Different ways to finance social programs

Kopernik does not distribute the technologies for free, but rather it balances a philanthropic and business approach. Donors fund the upfront costs of introducing technologies and creating micro-business opportunities in remote communities. The money raised from product sales is reinvested in more technology for the last mile.

I like Kopernik's hybrid philanthropy-business model because it is attractive both for the most marginalized people and for donors. On the one hand, the fact that the poor are not beneficiaries receiving help, but rather clients that work together with Kopernik to improve their lifes, empowers them instead of creating dependency. On the other hand, this model attracts donors that are willing to invest in the social change and want their contributions to be a sustainable way to improve incomes and livelihoods permanently.

In this context, and in order to understand whether or not  there was a need and a demand for the improved cookstoves and, if so, where, we went to 32 villages and we interviewed 337 families in remote communities. We asked them more than 30 questions but the most important one was, “Would you buy this biomass cookstove at its current price?". We asked this question after showing the product and explaining its benefits.

Based on this question, we looked at people’s willingness to buy by village. As you can see, there is a lot of diversity within areas. While there are villages where no one wants to buy, such as Boentuka in Soe, there are other villages, also in Soe, in which there is a lot of interest. For example, in Oebobo, one out of every two families wants to buy the cookstove.

And here comes the most interesting finding. We asked all the people that did not want to buy the cookstove whether or not they would buy the product if it could be paid in installments.  As you may see, when allowed to pay in installment, the willingness to buy increases significantly, from 21 per cent to 80 per cent.

This result makes me think that we should analyze in depth different ways to finance social programs. It sounds great that poor families can buy new technologies that generate financial benefits for them. However, because there are liquidity constraints, flexible payment should be allowed to ensure that even the poorest can access these technologies.