We interviewed a number of these entrepreneurs and company representatives, asking each of them three questions:

• What are the main challenges you’re facing in running your business?
• What kind of support would help you overcome these challenges?
• What’s one thing you wish funders understood about your business needs?

Their responses reveal some of the innovative approaches and key issues that are emerging in Africa’s vibrant ecosystem of small and medium-sized enterprises. We’ve embedded these video interviews below.

Asnath Gateri at AceleAfrica

Wanja Nyaga at Chanay Agriprocessors

Wanja Nyaga, Founder of Chanay Agriprocessors Limited, shares her experiences pursuing Chanay’s mission to reduce post-harvest losses in agriculture by processing high-quality jams, chutneys and sauces from locally grown produce.

Edgar Edmund Tarimo at Green Venture Tanzania

Marksteve Wangui at Libera Empire

Marksteve Wangui, Director of Partnerships and COO at Libera Empire, discusses the company’s mission of providing passengers in Kenya with reliable, comfortable transport, while empowering bus owners through fleet management and revenue sharing.

Barbra Gaitano at ZanaAfrica

Barbra Gaitano at ZanaAfrica discusses the company’s work equipping adolescent girls in Kenya with menstrual products and other tools they need to safely navigate puberty and unlock their full potential.

James Militzer is the managing editor of NextBillion.

These pressures are compounded by the vulnerability of health infrastructure, with facilities often facing water shortages and unreliable power and supply chains during crises. This creates a clear opportunity for climate-resilient upgrades, from solar electrification of health facilities to ensure uninterrupted cold chains and essential services, to climate-proofed supply routes.

In addition, many African countries and health systems are already strained by high disease burdens and chronic underinvestment, and must now contend with these climate-related shocks on top of existing demands. Many operate with limited workforce capacity, fragile supply chains and uncertain financing, leaving them ill-equipped to manage surges in cases of heat stress, respiratory illnesses, water-borne diseases and malnutrition. Without targeted investment in integrated climate-health solutions, these health systems risk becoming overwhelmed, reversing hard-won gains in public health and undermining resilience across some of the most climate-vulnerable communities in the world.

Building on the Economics of Prevention

The intersection of climate change and health presents a compelling investment case in Africa, grounded in the economics of prevention and presenting opportunities for social and financial returns to both public and private funders. Across the continent, billions are spent annually treating climate-sensitive diseases. Preventing diseases not only reduces treatment costs but also preserves workforce productivity and frees constrained healthcare capacity for other needs. Over time, these avoided costs and productivity gains compound, strengthening community health outcomes, reinforcing local health system resilience and reducing fiscal strain on governments.

Consider malaria, which kills over 600,000 people annually, predominantly in Africa. Climate change is expanding the geographic and seasonal range of malaria transmission. Recent studies have shown significant association between precipitation, temperature, accelerated mosquito vector and parasite development, and increased malaria transmission in sub-Saharan African countries. The economic implications are substantial: Malaria costs African economies around $12 billion annually in lost productivity, and is estimated to slow economic growth in endemic countries by between 0.7% and 3% per year. Research published in 2025 by Malaria No More and Corporate Council on Africa finds that every dollar invested by the United States in malaria control on the continent generates $5.80 in economic growth, reducing the “malaria tax” — i.e., a combination of lower productivity, increasing healthcare costs and operational challenges that can reduce GDP by up to 1.3% annually in heavily affected regions. Given the $126.9 billion in untapped GDP waiting to be unlocked through malaria elimination, prevention represents a significant economic opportunity hiding in plain sight.

Investing in climate-resilient health infrastructure is effectively an investment in long-term economic productivity. By mid-century, Africa will represent a significant share of the world’s labor force, so protecting this workforce will be increasingly essential for global economic growth. And on a local level, maximizing these workers’ health is simply a smart investment for African economies. Climate-health investments can generate measurable outcomes: reduced disease incidence, lower mortality, improved labor productivity and fiscal savings. The United Nations Economic Commission for Africa estimates Africa’s health infrastructure financing gap at $66 billion annually, and the Climate Policy Initiative estimates that climate adaptation needs exceed $50 billion per year. These represent a substantial market gap for both public and private sector funders, driven by demographic and workforce expansion, rapid urbanization, and rising climate volatility that will continue to increase demand for resilient and adaptive health systems.

