MICROCAPITAL BRIEF: Dahabshiil’s “MicroDahab-MFI”, SolarGen Technologies Announce “Lease to Purchase” Energy Product for Low-Income Somali Farmers, Small-scale Entrepreneurs in Somalia

MicroDahab-MFI, the microfinance institution (MFI) that serves as the corporate social responsibility arm of the United Arab Emirates-based conglomerate Dahabshiil Group, and SolarGen Technologies, a Somalia-based distributor of renewable energy technologies, have announced a joint energy project in Somalia. The project will allow low-income Somali farmers and entrepreneurs to acquire a “solar-powered water pump”[1] under a “lease to purchase”[1] agreement. The African Enterprise Challenge Fund (AECF), a Kenya-based fund that promotes for-profit enterprises operating in Africa, has provided unspecified support to the initiative.

Abdirashid Duale, the chief executive officer of Dahabshiil Group, said that “we have introduced leasing products to transform the lives and fortunes of many communities in a socially responsible yet sustainable way. MicroDahab will bear both the capital cost and risk of asset ownership, while our clients reap the benefits of using the water pumps, at minimal rents”[1]. He added that “[…] the Somali territories have an abundance of solar energy which can be harnessed to both decrease cost-inefficiencies for businesses and provide a safer and more sustainable clean energy solution for hundreds of communities across the region. We want to facilitate climate change adaptation over investments that actually build resilience to changes and shocks”[1].

As of 2015, the African Enterprise Challenge Fund (AECF) manages USD 200 million. Since its inception in 2014, MicroDahab has loaned approximately USD 1 million and served approximately 15,000 borrowers in Somalia. Financial information on SolarGen Technologies is not available.

By Alíz Crowley, Research Associate

About African Enterprise Challenge Fund (AECF)

The African Enterprise Challenge Fund (AECF) is a Kenya-based fund that promotes for-profit enterprises operating in Africa. As of 2015, the fund manages USD 200 million. It is financed by the governments of Australia, Denmark, Netherlands, Sweden and the United Kingdom as well as the International Fund for Agricultural Development (IFAD), an agency of the United Nations.

About Dahabshiil Group

Dahabshiil was founded in 1970 to enable Somali migrants to send money to family members in other countries in East Africa. It is a Dubai, United Arab Emirates-based organization that offers money transfer, banking, telecommunications and energy services. The organization has an office in London, United Kingdom, and an operations center in Harageisa, Somaliland. As of 2015, Dahabshiil Group employs approximately 5,000 people. MicroDahab MFI was established as the corporate social responsibility subsidiary of Dahabshiil Group in 2014. It offers microfinance services in Somalia with the aim of furthering poverty alleviation in the country. As of 2015, MicroDahab has loaned approximately USD 1 million in Somalia and served 15,000 borrowers. 70 percent of the organization’s borrowers are low-income women. Further financial information on Dahabshiil Group is unavailable.

About SolarGen Technologies

SolarGen Technologies is a distributor of renewable energy technologies. The organization is based in Mogadishu, Somalia, and it has an office in Nairobi, Kenya. The company offers solar water pumps, solar home systems, and water and energy consulting services. Financial information on the organization is unavailable.

Sources and Additional Resources

[1] PR Newswire, MicroDahab to Lend Solar Powered Water Pumps Under New Microfinance Initiative

MicroCapital Universe Profile: African Enterprise Challenge Fund (AECF)

MicroCapital Universe Profile: Dahabshiil Group

MicroCapital Universe Profile: SolarGen Technologies 

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