world that they're of any value at all. And I think these are kind of value-additional products that would really change the lives of not just the rural poor but the urban poor, particularly in countries like Pakistan where there's lights out 22 hours a day and nobody can work, or read, or study or do anything at the moment.
So I think there's lots of lessons from both the MFI land and also the phone land to distribute.
COLEMAN: Inez (sp), what is the impact on cost of now paying your microloan through the cell phone? I mean, are you seeing -- I mean, the big potential is that it's going to drive down costs, which we know are quite high in the microfinance fix.
QUESTIONER: Yeah, I mean, it's enormously huge potential, because there's -- Microfinance is a high transaction cost model for the customer. And that's why, if you look at, let's say, a typical Grameen replicator, the fact that you're meeting for an hour-and-a-half once a week -- and often those meetings are actually three hours long because one woman can't pay, or her husband didn't pay her to pay the loan -- so these women are spending three hours a week doing one transaction. And in many of these markets now we see women in three or four MFIs, if not five or six.
So the transaction costs of doing business are considerable. Then you take that to rural Africa where, you know, it's really -- So, reducing the transaction costs for women, and then what Kenya womens has done is negotiated with M-PESA to reduce the cost per transaction, per (SMS ?). They've about halved it. So I think as the -- as you aggregate the buying power of these customers, you can negotiate and reduce those costs.
LUCEY: And that's part of what we'll be doing -- as you talked about scaling up Solar Sister, because of the mobile payments. You know, Solar Sister couldn't have existed a few years ago, but now, because we can text, you know, our Solar Sister can text us, 'I need a box,' or 'I need five of these lanterns,' and we can deliver it. And we can -- she can also text us the payment when she gets it from her, from her community.
So the logistics of having these "micro sales" all over a widely distributed country, or, you know, continent, hopefully one day, just wouldn't be possible. But now it's starting to be because we can do all so much with texting.
COLEMAN: Linda (sp)?
QUESTIONER: This is a question for Toshi.
I think your idea of "crowd funding" technology for the poor is just extraordinary. I'm wondering, is there a way that you could crowd-fund not the direct sale of the whole thing, but a way almost to combine what Lucey's doing? So that you were crowd-funding a startup operation, you were crowd-funding a business, because I think that people would be very interested in doing that -- instead of just a one-time giving, but you were crowd-funding entrepreneurship?
NAKAMURA: Absolutely. Thank you.
So we're starting with a grand model, but those technologies which have a potential of money-making, or significant money saving, as I briefly mentioned, we are going to introduce this ("loan line" ?). So it is, I think, a good opportunity for us to collaborate.
LUCEY: Yeah. (Laughter.) If you want to crowd-fund a Solar Sister, that'd be great.
QUESTIONER: (Off mike.)
LUCEY: (Laughs.) Okay, we're done.
COLEMAN: Right here.
QUESTIONER: Lester Wigler, Morgan Stanley.
I don't know if you have enough experience yet to answer this question, but I'm interested in whether or not the governments where you're active have given any indication of using your capabilities for social engineering, specifically saying, 'Well, we favor this particular community, and we're the political power, so therefore you owe us something.' Have you seen anything along those lines manifest itself yet?
LUCEY: Before I started Solar Sister I was with an organization that put solar -- larger-scale solar in communities, a faith-based organization that was really not -- you know, just a tiny organization, but worked extensively for the last 10 years in Africa. And, you're right, as soon as you begin to be successful, and because you do need relationships within governments to, you know, to bring in solar panels and to, you know, make the whole operation grow smoothly, indeed, you do start to get, you know, 'My cousin lives in this village,' kind of pressure.
And, you know, it's -- it happens. You know, I haven't seen it yet. Of course, I'm just started up. And I suspect that I'm such a -- you know, Solar Sister is such a "micro" thing -- individually, it might be more difficult to exert pressure on it. But we'll see.
NAKAMURA: Not yet. And we're having a large technology fair in East Timor in May, and this is in conjunction with the government of Timor Leste, and NGOs. And they are now, at the moment, simply fascinated by the choice that there is on the various technologies and they just want to see what's available.
QUESTIONER: (Off mike.)
LUCEY: And I also think that by going a commercial route you avoid that a bit. You know, I'm not showing up with a lot of value product, giving it away.
MAKINSON: And governments are obviously critical to everything in either direction. For example, one innovative project was with big parabolic solar cookers for Bhutanese refugees in Nepal, where the Nepali government right from the beginning had adopted a policy that they didn't want the refugees stealing their forest products. And so, in fact, that was the setting that hosted a number of, sort of, innovative projects.
But I gather, from my staff, that the Thai-Burma one that the -- the ministry that's responsible for the refugees on the Thai-Burma border is quite nervous about our cell phone project. But Pearson has very good contacts with the ministry of education, and so we're hoping maybe they can have some sort of intra-ministerial chats about this. But obviously the government is -- the host government is always critical, either positive or negative, in everything that we do.
