“Investing in women is smart business and key to poverty alleviation at scale,” says Ajaita Shah, Founder and CEO of Frontier Markets, a rural marketing, sales, and service distribution company providing access to affordable and quality clean energy solutions and appliances to low-income households in India by building a network of rural entrepreneurs.
An advocate for women-led, transformational leadership and rethinking how market based approaches and social innovation organisations can better design for scalable impact, Ajaita has been a leader in driving socially conscious business models through partnerships, and pushing ‘bottom up leadership’, keeping the rural consumer in mind. She has committed to empowering rural women across the developing world through market based business models, clean energy, technology, and inspiring women to push themselves beyond their societal boundaries.
We talked to Ajaita about the challenges of bringing clean electricity to rural India, why it is essential to work with the local population, and the importance of investing in women as a key to poverty alleviation and change.
“If I learned anything from my time in microfinance it was that if you give women the right enabling environment, women are highly entrepreneurial.”
I understand you started Frontier Markets because you saw the need to build a new model for energy access, focusing on women entrepreneurs, market insights, after-sales service and scale. But what brought you to this understanding? What’s your story?
I was born and raised in New York, USA, (my parents are originally from India). My parents moved to the U.S. in the early ’80s with their Jaipur, Jain, Jewelry Community, which I refer to as “J-cubed,” to grow their family business and seek a more prosperous life in America. I was my parents’ first-U.S. born child, which meant balancing two very different cultures at the same time. My American culture taught me to discover, explore, assimilate, embrace diversity, dream big to do big things in life, become a global citizen. My Indian culture reinforced the opposite — stay within your limits, “act like a girl,” retain my Indian identity and the one single dream I was supposed to have for myself: to marry a good Indian boy, and become a homemaker. “Remember,” they’d say, “you’re a girl, act like one.”
Naturally, this came with conflict, so I sought out ways to ‘have it all’. Whether that was studying abroad, taking internships, or becoming a national debate champion, I knew to balance my reality, I’d need to get good at negotiating, mediation and conflict resolution. While in college, I had the opportunity to ‘learn by doing’ — I travelled to Europe to study European Relations with the U.S. during the Iraq War, I went through Mediation and Conflict Resolution training in the Hague, I studied abroad in Spain for six months and in Washington DC where I worked at the Woodrow Wilson Center for International Scholars — I realised that if I wanted to be a global citizen or a change maker, I would need to embrace my understanding of culture and history and focus on South Asia as my career.
So, interning in America, and getting a chance to meet Indian counterparts helped me understand that rural India is a space that needs to be addressed further. I realised the problem was not so simple — India had a rural reality — 70% of India required the grid and better infrastructure. That struck me a lot — the opportunity to explore social business and tackling the deep challenges of rural India, and using a model that was commercial.
So I packed my bags, and this 22-year-old discovered India through Microfinance. And boy did it open my eyes. One year became five years of village hopping, living, and learning about the realities, the struggles of rural women and rural households, the pains, the stereotypes.
During my visit to different villages, I realised that many of these women were married at 14, had zero exposure to the outside world, were told that marriage is the only future, and that being homemaker is the only option. For many of them, by the time they turned 30, they already have five children. When I connected with them, over and over again, they would say: “had I had the education, had I had the skills, had I had the opportunity to explore, I would have been different.”
This is when I got angry. Why is this the path? Who decides that daughters are not as valuable as sons? What are our societal destinies based on? Clearly not capability, right?
And that’s when I had my “aha” moment.
I understood these women’s realities and I understood their pain. But unlike them, I have the ability to negotiate my reality, I have the education and most importantly, I had the responsibility to be something more than what was expected of ‘just a girl’. And that’s what lead to this journey of wanting to serve rural households to the best of my ability. To give women the opportunity, to give them the access, and to help them fight the societal norms.
So I went back to New York and explained to my parents my vision, my passion, and my destiny. To which they responded, “Are you nuts?” So I agreed to an unsuccessful arranged marriage in exchange for my dream, and they took the deal. Thus, Frontier Markets was born.
So what is exactly this dream of yours?
Based in Rajasthan, India, Frontier Markets (FM) focuses on making the lives of rural households less challenging by creating access to clean energy products that improve their lives. In order to get these products to rural households, FM has established a network of rockstar rural entrepreneurs (men and women) who are at the centre of change as rural distributor for these products, while earning income for themselves and their families.
“My optimism comes from the stories I’ve heard, and the families I’ve met and the Sahelis of course who tell me their motivation to make this happen for all villages quickly.”
Using a ‘customer-centric’ approach, we have learned that the best way to serve all types of rural households is support three distinct channels: agri-retail network, women entrepreneurs, and institutional partners. Each are supported through a market based approach — where mapping, customer insights, help us understand product, marketing campaigns, and how to support the network. This has allowed us to reach over 80% of the entire village-level population. Truly touching the last mile.
