Introducing PAYGO Lab
Helping tackle off-grid solar's consumer credit challenge
Read our full press release here.
PAYGo companies collect an average of only 62 cents of every dollar owed to them each month.
New industry data quantifies the scale of its credit management crisis. This fact validates deep concerns held by entrepreneurs and their investors regarding business viability.
Chart Source: GOGLA Off-Grid Solar Market Trends Report (2022)
Why this is happening
Lack of credit management DNA
PAYGo companies focus on making sales. Emphasizing quantity over quality has resulted in the over-financing of many clients, which impairs PAYGo companies’ balance sheets.
A credit management approach shifts focus to only selling to customers who can afford the product.
Inadequate portfolio monitoring
Key industry metrics (c.f. “collection rate”) focus on revenue recovery, but less one sales and monitoring.
Collections must be monitored across different units of analysis in order to be actionable (e.g. early warning and/or corrective measures).
Weak (or no) customer screening
Inadequate or non-existent credit screening leads to acquiring customers who lack ability or willingness to pay.
This results in payment lags and default (a “lose-lose” for customers and companies).
The Lab's solution
Company Level Diagnostic
Company level diagnostic: we assess what’s happening with respect to credit management, both quantitatively and qualitatively. We analyze repayment data to understand collections performance. We interview key staff to understand the customer journey and the ways in which their ability to pay are handled.
Building Credit Capacity
Credit Management Mainstreaming
Build credit capacity: Based on the diagnostic phase, we come up with a comprehensive plan for the company to pilot mainstreaming credit management into the customer experience. We help companies build systems and processes, and to learn by doing.
Credit management mainstreaming, and mentorship: Based on evidence from the pilot, we support the company to mainstream credit management across all operations. This broader systemic change (building credit DNA) makes credit management and customer success core to operational and strategic decision making.
The Lab's impact
Our comprehensive support to companies leads to scaled impacts across the following metrics: