What is NalaPayGo?
NalaPayGo is a Lesotho-based, majority female-owned and managed company that’s shaking up the last mile solar distribution scene. It’s actually the pioneer and the only provider of pay-as-you-go (PAYGO) solar solutions in Lesotho. The company was launched in 2019 to tackle one of the country’s biggest challenges: low electrification rates, especially in rural areas where about 62% of the population still lacks access to electricity. NalaPayGo offers solar home systems ranging from 6 to 40 watts on a PAYGO basis, which means customers can buy solar products by making small, affordable installment payments over 12 months. Since starting out, NalaPayGo has sold over 3,300 systems, positively impacting more than 12,000 people. The goal? To reach every rural area in Lesotho and serve over 52,000 households by 2026. Pretty ambitious, right?
Main Benefits of NalaPayGo’s Solar Solutions
Here’s a quick snapshot of what makes NalaPayGo stand out:
- Over 3,300 solar home systems sold since 2019
- More than 12,000 people positively impacted
- Plans to reach 52,000 households by 2026
- Profit margins between 30% and 40%
- 96% of sales done through PAYGO financing
- Low default rate under 3%, thanks to great after-sales support and automatic lock features
- 54 agents spread across different service centers or hubs for last mile distribution
Lesotho’s Energy Landscape
Lesotho is a unique place, completely surrounded by South Africa and economically tied to it. The economy mainly depends on agriculture, which makes up about two-thirds of its income, plus manufacturing and remittances from migrant workers in South Africa’s mines. Most rural households survive on farming or migrant labor, with nearly half the population earning income through crop cultivation or animal husbandry. But here’s the catch: unemployment sits at 28%, and about 30% of rural folks live in extreme poverty. Around 82% of rural Lesotho—roughly 1.2 million people—don’t have access to grid electricity. Instead, they rely on candles, disposable batteries, paraffin, firewood, and charcoal for energy. This makes energy super expensive, with what’s called a “poverty tax” hitting households hard. On average, families spend $2.4 weekly on paraffin or kerosene and about $33 annually just to charge their mobile phones. It’s a tough cycle.
Challenges of Low Income and Credit Constraints
The low income levels and credit constraints in Lesotho’s rural areas limit the ability of households to buy high-impact, quality energy products and services. This means many people remain stuck using expensive and often harmful energy sources. The result? A vicious cycle of poverty, environmental damage, natural resource degradation, and poor health outcomes. NalaPayGo’s PAYGO model is designed to break this cycle by making solar energy affordable and accessible through small, manageable payments.
How NalaPayGo’s Business Model Works
NalaPayGo operates as a community distribution and service company with a clear mission: to improve lives by making quality products, services, and renewable energy accessible and affordable across Lesotho. The business model is locally driven, using a network of agents to reach customers in rural areas. This approach not only increases access to affordable solar energy solutions but also smartphones that help improve the quality of life for NalaPayGo’s customers. The company’s use of PAYGO financing means customers can pay over time, which is a game changer in a market where upfront costs are often a barrier.
Project Impact on Sustainable Development Goals (SDGs)
- SDG 7: Affordable and Clean Energy – by providing access to solar energy
- SDG 1: No Poverty – by reducing energy costs and creating economic opportunities
- SDG 3: Good Health and Well-being – by replacing harmful energy sources like kerosene
- SDG 5: Gender Equality – through majority female ownership and management
- SDG 13: Climate Action – by promoting renewable energy and reducing carbon emissions
- SDG 8: Decent Work and Economic Growth – by creating jobs via agent networks and local distribution
Looking Ahead: NalaPayGo’s Vision for Lesotho
With funding from seed investors and grants like those from the EEP, NalaPayGo has built efficient last mile distribution channels across Lesotho. Their agent network of 54 sales agents is spread across various service centers or hubs, ensuring that even the most remote communities can access solar energy. The company’s vision is clear: to expand its reach to all rural areas in Lesotho within the next four years and bring affordable, clean energy to over 52,000 households by 2026. It’s a bold plan, but with their proven model and community-driven approach, NalaPayGo is well on its way to lighting up Lesotho’s future.
