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Pay-as-you-go contracts for electricity access: Bridging the “last mile” gap? A case study in Benin

Barry, Mamadou Saliou; Creti, Anna (2020), Pay-as-you-go contracts for electricity access: Bridging the “last mile” gap? A case study in Benin, Energy Economics, 90, August 2020, p. 104843. 10.1016/j.eneco.2020.104843

Type
Article accepté pour publication ou publié
Date
2020
Journal name
Energy Economics
Volume
90
Number
August 2020
Publisher
IPC Science and Technology Press
Pages
104843
Publication identifier
10.1016/j.eneco.2020.104843
Metadata
Show full item record
Author(s)
Barry, Mamadou Saliou
Laboratoire d'Economie de Dauphine [LEDa]
Creti, Anna
Laboratoire d'Economie de Dauphine [LEDa]
Abstract (EN)
We analyze pay-as-you-go (PAYG) contracts subscribed by 10,120 consumers living in Benin (Sub-Saharan Africa) to purchase solar kits or panels for lighting and charging services. PAYG are flexible loans that allow fees payment through mobile banking. Most of the PAYG consumers live in well electrified areas (Cotonou, Porto Novo, Abomey Calavi, in the coastal zone). By estimating a very simple multinomial logit model, we find that these customers have a high probability to enroll in PAYG contracts. Living in urban and peri-urban areas, they use solar devices to substitute expensive and often unreliable grid electricity services. Consumers located in more periferic and less electrified areas (Savalou) have a low probability to default, as the substitution effect is weaker. Overall, in our case study, PAYG targets credit worthy consumers, in order to decrease the investment risk of the company providing solar devices. These results cast some doubts as to whether PAYG bridges the “last mile” electrification gap.
Subjects / Keywords
Electricity access; Africa; Household saving
JEL
D14 - Household Saving; Personal Finance
L14 - Transactional Relationships; Contracts and Reputation; Networks
N47 - Africa; Oceania
Q42 - Alternative Energy Sources

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