Access to Energy for the Base of the - Ashoka

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� Problem and magnitude:
� Codensa operating in highly regulated
environment that capped market share at 25%
� Customers unable to access credit; 66% of clients
were not bank users as they lacked official ID,
proof of income or credit history
� Needs addressed:
� For utility, ability to increase revenue in regulated
environment
� For customer, ability to purchase assets and build
credit history
� Ability to serve the poorest:
� 90% of Codensa Hogar clients in lowest 3 income
strata
� Program reaches at least BOP2000
Project economic viability Project scalability
� Profitable line of business:
� Program is more profitable than Codensa’s
mainstream business: generates 7% of company
revenue and 9% of EBITDA
�� Average revenues coming from the 550,000
Credito Facil clients rose approximately 40%
representing an additional USD 54 million in
2006
�� From Sept 2006 to Sept 2008 EBITDA has
increased from 41.7% to 43.4%; net margin has
increased from 17.0% to 19.2% in environment
of capped market share
� No use of subsidies
� Ability to attract funding:
�� Continues to be financed through company and
earnings
Sources: Hystra analysis; interviews
Project ability to solve the problem
� Sustainability: Default index at 90 days: 2.06%
(vs.2.01% average banking; 3.5% credit cards)
� Impact:
� Program gives access to a wide range of product
and services, including computers and insurance
� 45% of clients previously without formal credit got
access to new financial services
★★★ ★★★
� Client base in Colombia: 2m people in lowest 3
income strata
� Market conditions for success: Utilities must build
new skills around credit
�� Risk administration for BOP customers
�� Commercial retail and brands integration
�� Operational efficiency in massive credit
allocation
� Partners required:
�� Retailers
� Electric appliances
� Specialized credit rating and debt collection
agencies
★★★