Empowering women entrepreneurs driving change in Nepal, and soon Southeast Asia
May 2022
The city of Kathmandu in Nepal is an early pioneer in green mobility, having introduced safa tempos – three-wheeled electric minibuses – as an alternative public transport option in the mid-1990s. Safa tempos are zero-emission, battery-powered vehicles that offer a solution to the growing air pollution problem in the city, partly attributed to conventional fossil-fuel driven buses and microbuses, which were predominant at the time. At its peak in the year 2000, as many as 700 safa tempos were in operation, with around half of these vehicles being driven or operated by women.
Yet, amid global clamor to shift to cleaner, more sustainable mobility, the expansion of this once promising industry came to a halt. One of the factors in the decline of safa tempos was the high cost of maintaining or upgrading the vehicle’s battery from lead-acid to lithium-ion. With the cost of lithium-ion batteries going for as much as $10,000, it is a price that is too steep for most women in the informal sector. Most women lacked the income proof, credit history, and collateral that would enable them to take out a loan from banks, resulting in an inability to grow their business because of expensive financing options.
Aloi (formerly Aeloi Technologies) is a fintech platform that provides digital fund-tracking software for financial institutions. Their software builds a digital financial footprint that helps de-risk micro business loans and decreases long-term interest rates. These loans are issued to entrepreneurs through digital tokens, which can only be spent at accredited vendors, thereby working like an automatic audit to ensure that funds are spent for business purposes.
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Aloi won the ASEAN Australia Smart Cities Trust Fund (AASCTF) Smart Cities Datathon 2021, organized by ADB and the Australian Government Department of Foreign Affairs and Trade. The Datathon challenged innovators in Asia to develop digital solutions that can be used to build back smarter and make cities more livable, encouraging more private sector involvement in cities’ pandemic recovery.
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Specific Interventions Supported
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The $20,000 seed funding award allowed Aloi’s Green Energy Mobility (GEM) software product for Kathmandu’s safa tempo industry to grow in design, implementation, and usage in 2021. This included the completion of 18 small loans (ranging from 40,000 NPR to 50,000 NPR or $415 to $515) and five large loans (worth 1,000,000 NPR or $8,317), which catered specifically to women safa tempo drivers and operators. It also onboarded 18 vendors with service offerings spanning driver training, garages, insurance, batteries, charging stations, and electric vehicle parts.
The seed funding also helped Aloi advance their software development. To date, they have completed two out of the three milestones in migrating their database into a Hyperledger blockchain, which aims to build the foundation of blockchain-based functions such as smart contracts and enhance the security and transparency of transactions. It also allowed Aloi to further develop their token payment system based on feedback from interviews and focus groups with users, which include drivers, passengers, operators, vendors, and financial institutions; support research on the potential transition into Unstructured Supplementary Service Data (USSD); and, fund the development of an Interactive Voice Response (IVR) system. The latter two are seen as service delivery enhancements to their current SMS-based system.
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Furthermore, the seed money from AASCTF helped the Aloi team strengthen their research on carbon financing for safa tempos, to create a road map to gain carbon accreditation for electric vehicles in Nepal. Such a program will enable operators to receive carbon credit from international carbon markets. In line with their goal of expansion to Southeast Asia, Aloi also completed the setup of their company headquarters in Singapore and sought consultation interviews with various potential investment partners and venture capital organizations in the region.
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Aloi also collaborated with Daraz Online Shopping, Nepal’s largest online marketplace, using safa tempo drivers to deliver products to customers in Kathmandu, demonstrating a potential use case for safa tempos in a commercial context.
Results and Impact
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Aloi’s GEM product enables more of these three-wheeled electric minibuses on the road – a boost for women entrepreneurs and low-carbon transport.
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One of these women entrepreneurs is Devi Shrestra, who, together with her husband, is one of the beneficiaries of Aloi’s GEM loans. “Even though we own two vehicles together, only one has a battery, and one is rusting in the garage,” Ms. Shrestra shared. “The batteries we used previously used to run for at least 25 months, but when the duplicate trojan battery came, it just lasted for seven months. We had taken a loan worth NPR. 10,00,000 for the battery for one vehicle. We don’t have that much capital for another vehicle. Hence, we might opt for another occupation. Nevertheless, we are trying to apply for a loan from a bank, and Aloi is supporting us to get the loan with minimum interest rate.”
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AUTHOR
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Kristine Lucero, AASCTF
Sonika Manandhar (right), Founder and Chief Technology Officer of Aloi, with Devi Shrestra (left), a beneficiary of Aloi’s Green Energy Mobility product, which caters specifically to women safa tempo drivers and operators. Photo: Aloi