Thursday, 09 February 2023 11:51

FosRich goes after $2 billion solar market via microfinancing deals

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Lighting and electrical products distribution company FosRich has inked deals with two microfinancing companies to grab its share of the $2 billion market for solar electrical products.

Both Access Financial Services and Dolla Financial Services have partnered with FosRich Company Limited to provide financing solutions for solar power systems and accessories to mostly householders and a few small businesses.

Managing Director of FosRich, Cecil Foster, estimates the demand for solar electrical products at about $2 billion over the past eight months. 

“We have identified a part of our business that we can grow exponentially, that is renewable energy, which includes solar water heaters, solar power systems, panels, batteries inverters and LED products. We see there is a groundswell of demand right now because, on our books, we have requests from our customers for some $2 billion of such products”, Foster said.

Under a memorandum of understanding (MOU) signed with Access Financial, qualified persons will get financing for alternative energy solutions, mainly solar panels, solar water heaters, Lithium-ion batteries, and hybrid inverters, with a full supplier warranty on all products and services.

“There is no doubt that alternative solutions make sense, but for some persons, the up-front cost has always been prohibitive. The beauty of this agreement is that the average Jamaican now has full access. With affordable financing from Access Financial, you can take full advantage of the energy options available at FosRich,” acting chief executive officer at Access Financial Hugh Campbell said in a news release.

The deal between Dolla Financial Services and FosRich is similar, allowing FosRich customers to access up to 90 per cent financing from Dolla for their solar products. 

Foster said his company decided to approach the microfinance companies because they were more nimble and flexible than some of the more traditional lending institutions.

“In partnering with Dolla and Access, we realise that they are on the ground with a lot of the persons asking for these products. We approached them to make a block of funds available, and they were both willing to come on board with a deal”, Foster said.

Foster said while micro-financing companies usually charge close to 45 per cent in interest per annum for loans, Access and Dolla had slashed their rates “down into the teens” (under 20 per cent) under the deal.

He said the maximum duration of the loan is five and half years, which means customers could bring their electricity bills down significantly during that time.

Kadeen Mairs, CEO of Dolla Financial, explained that the microfinance firm had reduced a lot of the risk associated with lending, making the interest rates more attractive. 

“We are in the business of lending because of our high cost of capital, our rates are higher than your commercial banks, but we figured out a way to reduce that cost, where FosRich can assist with installation and sourcing,” Mairs said. 

Meanwhile, the FosRich boss said Jamaica is blessed with year-round sunlight and has a cadre of engineers who can install and service solar systems to help reduce the fluctuating and rising electricity costs locally.