Core to our work is FM’s Solar Saheli program. If I learned anything from my time in microfinance it was that if you give women the right enabling environment, women are highly entrepreneurial. And yet, they are held back due to a severe financing and skills gap that often marginalises them, to the detriment of their families and communities.
Solar Sahelis are more than just ‘sales agents’, they are market connectors, service providers, and changemakers. Sahelis touch the hardest to reach communities, and collect insights about rural households, as well as conduct larger awareness campaigns to help households adopt solutions, and they also are directly involved in installations and repairs for all solutions in their village. They are the centre of trust for the community, and help Frontier Markets truly understand the rural household.
They earn multiple streams of income — from activities and sales of products. This is the first time they are earning their own income — building confidence and control. Our Sahelis invest their money in their own bank accounts and use it for their children’s education, and family stability.
Through insights gathered from our Sahelis, we’ve learned a lot about what our customers want and have been able to introduce amazing new solutions to rural households (designed with them, made in India), and leveraging our distribution network, we have also introduced other partner’s innovations that can help address all facets of energy challenges, and connectivity.
What would you say are the main challenges of bringing clean energy solutions to rural customers in India?
Serving rural customers in India is like being on a rollercoaster ride — there are highs and lows, and each decision impacts something else — and every time you think you’ve seen it all, something else surprises you. For me, I learned that the places where were work is massively chaotic and unpredictable. When Acumen coined the phrase ‘patient capital’, they weren’t kidding.
Working in rural India brings unknown disasters whether its floods that wipe out our families’ crops for the year, or prevent you from reaching your customers.
Economic challenges include significant downturn in economic activity or bad monsoons impacting employment and farmer earnings which would have a corresponding negative impact on demand for solar and other consumer products in rural regions.
Some of the political challenges include changes in government policy, changes in incentives being provided, local areas dynamics such as forced disruption of operation through protests, violence etc.
And then there are other external challenges like natural hazards, non-availability of timely, reliable, and cost effective transportation facilities, and delay in road transportation.
However, Frontier Markets has systematically identified all risks and challenges that could possibly impact our current operations and future operations in states of expansion. Both external and internal challenges are identified and are constantly monitored.
Why is this so important?
Most importantly, because above all, we have a responsibility for our community, we have built a network of trust, and cannot walk away. We remind ourselves that millions of people now turn to us for help. The work cannot end because of challenges along the way.
And of course, we have survived…. mainly because of the people in this community.
You decided to work with a network of digitised rural entrepreneurs. What would you say are the main benefits of working with the local population?
It’s essential for having access to local market data. We use these market data to understand our customers. Supplied by our digitised rural entrepreneurs, we have access to more up to date information on household profiling and village information to inform market entry decisions.
Another critical aspect is the co-creation. We have an integrated model with rural households co-creating products that impact them the most. The insights provided by our rural entrepreneurs inform our design process which we heavily iterate to ensure our end product is not only practical but also useful.
It’s also imperative to work on customer testing. We seek to understand quality, functionality, usability and insights so our digitised rural entrepreneurs conduct product testing with our end customers. This approach ensures that we remain fully connected to their needs and insights before we take a decision to stock, or distribute a particular product.
Finally, for distribution we use multiple modes of last mile distribution to support access in all markets i.e. Sahelis, retailers etc.
All of the above is possible because there is a trust between the rural entrepreneurs and their local community. Working with these digitised rural entrepreneurs helps us give access to their communities’ trust and support.
We know that women are disproportionately affected by energy challenges, and that they are typically excluded from commercial value chains. Some women are also socially marginalised. Can you expand on why investing in women is a key to poverty alleviation and change?
Of the 1.3 billion people in India, 450 million lack access to reliable grid-based electricity denying them access to lighting, appliances, internet connectivity, market access and more. And women are at the centre of that challenge. Current incomes levels are US$1-$5/day lacking further income generation opportunities to address life challenges. Solutions exist, but penetration of reliable solutions to last mile has been only 5–7%.
While some efforts of lighting has happened, households want power, appliances as well as quick service. Over 51% of this community are women who currently contribute to not even 7% of the country’s GDP. Training these women and giving them an opportunity to earn income has been the biggest success factor — women understand the need for energy because they deal with realities in every way more than anyone else. 70% of Frontier Market’s users are women and most are in the last to last mile. FM has proven that women are the best suited to gain the household’s trust to capture, analyse and apply customer insights to build and capitalise on the rural market opportunity.
