Project Everest

Work Update

[Work Update]: Fuel Fiji - Social Consulting Collaboration - July 2018

The Fuel II and Social Consulting I teams in Fiji are planning to collaborate in terms of the sale of stoves within villages.

It has been noted that the price of the Buka stove, $60, is quite an expense to many villagers and often they are unable to make a full payment when purchasing the product.  Due to limited resources within Fuel II, the only payment options to date have either been a single full payment, or a deposit made with the remainder paid on the arrival of the Buka stove.  This, unfortunately is still very limiting in terms of the demographics which the stoves are currently available to.

One of the major goals of SoCon I this month is to assess the viability of a micro-financing system within rural areas.  At present, SoCon I are collecting as much data as possible to try build a profile data base in order to establish an extensive risk assessment and loan structure.  Thus, before the provision of long term loans, more information is needed regarding the provision, monitoring and collection that will be the most successful in the Fiji market.

The obstacle within Fuel II and the goal of SoCon I match up very well to the benefit of both teams.  A three-tier system has been devised and will be tested in future sales of the Buka stove.  The proposed systems are as follows:

  1. A single Full payment of $60
  2. A three-week payment plan with an interest rate of 13% making total cost $67.80
  3. If payments within this plan are made on time, the interest rate drops to 8% leading to a new total cost of $64.80

The way these payments can be split up has some leeway, depending on the amount of the initial payment the customer can contribute, but for example it could be broken into $20, $20, $24.80.  For customers without mPaisa (mobile money), these plans are limited to three weeks due to the lack of a local agent and PEV between the months of July and December. However, from SoCon’s initial data collection many Fijians either have mPaisa or are willing to create an account for a loan.  

It is thought that by implementing this system there will be two main benefits.

  • This should benefit Fuel II as the stove should become more accessible to a greater number of people.  Also Fuel II will not have to spend as much time collecting money as SoCon I can take care of collection of all payments after initial payment.
  • SoCon I will be able to collect some initial data on the opinions of villagers on loans and their ability to stick to them as the contracts specify, i.e. will they default or not. This will allow them to understand what risk factors play into paying back a loan and what loan structure would be the most successful.

A shared goal of both teams is the hope of being able to transition to long-term payment plans which will not require a PEV employee in country at all time.  This move will prove to be a stepping stone to this goal through educating locals of how loans work in parallel to researching methods and models that could make long-term micro financing possible.

edited on 6th September 2018, 00:09 by Justin Hakeem

Alexander Teicher Jul 12, 2018

Keethu here is a good summary from Luke on our work with the wonderful SoCon people

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Cris Birzer Jul 13, 2018

I'm still surprised at the sale price, especially when it is compared with other stoves shown in the GACC / clean cookstoves database/webpage.

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Alexander Teicher Jul 13, 2018

Hi Cris,
I completely understand this, and as per our conversations pre-country I felt very much the same way about the price. After my first few village visits, my view on this has changed significantly. After seeing the reactions from people when they are told the price for the first time and they find it very reasonable indeed.

With our new prototype (that I have been meaning to email you about and will do today) that is currently being made we will look at doing some currency testing to gauge an appropriate price point for that model, and gauge feedback from customers regarding what they see the value being.

Compared to other stoves on the database a common price point is around 25-30 USD which is around 60 FJD for the Buka Stove depending on conversions. Due to the fact that we are very early in production and not producing on scale we anticipate that we can lower this price in the near future.

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Justin Hakeem Aug 16, 2018

Status label added: Work Update

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