1. Choose a project
You will be lending money to one of the solar businesses working with Energise Africa. These businesses sell small solar systems to families throughout Sub-Saharan Africa. You will need to consider the return you are expected to receive, the time taken for your money to be repaid, and the risk of investing in the solar business.
We select our businesses very carefully. We do a full credit risk assessment, with the support of INRISC – a provider of tools to measure and monitor credit risk. Some projects will have a first loss provision meaning that if the business cannot repay, for example in the case of bankruptcy, these funds will be used to underwrite part of your loss. In addition, other projects may also have match funding available provided by UK aid and Virgin Unite which will help to amplify the impact of your investment on the ground. Projects that benefit from match funding and / or first loss provision will be clearly indicated.
The solar businesses cover the risk of any currency fluctuations. Energise Africa has a small fund that can be used by the business to offset up to 20% of any currency loss. Over time, this fund is to be topped up by the solar companies with 10% of their payments going directly to the FX reserve. This ensures a sustainable approach to covering risks for investors
2. Lend Money
You can invest as little as £50, alongside the crowd. You can pay immediately online or later by bank transfer. You can see the status of your investment in your account and you can add more to your investment at any time. If you are providing more than one investment, it is advisable to reduce your risk by spreading your money across different businesses.
Once the project is fully funded, the money is transferred to the solar business on the first day of the following month - your interest starts building from this date.
3. Create new opportunities for African families
The solar business uses your investment to purchase solar home systems and then proceed to sell these systems to African families with a financing plan. The families make monthly payments using credit on their mobile phone, while the business maintains the system and is able to switch it off remotely if payments are not made. After 12 to 24 months, the family usually owns the system outright. The money they save in fuel costs can be used for other things.
4. Get your money back
Every six months, you will receive both interest and a capital repayment from your chosen business. You can view these payments in your account. The solar business makes a repayment with interest. You can ask for these funds to be repaid to you, or you can reinvest them in a new project. Please remember your capital is at risk and repayments are not guaranteed.