FM has a proven model operating in Rajasthan reaching over 3 million people through a network of 2,500 women entrepreneurs. We have partnered with organisations across new states who identify with our Saheli Program as an opportunity for economic empowerment for women and addressing products and service need for rural agriculture-based families.
What are the main challenges that women face with regards to access to capital and investment? Also you are advocating for the access to digital and technical training, and to working capital for women. Can you please explain how this contributes to drive sustainable impact across the value chain?
Like I mentioned, give women access to digital and technical training, give them access to working capital, and build their skills to manage other entrepreneurs to drive sustainable impact across the value chain. To succeed, we need to change our mindset and understand the investment better. Banks have capital and intent but aren’t structured to provide low interest loans to women without collaterals or credit history. Investment vehicles have capital but aren’t ready to take the risk for investing in women that might face larger challenges or longer time to help household adopt to electricity sustainably. Our experience proves she’s the right investment.
Our entrepreneurs are now leaders managing new Sahelis, collecting data through mobile phones which includes needs assessments, village information, and monitoring activities on the ground; we provided basic working capital to these women who increased their outreach and conversion by 33%.
What would you say are the top three best practices for unlocking access to sustainable energy finance and technology in India?
Women’s opportunities are limited due to access to capital challenges. It is estimated that only USD 60 million is being allocated to supporting women, a fraction of India’s USD 10 trillion economy. Learning from microfinance — a 20 billion USD industry — women have proven to be the best re-payers. But when it comes time for them to access the mainstream sector — 90% of loans are rejected — mainly due to lack of credit history or collateral. The rural women of India need to gain financial control. To develop products and services to power this critical shift, we can look at the following three practices:
* Financial inclusion: the government self-help groups (SHGs) and banking institutions provide access to bank accounts
* Financial empowerment: Frontier Markets provides income-generating opportunities to give access to start savings
* Financial control: Financial Institutions can develop products for both entrepreneur and end consumer to catalyse better and faster economic growth by creating credit worthy women who have financial control and wealth.
Using technology interface and catalytic financing vehicles we seek to simultaneously deliver in a largely cashless transaction process, while gathering real time data on consumer financial thresholds and use of available funds to inform further market driven solutions with more credible data form rural last mile communities.
Reliable and stable power is a necessity to work and study properly and the lack of clean energy access is a formidable barrier for inclusive economic growth. Yet, most of low-income rural agriculture household earn US$1-$4 a day. How can they afford clean energy products?
Affordability of sustainable products is a challenge. However, access to consumer finance drives high volume conversions, increasing energy access to households and income generation for women entrepreneurs. At the same time, there is an evolution that is happening. Households are asking for more than lighting, they want power and appliances, they want quick service, they want access to finance to make it happen, and in order scale, we need to invest further in our women. Give them access to digital and technical training, give them access to working capital, and build their skills to manage other entrepreneurs to drive sustainable impact across the value chain.
We have conducted several pilots with key partnerships with philanthropic organisations, non-profits, and corporate partners testing the outcomes of blended capital, access to mobile phone and Internet, and investing in training. And it works!
Our network of SHGs currently has access to subsidised finance for consumption and savings, which is facilitated by our network of women entrepreneurs. We are also looking at rotational capital that will be specifically used for helping finance products that FM distributes alongside an additional top-up loan so that the finance available is not just on the product.
You said that it was sometimes difficult for the Solar Sahelis to convince the population to switch to clean energy solutions instead of coal because for decades, rural India has been flooded with poor quality solar products, most of which have ended up in landfill. Can you explain a little bit about what happened at that time and how are things different today?
It’s very simple — selling, and specially pushing products to the end customer without making them realise the value benefit will always result in a downfall. To add to that, poor quality Chinese energy solutions were or are being sold in the domestic market at a discount.
For the Solar Sahelis, their first hurdle was to create awareness and help people to overcome their skepticism, that renewables are a failed technology. We invest a lot on our disruptive marketing and training and have always believed in a pull-based strategy.
Upon completion of the training, women are equipped with solar demo kits and digital technology (smartphone and relevant applications) to kickstart their micro-enterprises, with support from an extensive ground partner network and local infrastructure for their day-to-day operations. As micro-entrepreneurs, the women visit households and community group meetings in their communities to conduct product demonstrations and offer customers the opportunity to try products before they buy. During these visits, they collect data on customers for market insights, earning them a base income that supplements their variable commission income from solar product sales. Together with local coordinators, micro-entrepreneurs also engage in promotional and marketing activities (e.g. melas, puppet shows, etc.).
That’s how we not only generate awareness, but also create interests and need amongst rural customers.
What would you say differentiates your model the most from other companies who bring clean energy technology in rural areas?
