The second venture on our platform that is currently looking for funding is Jiro-Ve from Madagascar. We contacted Dutch entrepreneur Rik Stamhuis to learn more about his business. “Now that we have proven that our model works we would like to further scale up our franchise model, grow customer numbers and automate payments methods.”
Please introduce Jiro-Ve to us?
“For the 92% of the population in Madagascar with little purchase power and no access to electricity, Jiro-Ve provides renewable energy, which is accessible and affordable, by offering a light which is cleaner, safer and cheaper compared to the candles and kerosene currently used. Operational since 2012, Jiro-Ve has developed an innovative franchise business model that presently serves 1500 consumers in Madagascar.”
Can you describe the business model you are working on?
“Most rural families in Madagascar use expensive and dangerous kerosene lamps or candles for lighting. Jiro-Ve offers them superior electrical lighting. Every evening, a charged-up lamp is delivered to a family’s doorstep by a local franchisee. This light rents for less than consumers spend on candles and kerosene. In the morning, the lamps are again collected and charged up using either solar power or grid. This makes our service extremely accessible because our franchise model fits into the current distribution chain for candles and kerosene. Thus we disrupt this industry without causing local job loss.
We believe in working with micro-entrepreneurs that have managed to successfully set up their own shop/business and help them to improve. These people are the backbone of the economy and have proven to have the right spirit. We offer them a change to improve their business skills by becoming our franchisee and benefit of the advantages like additional revenue and a increase in customers that our already proven model provides.
The advantage of our service versus people that have to charge their own light is that we don’t require any change of behaviour of the people using our service versus the candles they used to use. We offer our lights for the same price as a candle and people collect it of the same place.
We ensure fully charged lights even during the rainy season because we charge all our lights at a central place with a professional solar-system. Therefore we eliminate the need for technical knowledge about the solar-system. Therefore we can guarantee that each single member of our service has a light that works. And last but not least we collect used lights and ensure they don’t end up in the environment.”
You are currently looking for funding, how will you use the investment when it comes in?
“Jiro-Ve achieved near break-even towards the end of 2013 with limited resources. Now that we have proven that our model works we would like to further scale up our franchise model, grow customer numbers and automate payments methods. Due to this investment we will be able to generate more revenues that we can re-invest in the business, which will turn the investment into a revolving fund.”
What are your main challenges of operating in the market where you are active? And how do you see the IBA community playing a role to support you?
“Our main challenges are to access funds because Madagascar is not to well known to most investors despite the great opportunities this untapped market is offering. A political crisis has come to an end at the beginning of last year and with an official government in place many organisations and governments are currently looking into investing in Madagascar. The country provides a huge untapped market of about 20 million people that spend 420 million Euro annually on candles and kerosene. If as an investor you really want to make a difference within the BOP market then Madagascar should be one of your first countries of choice with over 92% of the population living on less then 2$ a day.
We hope that through the IBA community we can showcase our success and attract potential investors that would be willing to support us in our mission.”
What is the main lesson you can share with the IBA community about doing business with the Base of the Pyramid?
“There are three main lessons: You need to start small and very carefully listen to the people you are trying to serve. Balance out your team with both expats and local people to ensure you get the best of both worlds. And don’t give up, even if you are challenged in every single way possible.”
What are your plans for the future?
“For 2015 we want to reach 19,500 beneficiaries; create 76 jobs and prevent 1,4 million candles from being burned. We have some exciting partnerships lined up and we are looking forward to further build our network with them. We look forward of all the good things we are sure will come of being part of the IBA community and are keen to share our experience with other people that want to do good as well.”