QUESTIONER: Richenda Van Leeuwen.
Just on the point of crowd funding. In fact, Fonkoze, which is the largest microfinance institution in Haiti, has just released a new project, a new organization called "Zafen," which is specifically encouraged -- using a Kiva-like platform, getting the Haitian diaspora, particularly, but not just the Haitian diaspora, in fact, to use that Web platform as a way to fund small startups in Haiti; and more specifically right now to recapitalize existing businesses that were affected by the earthquake. So it's a fantastic mechanism in order to provide these sorts of Angel and ongoing capital that small businesses struggle to get in a lot of developing countries.
My question, however, is sort of based on that. Have you thought about the use of remittances, particularly in this market?
And Carolyn, to your point, what about remittances from resettled refugees who can then get these products back into their home communities?
NAKAMURA: Yes, it's a very good point. We haven't done any particular PR outreach for the diaspora people, but that's something we should definitely consider. Thank you for that good point.
MAKINSON: Yes, totally agree on remittances. We've published the first "Livelihoods" manual for the humanitarian field, and one of the chapters in it is on leveraging remittances. So, completely agree with that point.
I mean, there's actually more of an economy in refugee settings than people realize if they're not familiar with them. I mean, some refugee camps are like urban settings in a way. So every refugee setting does have an economy.
LUCEY: I'm not really working with refugees in particular, although we could, but we're not at this point.
QUESTIONER: (Off mike.) Can I ask a really basic question? What's the difference between -- (inaudible)?
LUCEY: It's stylistically, mostly. You mean a solar lantern?
QUESTIONER: (Off mike.) Yes.
LUCEY: Okay, because the lanterns that we're replacing, the "tadoobas," which look like a tuna fish can with a wick stuck in it, that they burn -- that they're burning kerosene out of. Those are what we're replacing. And then the solar lanterns that we're bringing in, this style -- Mark's style, is more of a torch style. It's more of a flashlight.
Other ones look more traditional, like a kerosene lantern. And we heard a little bit about why you might not want to do that, but one of the advantages of them, it's an easier transition. Visually and culturally, they, you know, they "get" this replaces this. Other ones are also more modern looking. And so there are different styles, I guess.
And some of them have different advantages. Some you can set on a table. Some you can -- all of them, I think, at this point, you can hang in some fashion from a ceiling. You know, the torch style is a very appealing style for walking around with. So it's just stylistic.
COLEMAN: The cost of -- I think your -- the product is being sold, the less expensive one, I think you said, is $15? Is that right? Is that what the Solar Sister is selling it for?
COLEMAN: And how much are you subsidizing that cost, in effect -- to get it from the guy behind the barbed wire in Kampala to the Solar Sister? I mean, what -- is that another $2 or $1, or $5 dollars, what?
LUCEY: When we're at some scale, that will be an easier thing to -- you know, right now it's, you know, for --
COLEMAN: It's everything. (Laughs.)
LUCEY: It's everything -- (laughs) -- you know, to go over -- you know, to fly over there and to --
COLEMAN: Right, right.
LUCEY: -- set it all up, you know, in a pilot project.
COLEMAN: Right, but --
LUCEY: The whole pilot setup is a much more --
COLEMAN: -- what do you -- what do you anticipate it will be eventually?
LUCEY: It will be about $3 --
LUCEY: -- per product to support --
LUCEY: -- the ongoing --
QUESTIONER: This question is for Katherine.
I'm just curious of what you've seen, or what you anticipate the male reaction to be to these Solar Sisters. I mean, do they want to be Solar Brothers, or? (Laughter.)
LUCEY: The reason I created it to be "Solar Sister" came from my experience working in Africa, and realizing that as we came in to -- with solar technology -- and the emphasis was very much on technology, you know, you show up with solar panels, and batteries, and wires, and, you know, you've got people involved in doing all this, it was always the men of the village who would come around and, you know, get their hands on it, and tell us where they wanted to put the solar.
And the women would be nowhere. They would be out behind the houses cooking our lunch, and they didn't participate. They didn't show up until we left. But the utility of the light really benefits the women. It's the women who educate the children. It's the women who are cooking in the dark kitchens. You know, it's the women who benefit.
And when you come down to this solar lantern, the key thing is taking it -- instead of thinking of it as technology, it's utility. It is a light. And so it's a household appliance. And so now we're coming in and instead of saying, oh, we're bringing in this cool technology, we're saying, we're bringing a lamp that replaces that lamp.
Well, that's a lot less interesting for the men to get involved with, because the women are the ones who buy the kerosene, fill the lamps, trim the wicks, you know, fetch the wood, and do everything. That's all household stuff. And so what -- Solar Sister's coming in to talk to them about appliances basically.
