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Access to Finance for Electricity in Kenya
A USAID Development Credit Authority (DCA) GeoPoll case study

Background

Businesses and entrepreneurs in developing countries often struggle to access the financing they need to expand. The United States Agency for International Developmentā€™s (USAID) Development Credit Authority (DCA) works to address this by providing partial credit guarantees to local financial institutions in developing countries to encourage lending to underserved sectors and borrowers. To find out which countries and sectors are in the greatest need of financing, DCA needs information from people and businesses often in regions where conducting surveys can be extremely slow and expensive.

Solution

By partnering with GeoPoll, DCA is able to use mobile surveys to learn more about which sectors, geographic locations, and borrower groups may be facing a data-demonstrated financing gap. In the second stage of an ongoing collaboration with GeoPoll, DCA wanted to explore the ability of Kenyans to finance the costs associated with connecting to the electric grid. In May 2015, GeoPoll administered 3,200 mobile phone surveys across all provinces in Kenya. The results indicate there is a gap in financing for access to electricity. USAID is using this information to inform potential programs to address this market failure.

Results

The survey found that the majority of Kenyans do not have electricity in their homes, with the highest proportion of individuals without electricity residing in the Western and Eastern Provinces. Of the 80% of respondents who cited cost as reason for not obtaining electricity, 91% cited up-front installation costs, specifically, as a barrier to access. Additional results from the survey demonstrate that there is a demand for debt financing to support access to electricity installation.

With this information, USAID can more strategically and confidently design projects in the energy sector in Kenya. More results can be seen in the below infographic (click here for full infographic), or you can download the dataset including raw data and pivot tables.

Kenyan Electricity Infographic

Key Points

  • USAID DCA provides partial credit guarantees to encourage local financing in developing countries. More data on financing needs among potential borrowers helps DCA more strategically target its efforts
  • A Geopoll survey conducted in Kenya in May 2015 identified a significant gap in financing for access to electricity for many Kenyans.
  • USAID now has more information to better address this financing gap in Kenya.

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