Ajaita Shah has been working in India for 10 years in microfinance and clean energy distribution. She was a 2006 Clinton Service Corp Fellow, 2012 Echoing Green Fellow, 2013 Cordes Fellow, has been awarded the most influential award in microfinance for people under 30, and Business Week's 30 under 30 award, and most recently, Forbes Magazine’s Top 30 Under 30’s Social Entrepreneur of the Year.
An active educator, collaborator, and catalyst in helping scale clean energy access globally, Ajaita tells us the story of FrontierMarkets and how she offers what the clean energy market has forgotten to provide to low-income families.
Servane: What have been the biggest learning curves for you as an environmental entrepreneur?
Ajaita Shah: I spent many years working in rural India and living in darkness, witnessing kerosene fires and lives lost, I promised myself to come up with a solution that would be lasting. I was angry and hurt by the way people were living, and I knew there was a more pragmatic and effective solution. I wanted to be a part of the solution and ensure that I could make things better. I want to be the reason that rural India has access to energy. I want every Indian household to be alleviated of basic energy worries and be a part of the larger global image of social change. I want people to believe that women can be the lasting vehicle for positive change. I want to have reached at least 10 million households in the world. I want to be known as the girl that inspired other young girls to think outside of the box, take a chance, and change the world forever.
It has been very challenging to work in the clean energy sector in the last 3 years; it's a very nascent market, with very little education and demand for solar. I have spent the last 3 years bridging many gaps in the sector - education, awareness about solar, working with manufacturers to understand design, rural consumer needs, pricing, quality of products, building a robust supply chain, getting financial institutions to focus on distribution and understand the needs of the energy sector beyond technology innovation. I see energy access at the key to all impact - without power and lighting, many other interventions lack impact - you cannot study at night without a light, you cannot run a shop without power, you cannot run a clinic with power, you cannot use innovative tools - I have finally seen a change in the landscape - people are slowly understanding the importance of alternative energy solutions to fit the gaps in the sector. It's been an amazing learning curve - understanding the needs of the rural customer, understanding delivery systems, testing products, winning debates about solar vs kerosene, and trying to create scale for solar.
Servane: What is Frontier Markets and what impact are you making?
Ajaita Shah: Frontier Markets (FM) is a sales and service distribution company for affordable clean energy products to improve energy access in rural India for low-income families (BOP). Frontier Markets (FM) partners with local channels and trains field staff and local sales agents to educate, relate and reach households through our own wholesale and franchise retail points providing BOP access to high social impact and affordable products and customer service. We have started operations in rural India and are working with clean energy products and plan to expand to water, agriculture and more.
Frontier Markets was established in response to the market failure to provide rural BOP villagers in India with access, training, and servicing for clean-energy products. Despite a clear demand, rural villagers are reluctant to purchase clean energy solutions either because they are not educated on how they work, have skewed quality perceptions of solar due to government subsidies and cheap products that flooded the market, and a lack of trust in solar based on an inferior product purchased in the past. Product companies exist that design products with this target customer group in mind, but they lack on-the-ground infrastructure to deliver these to last-mile locations, do not understand the rural customer, and do not have the capability to provide education and servicing after a sale is made.
FM targets the access challenge faced by rural household for quality products. Over half the worlds population uses deadly cooking and lighting practices that kill over 2 million people annually, where half of these deaths are children under the age of 5. Product solutions exist to fix this staggering issue, but the problem still lies in the education and distribution channel for these products that does not exist at scale.
FM targets Base of the Pyramid (BOP) Consumers who have limited access, but high demand for quality and affordable energy products, reside in rural and semi-urban settings and live in a households that makes Rs 2,000-3,500 ($43-$76 USD) per month. These consumers often require a loan product to buy a consumer durable, are farmers, dairy, laborers, MFI members and more. They lack access to energy and markets to acquire products. Our focus on the rural household makes us an innovative model as we customize solutions for them and work with manufacturers that can scale our designs based on their needs.
Servane: What was the problem?
Ajaita Shah: Frontier Markets was established in response to the market failure to provide rural BOP villagers in India with access, training, and servicing for clean-energy products. Despite a clear demand, rural villagers are reluctant to purchase clean energy solutions either because they are not educated on how they work, have skewed quality perceptions of solar due to government subsidies and cheap products that flooded the market, and a lack of trust in solar based on an inferior product purchased in the past. Product companies exist that design products with this target customer group in mind, but they lack on-the-ground infrastructure to deliver these to last-mile locations, do not understand the rural customer, and do not have the capability to provide education and servicing after a sale is made.
We offer a unique distribution model as part of its inclusive business commitment, partnering with local entrepreneurs who sell clean-energy products under the brand name ‘Saral Jeevan.’ We have set up brick-and-mortar service facilities to fix any technical issues, as well as educate customers. We periodically meet with consumers to better understand their product and design needs, so that by working with technical partners we are able to provide them with high-quality and relevant products. Our 18+ years of experience in rural marketing and market-based solutions have given us a better understanding of how to reach the right customers, and provide applicable products to different segments of the market.