Whether it’s solar electrification that mitigates against healthcare facility downtime, climate-smart surveillance or early-warning systems that contain disease outbreaks, or resilient supply chains that avoid disruption to critical health commodities, climate health investments help manage broader macroeconomic risk and systemic shocks, avoiding everyday economic disruption and larger GDP contractions. For individuals, this means improved continuity of care. For governments, this means more productive economies. For investors, this means lower investment risk due to stronger economies and health systems.

Growing integration across the climate, energy and health sectors

Many African governments have started integrating climate resilience into national health infrastructure planning and budgeting. This has been complemented by strategic initiatives, such as The Rwanda Clean Cooking Results-Based Financing Initiative, an instrument designed to support private clean cooking companies in promoting the sale and sustained use of these technologies. Since 2021, the program has contributed towards meaningfully improving household air quality and respiratory health. It is also projected to generate approximately Rwf 27 billion in carbon credit revenues by the end of 2026, and has engaged 20 companies to distribute stoves and liquid petroleum gas systems to over 460,000 households.

Various donors and multilaterals have continued to invest as well. For example, healthcare facility electrification has increasingly been a focus of Sustainable Energy for All’s work with development partners and local governments, and last year, the Swedish Government and Clinton Health Access Initiative launched a new partnership for the electrification of healthcare facilities across South Africa, Eswatini, Malawi and Kenya.

Some promising climate-health business models and innovations have also successfully emerged in recent years, like Zipline, which delivers medical supplies to the last-mile through low-emission, cold-chain friendly and rapid-response drones, and Koolboks, which sells solar-powered cold storage products to preserve vaccines (and other temperature-regulated goods) in off-grid environments.

But while this momentum is encouraging, these efforts are not nearly integrated enough.

While donors and governments increasingly recognize that climate resilience and health outcomes are deeply intertwined, most interventions classified as “climate-health” remain siloed and weighted toward one sector or the other. These initiatives should accord equal priority to both climate and health outcomes, but when they are managed by climate-focused organizations or agencies, they often relegate health to a secondary outcome, and when they’re organized by health-focused entities, they rarely embed climate adaptation into their program design.

Additionally — and more importantly — these programs often have a limited focus on local private sector development. For local governments to develop sustainable climate-resilient health infrastructure, they must find ways to strengthen the private sector and crowd-in capital. This will require better-designed public-private partnerships, in which innovators, technologies and supply chain partners more effectively complement public priorities. That will only be possible when capital providers such as impact investors, institutional investors, banks and blended finance structures have access to strong investible pipeline opportunities that create clear impact in the broader health system.

Yet despite the limited capacity of health systems to adapt to changing climate conditions, there is insufficient support available to the private sector, particularly local climate-health enterprises, to help drive innovation and scalable solutions. To take one example, the current incubation and acceleration ecosystem is often not designed to support enterprises operating at the intersection of climate and health. As a result, these businesses remain underdeveloped and struggle to move from proof-of-concept to viable scale. They need access to deep sectoral expertise that keeps pace with rapidly emerging climate health approaches and technologies, and connections with likeminded peers and partners, along with tailored long-term support from patient capital providers that understand the social impact and financial opportunity that climate-health solutions represent.

Looking Forward: What’s needed to develop the ecosystem for sustainable climate-health investments?

As climate change is primed to worsen in the coming years, it’s clear that health systems must evolve. The case for action is strong: Africa’s population is rapidly growing, climate-related events continue to intensity health risks, and climate health investments can help manage the broader macroeconomic risks and systemic shocks the continent will surely face. But doing so will require increasing the capacity of both the public and private sectors. It will require a systemic lens and ecosystem-focused approach that will make capital more catalytic, create stronger and fairer market forces, and foster collaboration between stakeholders across the climate health value chain.

The opportunity is now to build the market, define opportunities and catalyze strategic partnerships. While countries and regions are likely to have different approaches, given the variance of climate-related impacts, several elements need to be present in these solutions. Africa needs dedicated climate health investment vehicles, a better framework to leverage carbon credits, stronger data and policy infrastructure and frameworks, and an accelerated pipeline of credible innovations that reach remote areas and move beyond the Silicon Savannah. Additionally, the continent needs:

