How does your proposed innovation leverage public intervention in catalyzing private SME finance?
Efficient cook stoves, biogas digesters, water filters, and other household energy devices provide compelling development benefits while also reducing GHG emissions. E+Co specializes in linking entrepreneurs in these sectors with public funds and business development support, but access to capital is still a barrier to scale. In the past decade carbon finance has emerged as an important new source of revenue. We hope to use an initial public investment, and lessons learned from an ongoing pilot, to build mobile tools for increasing SME access to carbon finance.
Generating saleable emission offsets involves complex, detailed monitoring that can be prohibitive for all but the most organized and well-funded organizations. Typical monitoring tasks include sales records, follow-up surveys with customers, and measuring product use and performance in the home with electronic equipment. For many small businesses the cost and complexity of carbon project monitoring are insurmountable barriers to entry.
New technologies including mobile devices, sensors, and database-driven web applications have the potential to streamline data collection at the point of sale and in the field, making carbon finance and other private investment more accessible. We propose to build on open source, field-proven hardware and software to create an integrated platform for data collection, monitoring and reporting.
Starting from software being piloted in Tanzania, we will develop a suite of tools that is robust, scalable, and easy to use. It will be designed for SMEs seeking carbon finance but suitable for a wide variety of businesses offering products to end users. The platform will support data collection at the point of sale and in the home, and allow web-based reporting and data analysis. Sales records and other information will be available to business owners and investors in real time over the web, with different levels of access as appropriate.
Even for businesses not pursuing carbon finance, effective record keeping is a prerequisite for accessing private capital. Potential investors need to see evidence of strong sales, a reliable supply chain, and financial stability before committing resources to an entrepreneur in the developing world. Entrepreneurs also need records for marketing purposes and, where applicable, to follow up with customers for routine maintenance. The software being built will help address these information management needs.
If you checked any of these barriers, describe how your solution addresses them
-Asymmetry of information:
SMEs that sell products to end users need accurate, timely information about their sales and supply chain to manage their businesses effectively. Without this information small businesses are unable to present themselves effectively to potential lenders, and entrepreneurs lack the data needed to efficiently assess the performance of their sales outlets and retail staff. The proposed platform will help business owners manage information more effectively, and make it easier for investors to assess the viability of SMEs.
-Lack of SME access to skills/knowledge/markets:
Many small businesses in the developing world do not maintain sales records, and those that do typically use notebooks and paper forms. The problem is compounded when SMEs operate in multiple regions or rural areas where tracking sales and stock is inherently difficult. This is often the case in the context of carbon finance project development. Data collected using mobile devices can be made available in real time over the web, allowing SME owners and investors to monitor business performance even when operations are remote or geographically dispersed.
For small businesses working to access capital though global carbon markets, point of sale data collection and ongoing monitoring are among the most costly, time consuming aspects of the process. By streamlining data collection using mobile technology and the web, more and smaller businesses will be able to access this source of revenue.
There are many robust, open source software packages for field-based data collection, but no tool can fully meet the needs of most SMEs off the shelf. Many businesses that could benefit from improved data management lack the time, funding, and technical experience necessary to customize software for their specific use case. They need a flexible, readily deployable tool that is designed with carbon finance record keeping in mind. The software will provide a standard approach to tracking end user information and key business indicators, providing entrepreneurs who are not used to collecting this information with a structured and well supported approach.