And it's very purposely created to be Solar Sister. And we're actually working with a group called the "Mothers Union," so we're all girly, you know -- (laughter) -- and to work with the women, because unless -- without being very deliberate about reaching the women, they were not in the picture at all.
Even going into the villages, you know, as much emphasis as we put on that, you know, the whole village comes to see what's going on. And, you know, the minute we pulled out the lamp that had the phone charger, it was the men who crowed around -- (laughs) -- and wanted to get their hands on it and everything. So we still have to be very deliberate about creating that space for the women, because it's really hard to do when you're dealing with technology.
But the men were incredibly supportive of somebody in their village having the access to this product that they wanted very much. And so they were -- they were very supportive.
COLEMAN: Last questions.
Can I just ask a last question of each of you around the cultural challenge? I mean, you were just talking, Katherine, of why you use a lantern instead of a -- more of a torch. Mark had told us earlier that there's some real benefits to using a torch as opposed to a lantern.
I mean, it is women -- as you just described, who are the ones who are dealing with the candles, or the kerosene, or whatever, but when you bring a new technology in like this, do they immediately understand, 'Oh, this replaces that?'
Or whether it's solar cookers, Carolyn? I mean, I think you've told me some stories in the past of a real resistance to using it because it doesn't cook it exactly the way -- there are enormous benefits to doing it in a new way, but the old way is what's familiar, and they're used to the taste, they're used to the process. I'm just curious, on the cultural side, of how much of a challenge that is.
LUCEY: With the light, the benefits are very, very evident to people who live in villages who use kerosene -- who get the smoke in their eyes, who know that their lungs are black, who know that it's expensive to buy kerosene, who have had their children burned because the kerosene has spilled, you know, who had had their thatched roofs catch on fire. They "get it." And so there's not a -- there's not a difficult sell about that.
COLEMAN: Yeah, there's no love for kerosene.
COLEMAN: Yeah, okay.
LUCEY: So that's not a difficult sell.
And then having the different varieties of product gives them the chance to make their choices based on whatever cultural issues; or, you know, they want to put it on the table, they want to hang it up, they want to carry it. You know, they get to make their choices. So we're not dictating to them which one. You know, they get to choose.
MAKINSON: I suppose there's no easy answer to that. I would say, process-wise, that's why we think it's so important to involve the women themselves. I mean, I think we all know if you want to persuade people to change, if they're part of finding the solution they're much more likely to adopt it. And we do all change.
I mean, having said that, when I was working in Guinea once I was so struck by the fact that the Liberians wanted rice. I mean, maybe I saw, with a sort of power I'd never felt before, the sort of attachment to your staple. You know, so there are things in life that are so ingrained, I think they're sort of almost nonnegotiable.
So when it's cooking, I think if there are ways that one can alter food preparation sometimes that can make different technologies possible. But there would probably be a limit. I mean, maybe the end product's got to look like what you're used to.
NAKAMURA: For us, we are trying to address in three ways: So first one is that because we have a lot of product, if they choose what they want to use -- the NGOs, then they are more ready to accept that product in a particular community, that's one.
And number two is that these NGOs that we work with will provide awareness-raising training. They just don't just simply distribute. So they combine with that kind of education program.
And thirdly, even all after this, if the end consumer do not like that, they will actually tell us, and they will provide feedback on the product, and we put that on the website.
COLEMAN: All three.
So thank you all for joining us here this morning.
There is lunch for those of you who can stay and continue. Our panelists will be joining us for the hour, and you can ask them some more informal questions.
On behalf of all of the panelists here today, let me thank you all for participating. This has been very, very interesting and we really appreciate you sharing our time. So, thank you. (Applause.)
(C) COPYRIGHT 2010, FEDERAL NEWS SERVICE, INC., 1000 VERMONT AVE.
NW; 5TH FLOOR; WASHINGTON, DC - 20005, USA. ALL RIGHTS RESERVED. ANY REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION IS EXPRESSLY PROHIBITED.
UNAUTHORIZED REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION CONSTITUTES A MISAPPROPRIATION UNDER APPLICABLE UNFAIR COMPETITION LAW, AND FEDERAL NEWS SERVICE, INC. RESERVES THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO IT IN RESPECT TO SUCH MISAPPROPRIATION.
FEDERAL NEWS SERVICE, INC. IS A PRIVATE FIRM AND IS NOT AFFILIATED WITH THE FEDERAL GOVERNMENT. NO COPYRIGHT IS CLAIMED AS TO ANY PART OF THE ORIGINAL WORK PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS PART OF THAT PERSON'S OFFICIAL DUTIES.
FOR INFORMATION ON SUBSCRIBING TO FNS, PLEASE CALL CARINA NYBERG AT 202-347-1400.
THIS IS A RUSH TRANSCRIPT.