The stakes of digital revolution is a vector for development in rural areas. Thus, Togo’s government believes that for the country to prosper, development has to start in the rural areas. The PayAsYouGo model is the solution.
According to Minister of Posts and Digital Economy of Togo, Madam Cina Lawson, to reduce poverty in sub-Saharan Africa, it is necessary to make growth inclusive. To achieve inclusive growth, development has to reach the rural areas. Financing solar kits in rural areas is top priority.
However, she believes that it is possible to massively equip rural areas through PayAsYouGo (PAYG). This will depend on the popularization of mobile, technological developments and the emergence of innovative business models.
PayAsYouGo funding is a model that relies on mobile payment and can provide individuals with payment over time. The aim is to provide rural areas with water, electricity, television sets or insurance products, just to name a few.
By offering people the possibility of having a solar system through a step-by-step payment system via mobile money, PayAsYouGo has an edge over the traditional microfinance model. The need for collateral when necessary and the risk of non-payment are covered by the possibilities that stakeholders have to secure their financed assets in case of non-payment due to remote functionalities.
The PayAsYouGo business model is mostly used by solar kit companies in East Africa. It is one of the most used means to mobilize private funding for equipping and developing rural areas.
The reason is obvious.
Development aid and public capital alone cannot completely develop rural areas. Hence, the Togolese government will need to create a friendly environment and provide good infrastructure needed for this type of financing of equipment for its rural populations.
With support from Togo’s technical and financial partners, Togo has set up a national PAYG financing platform, ‘ToGoPay’. Thus making the platform the digital backbone of the model ‘PayAsYouGo’ in Togo. It will encourage different private actors to offer equipment and services for the rural populations. Through this platform, it will be possible for Togo to provide sustainable access to drinking water and electricity. This can be, thanks to good infrastructure management. Also, the rural populations will be provided with smartphones or even computers and also financial products such as insurance.
Making use of the electrification scheme in rural areas
The ToGoPay platform is open and accessible to private actors who wish to offer products and services to the rural areas. The platform will enable remote monitoring of home systems and also have access to just one single point to the credit history of rural populations. It will also secure users’ payments via ’Mobile Money’.
The first area of application for the ToGoPay platform is that of rural electrification. President Faure Gnassingbé of Togo initiated the electrification scheme launched in December 2017 under.
Nicknamed ‘CIZO’ (“lighting up” in the Guin language), the scheme was to significantly increase the electrification rate in rural areas by 2022 through the use of solar home systems. Thus, about 2 million Togolese in the next 5 years will have quality electricity available and at a lower cost. The rate of rural electrification will increase from 6% to more than 40%.
Increased productivity with the ‘PayAsYouGo’ model
This system is the main engine for the entire development strategy for rural areas. The solar kits (machine-to-machine technology) will collect valuable data. Moreover, it will also promote the development of other products and services in the rural areas.
According to the Minister, a solar kit in a rural home gives access to modern farming equipment (solar irrigation kits and even small farm tractors). This will help increase productivity, thus generating income.
Meanwhile, Togo plans to put in place equipment and services that can be delivered at a single point. This will ease funding by public and private capital. Thus, making it possible to sustainably improve living conditions. Thanks to the ToGoPay platform.EN FR