SIMA Angaza Distributor Finance Fund
A data-driven investment fund providing access to debt capital for clean energy distributors in developing markets.
Leveraging Angaza’s Data-Rich PAYG Software with SIMA’s Investment Expertise
With permission from interested Angaza distributors, the DFF combines SIMA’s underwriting technique with data from the Angaza Hub to assess eligibility for funding, reduce the duration and complexity of due diligence, and monitor and report on loans.
Closing the Financing Gap for High Potential Distributors
While investments in the off-grid sector increased by 20% from 2017 to 2018, the growth rate falls short of meeting the $5.7 billion needed until 2022 to sufficiently accelerate the sector. This dearth of funding especially impacts distributors selling life-changing products on a pay-as-you-go basis. These distributors need capital to fill the cash flow gap they experience by virtue of receiving installment payments over time instead of the full price of the product at the point of sale.
By providing debt capital to traditionally overlooked distributors, the data-driven DFF accelerates the growth of the off-grid energy sector while increasing access to life-changing products for families across developing countries.
Gender Lens Investing
As part of our core business of investing in innovative companies that align their business model with social goals for improving the lives of low-income customers, SIMA is, for the first time, applying a gender lens to investments under the new SIMA Angaza Distributor Financing Fund (DFF). We believe that we have both a role and a responsibility to reduce the global gender gap and we are well positioned to promote and influence a more gender equitable off-grid energy distribution sector.
We aim to advance gender equality, not only in terms of increasing women’s participation in a traditionally male dominated sector, but also in the ways in which our investments impact the lives of women. Alongside targeting gender equality as an objective in relation to social impact, we are also compelled by the business case for gender equality. The evidence indicates that advancing gender equality is not only the right thing to do but the smart thing to do. It leads to greater profits and reduced risks. We know for example, that companies with a greater balance of men and women in leadership positions perform better. We also recognize that where our investees deliberately tap into the female customer base, the data shows that sales (and ultimately profits and growth) are likely to increase.
Implementing Gender-Inclusive Best Practices
Supported by Power Africa, a U.S. Government-led partnership, we have developed our gender lens approach which includes a framework for deal screening; underwriting; and monitoring and evaluation; as well as a technical assistance offering towards adopting and implementing gender-inclusive best practices. We have developed a detailed set of screening questions to help our investees better identify how their sustainability and longevity are inextricably tied to a strategy premised on gender inclusion.
As part of our underwriting process, we ask companies to conduct a self-assessment which provides an initial baseline for evaluating the status quo across a range of indicators. Thereafter, we work with them to develop a gender-inclusion strategy to provide guidance over the next several years of investment. Progress on the strategy will be monitored annually. Insights extracted over the course of operations will be documented and leveraged for improved performance.
SIMA’s goal is that all DFF investees will, by the end of the fund life, have at a minimum:
- A gender action plan with senior leadership buy-in;
- Thirty percent women in leadership;
- Forty percent women in the workforce overall, with 25% women in technical positions;
- Gender equitable workplace policies including with respect to: sexual harassment, parental leave, flexible work, equal compensation, equal opportunity, and non-discrimination;
- A pay gap audit report including measures to rectify a pay gap, where it exists; and
- Sex-disaggregated data that informs decision making in all areas of operations, including in relation to recruitment; workplace practices; product development and offerings; and sales and marketing.
Also, to better understand our social impact in relation to gender equality, we are interested in measuring and demonstrating the impact of our investments on women energy end users. With the support of Power Africa, and in partnership with 60 Decibels , we will provide customer, impact, and business insights for the DFF’s first three investee companies. The work will explore who is being served, their feedback on the product/service, and what they value most about the product/service, focusing particularly on collecting data to provide insights into gender-inclusiveness. SIMA will then leverage these gender-inclusive insights to support improved distributor performance and contribute to the business case and thought leadership around gender lens investing in the off-grid energy sector.
The Global Distributors Collective’s first-of-a-kind report highlights the DFF and the vital role of these distributors in creating markets for beneficial products and effectively reaching last mile customers. It contains a wealth of new data and insights and provides tangible recommendations for stakeholders on how to engage with and support the sector.