Our 3 years of experience with product companies give us an advantage in negotiating price points which are affordable for our target customers. Because of our high-touch approach and emphasis on quick and simple servicing, customers have begun to trust our brand and regain confidence in clean-energy solutions as a way to improve household health, wealth and productivity.
Our field team researches and creates new branches every quarter that capture standardized markets and build the right product basket to run a sustainable profit center. Each branch at full capacity covers 300,000 households with 30 franchise retail points. Our research and operations teams continually select and test new products and provide feedback to manufacturers to improve product design and quality. Our close relationship with our customers makes us unique in this market.
To date , FM has sold over 20,000 clean energy products in Rajasthan and Andhra Pradesh. We are present in 16 districts of each state. FM is targeting 50 million households in next in 5 years.
Servane: What would you tell western local authorities, local governments, and private organisations about your integrated system?
Ajaita Shah: This is the only way to achieve a sustainable model. The combination of getting the right energy source, designing the right product based on the understanding of the needs on the ground, manufacturing it at scale to keep the pricing low, introducing the solution in a way that resonates with the target customer, selling the solution through local points to make it accessible, linking it to financing solutions to make it affordable, and most importantly, providing after-sales service to ensure it's accountable. Local authorities play an important role in the beginning - endorsing best companies and practices to allow these systems to enter these areas; local governments ensure the system stays by helping link others into the initiatives and really help it scale - they have the access and the reach at a much larger level.
Private organisations have the ability to make it available on a global scale - bringing best in practice, better quality, efficient systems, and most importantly, commercial capital to make the whole system work.
WOMEN AND THE LAST MILE DISTRIBUTION: SOLAR SAHELIS
I have made it my resolution this year to reconnect with people who inspire me and make me a better person. After being fortunate early this year to be honored among Forbes Magazine’s 30 Entrepreneurs under 30, I took this as a sign to turn my resolution into full-scale action. Throughout my time working in Microfinance and now as head of my own social enterprise, I have been inspired time and time again by the strength, finesse, and resilience of Indian women. I believe that women are the leaders of the future and have tremendous potential as vehicles for social change. As much to honor this immense source of inspiration and to create energy-independent households in rural India, my mission to make 2014 the year for women in solar through a new campaign called “Solar Sahelis".
We are hosting a Women’s Leadership event in Jaipur in June, gathering together successful and influential women of Rajasthan to share lessons, experience, and join together to advance our respective causes. Last February , I travelled to Mumbai to be honored by the World Congress for outstanding achievement as a female leader; I had the opportunity to speak during that event to show top Indian corporates the impact of Frontier Markets’ work in rural households’ lives and livelihoods. By partnering with like-minded female entrepreneurs and political figures in the space, we can give women independence from kerosene and fossil fuels, providing them with safety, convenience, and savings for them and their families.
The Solar Saheli campaign empowers rural women to become solar entrepreneurs in their communities, spreading the news about solar and selling products directly to other women; this program is inspired by Solar Sisters, Mary K, and Tupperware – we believe that if we train, inspire, mentor, and assist local village women, they can become income-generating entrepreneurs and change their villages. We plan to create 1,000 Solar Sahelis in the next 6 months and hope that you will support us in this effort!
It is my firm belief that Indian women are natural change-makers, and can do anything we put our mind to. This is a very hard journey, but if we persevere, we can change the leadership structure of India. As an American-born Indian woman who has returned to India, I have faced a lot of these challenges, but now, am more motivated than ever for us to unite, share our stories, support each other and make significant changes in business and social impact.
Servane: What would you like your older self to prepare you for?
Ajaita Shah: Moving beyond India, inspiring others to be a part of the social business world, help move policies that resonate with challenges on the ground, be able to globally replicate our work through partnerships with others. I want to be prepared to smile - be prepared to see a satellite map with less dark patches, and more lights, a shift in the poverty line.
Servane: Finally, who are the top 3 women in the social innovation space who inspire you?
Nicola Armacost - Founder of Arc Finance- she has been my first mentor in the clean energy space, inspiring me to think through my models, think through my work, and focus on operations. She herself is a pioneer in understanding the linkage between microfinance and energy access; an incredible speaker, wonderful mentor, and amazing advocate of me and my work.
Sonal Shah - Founder of Indicorps / Georgetown Social Innovation Head - I met Sonal when I was 20 years old, when she was the head of google.org, had already had an incredible career in the private sector, in government, now social innovation, and I was in love with her own entrepreneurial efforts with Indicorp - I remember telling myself, wow, if I can become her .... she has been an inspiration to me, as a social everything - true leader, hard worker, passionate in her cause, and an amazing mentor.
Audrey Selian - Audrey and I met when Frontier Markets was just an idea; she and I have worked together to change the way we approach impact investment. During my time of investment needs, we both were so frustrated that there were not any "trigger investors" in the space - nobody wanted to put the first capital in as a social investor, we tried so hard to change this; she truly succeeded with the Artha Platform, her work with Rianta, and always fighting for social businesses like mine - today she is a friend, a mentor, and an investor of mine.