By Energy 4 Impact
Rahel Shigela is a self-taught cookstoves maker based in Mwanza, north-western Tanzania. Thanks to the support she received from Energy 4 Impact’s Developing Energy Enterprises Project in 2008, Rahel’s business has gone from strength to strength. Now, Rahel has ambitious plans to expand her cookstoves workshop and train the next generation of clean energy women entrepreneurs. Energy 4 Impact is supporting her through this new phase under an initiative focused on strengthening women’s integration into renewable energy markets in East Africa.
While harbouring ambitious goals, Rahel has also been an invaluable source of help and inspiration to a new crop of women entrepreneurs – passing on her knowledge and skills in making and selling high-quality improved cookstoves. The use of improved cookstoves is especially important in reducing indoor pollution, cutting energy costs and saving the time lost in collecting firewood, especially in arid and heavily deforested areas.
However, establishing and growing a business can be challenging. Besides a lack of business and technical skills, access to funding is a major hurdle facing most micro-entrepreneurs, especially women. Many financial institutions consider women a high risk because they do not have collateral or full-time employment to offer against loans. Nevertheless, having teamed up with two other entrepreneurs to form an informal group, Rahel successfully applied for a loan at the Mwanza local authority fund for micro-entrepreneurs.
“We requested the District officials to expedite their loan application,” says Barnabas Mtelevu, Energy 4 Impact’s Tanzania Business Development Services Coordinator. “We personally endorsed the group and expressed our confidence in their business.”
This endorsement paid off as Rahel and her co-entrepreneurs received a TZS 5m loan ($2,200) in January 2017. With guidance from Energy 4 Impact’s mentors, they invested the money in a new production method of making metal cladded cookstoves to improve their quality, value and durability. They also used part of the money to cover transport costs to markets. The project was successful and they have since fully repaid the loan.
“We also encouraged the women to save money with financial institutions and mobile lending platforms. This helps boost their creditworthiness and build a good financial track record to make it easier to borrow in the future,” says Godfrey Sanga, Energy 4 Impact’s Head of Programmes and Operations in Tanzania.
Energy 4 Impact’s mentors are helping the women register their group with the local government authority, so that they stand a better chance of securing loans in future. They are also advising them on forming self-help groups such as Village Savings and Loan Associations (VSLA) to enable them pool funds to lend to each other. The women are now planning to open a joint savings account, from which they could each borrow to expand their respective cookstove businesses.
Operating in a group is also helping knowledge transfer and efficiencies. The women are learning from each other and pooling skills, knowledge and facilities to save on operating costs. The group set-up means Energy 4 Impact’s mentors can run joint training in business and financial management, customer care and in sales and marketing.
Finding cost-effective transportation to markets and remote villages is often a challenge for remote enterprises. Energy 4 Impact encourages entrepreneurs working in groups to pool together and share transportation costs for going to markets, trade fairs and exhibitions.
“The group dynamics make joint marketing activities and handling large orders easier,” Barnabas says. “Whenever Rahel receives a large order, she enlists the help of her fellow entrepreneurs and shares the proceeds with them. This helps spread the costs and generate more sales.”
At a personal level, Rahel’s ambition is to establish a training centre with a bigger workshop for cookstoves and other ceramic products, and to continue to pass on her knowledge and skills to aspiring clean energy entrepreneurs.
“To realise her ambitions, Rahel needs to increase her production and expand her market reach to more regions of the country,” says Barnabas. “She is well on the way; from the proceeds of cookstove sales, she has already bought two acres of land to expand the workshop and we are helping her with a strategy to increase sales and diversify her product range to capture a wider customer segment,” Barnabas says. “Also, to finance her plans, Rahel plans to take a personal loan from a local commercial bank and we’re guiding her on this.”
“The marketing and mentorship support I receive from Energy 4 Impact has been instrumental for my business and personal growth,” says Rahel. “Just seven months after joining the Women Integration into Renewable Energy (WIRE) Value Chains programme, my sales rose by 200%.”
“Not only is my enterprise flourishing but the group approach enables me to share my passion and knowledge for cleaner energy with other women entrepreneurs. Together, we can really make a difference in the communities where we live.”