Frontier Markets’ team has a combined experience of 100 years working in rural India in microfinance, agriculture, digital marketing, solar, and enterprise development, which has allowed us to take a disruptive approach to energy access and enterprise development. We have heavily invested in a customer-centric approach model, focusing on in-depth understanding of the rural consumer, as well as investing in a pull-market model to build long term relationships with rural customers. We have built a network of digitised rural women entrepreneurs that uses a customer-centric approach to drive clean energy access to agri families in India, using fintech, digital literacy, solar lighting and appliances to empower women. FM has 5,000 micro-entrepreneurs (50% are women) who are trained and have access to technology, marketing, and technical repair, and provide innovative solar solutions to sell to rural households. These entrepreneurs have an 80% productivity and 100% retention rate penetrating 30% of Rajasthan’s market, and setting up value for replication into new states. Our women have earned over 65,000 Indian Rupees per year which is higher than most initiatives. We have become a Government Gold Rated Company, and also the first social business to partner to now the scale our program through government e-commerce partnerships.
How optimistic are you about the successful application of the energy transition in rural communities in India?
I am very optimistic — we have been seeing it happen with our own eyes — the sheer adoption, and the impact of the adoption; rural households are recognising the value of embracing off-grid/ clean energy solutions for a few key reasons:
* they own their systems — hence having 100% control over their power consumption;
* they understand the reliability is based on the sun, not distributed connections or politics, hence having more control;
* they are seeing the outcome of their investment: saving on kerosene expenses that are linked to both kerosene as a cost, and the sheer amount of health scares that are linked to it;
* in terms of productivity, people are keeping their shops open for longer hours, they are working on additional income opportunities at night, they are seeing their children study safely, they are applying it to machinery that they require for their occupations;
* when it comes to safety, the fact that families don’t have to worry about kerosene fires, or disasters is huge, and the fact they have control over darkness is huge.
My optimism comes from the stories I’ve heard, and the families I’ve met and the Sahelis of course who tell me their motivation to make this happen for all villages quickly. I believe the energy transition will lead to a new rural consumer, a new rural economy, because we’re providing an opportunity of infrastructure that creates a fair level of productivity for farmers to earn more and be heard.
What can we see you and the Solar Sahelis accomplish in the future?
I am incredibly excited for the future. Frontier Markets is targeting a network of over 20,000 women to become Solar Sahelis, to address a customer base of over five million households across eight states of India by 2023.
Those who used to be voiceless, who now step up in meetings and demand to be heard; now they have the same power to negotiate. These women are now bringing access to new solutions like internet, finance, and mobile solutions to their villages because they believe they have the same ability and rights as any urban Indian.
“Give women access to digital and technical training, give them access to working capital, and build their skills to manage other entrepreneurs to drive sustainable impact across the value chain.”
I’ll leave you with one of the many stories of our Solar Sahelis. This is the story of Kamlesh. Kamlesh is from Dholpur, Rajasthan. She is 29 years old, and has four kids. As a Solar Saheli, she’s successfully helped over 300 households access solar lighting solutions, and she has taught over 3,000 people how to use a smart phone and connect to the internet. We invited her to Jaipur last year at the Literature Festival to meet the Chief Minister of Rajasthan. She was brilliant. She told her about her village, the electricity challenge, and asked how the Chief Minister was planning on supporting Frontier Markets to scale the program to help the whole state. After the meeting, she started crying — I asked her what happened? She said, “Didi, what do I say to you? Look at what I am doing here, and it’s so sad to hear the things people are saying in my village.” When Kamlesh left her village to come to Jaipur, her brother-in-law spread a rumour that she was coming to the city for prostitution, because in her village, women only leave for Jaipur for that reason. I took a picture, framed it, and gave it to her to show her brother-in-law the work that she did. When she reached the village with that photo, her father-in-law took her in front of the village heads, held her hand high, and said, “see, this is my daughter-in-law, she has done what none you can ever achieve in your dreams, she is the future.” At that moment, Kamlesh asked her father-in-law if she could have one reward, he said, of course, anything you want: “can you please let me decide when my daughter gets married, I’ve saved money, and I want her to go to school, earn income, earn a name, and then get married when she is ready. She can do much more than me, I want to give her a chance.” This is how Kamlesh saved her daughter from child marriage, and started a project to help all Sahelis in her village save their daughters from child marriages.
If not for her, and all the women like her: who else?
My mantra is: “investing in women is the smartest business and a key to poverty alleviation and scale.”
Ajaita Shah is the Founder/CEO of Frontier Markets, a company providing access to affordable clean energy solutions to low-income households in India by building a network of rural entrepreneurs. She also serves on the board of Frontier Innovations Foundation, a non-profit focused on last-mile distribution support for clean energy companies. Twitter: @Ajaita_Shah
Learn more about Frontier Markets: frontiermkts.com