• More context-specific support for business models and innovations that address climate-health risks: This could be accomplished by developing dedicated support platforms that meet multiple needs, like knowledge sharing, incubation/acceleration and investment, or by creating new investment windows that specifically support enterprise building (knowledge, skills, networks) and investment pipeline generation, especially in underrepresented regions like West and Southern Africa. This would include tailored end-to-end support for promising business models and innovations, targeting the overlooked space where stronger health systems, climate adaptation and resilient local markets intersect.
• Structured capital that enables investments, and that is accessible at scale: This could be accomplished by approaching climate-health as a dedicated asset class in which different investments have common characteristics, like similar underlying assets and risk-return profiles, repeatable deal structures for investors, and replicable assessment frameworks and measurable outcomes. This could help create a common language and positive signals that would begin to crowd-in investor participation and scale investments in the space. Additionally, creating new blended finance structures would allow for co-participation between local governments and private sector businesses in building climate-resilient infrastructure. To that end, the Climate and Health Funders Coalition’s US $300 million commitment for integrated climate health action, Grand Challenges Canada’s CAD $6.3 million seed funding to 42 climate health innovations, and the US $50 million Climate and Health Catalytic Fund are promising steps in the right direction.
• Market shaping that helps build the investment case: This could be accomplished by structuring public-private partnerships that address market gaps or that anchor advance market commitments for climate-health products, or by building the evidence base of climate-health innovation, to help prove-out social and financial impacts on local economies.

In today’s world, climate-health is not a secondary theme. It is a critical and strategic investment frontier that needs sufficient attention and action. The question is not whether Africa’s health systems must be climate-resilient, but how this resilience will be structured at scale.

Dr. Rajat Chabba is Senior Director of Innovation and Partnerships at The William Davidson Institute at the University of Michigan.

Martin Slawek is Associate Partner at Open Capital Advisors and leads its healthcare practice.

Photo credit: pcess609

Entrepreneurship support across LMICs has not been immune to these challenges, as much of this work has historically been financed through donor- and publicly funded programmes. But in many cases, these shifts have not created wholly new pressures so much as exposed how heavily many entrepreneurship ecosystems depend on underlying support functions that are difficult to fund, coordinate and sustain — and that are becoming more so under tighter fiscal conditions.

In response, entrepreneurship support organisations (ESOs) are increasingly absorbing these functions. As consultants, both of us have worked extensively in support of ESOs and wider business environment reform initiatives across Africa, including through our advisory work with the EU’s Investment Climate Reform Facility. Consulting rarely offers foresight, but it does offer early signals, since the work changes as demand shifts. For us, those signals have provided some stark insights into how entrepreneurship ecosystem-building work is being reshaped in emerging markets. That vantage point has offered a view of how these ecosystems are adjusting to the new fiscal reality — and where strain is beginning to show.

The article that follows is not a set of predictions or prescriptions. Rather, it reflects on what sustained uncertainty is revealing about what entrepreneurship ecosystems now rely on, and about the functions ESOs are increasingly being required to sustain if those ecosystems are to function.

Uncertainty has become structural for ESOs in emerging markets

ESOs routinely operate in volatile conditions, particularly in emerging markets. In many of these countries, uncertainty is a common condition rather than an exception. For a long time, however, that volatility was at least partially buffered. Even fragile ecosystems had some predictability, including donor funding cycles, policy signals and institutional backstops that allowed organisations to plan, adapt and recover.

What feels different now is that those buffers have thinned.

The effects of 2025 have been less a drastic change of course, and more an acceleration of the changes we had already been witnessing. Rather than a single disruption, recent years have surfaced a gradual change in ecosystem operating conditions which 2025 amplified: Funding is more uncertain, priorities are less clearly signalled, regulatory environments are less predictable. Likewise, market and venture cycles have become harder to anticipate, while political and platform-related risks (for example, issues with payment platforms, online marketplaces and other digital intermediaries) have become more pronounced for founders.

Together, these shifts have shortened planning horizons and made uncertainty a more persistent, structural condition.

Ecosystem performance depends on collective functions increasingly handled by ESOs

When entrepreneurship ecosystems perform well, it is rarely because of any single programme or intervention. This has always been true. An ecosystem’s performance depends on collective functions such as coordination across founders, funders and support organisations; trust and legitimacy between actors; shared standards around venture quality and investment readiness; effective information flows; and a collective voice to engage governments, regulators and platforms.

These functions generate benefits that spill across organisations and actors. They are difficult to price, own or attribute to a single implementer or funder. In economic terms, they behave like collective goods: Everyone benefits from them, but no single actor can easily sustain them alone.

What the past year has shown is not the importance of these functions — that was already understood — but the extent to which they are now being absorbed and carried by ESOs.

In practice, these functions have rarely been funded as standalone activities. Instead, they have typically been sustained through long-term donor programmes, ecosystem convening platforms, intermediary organisations, and the flexibility within grants that allowed coordination, trust-building and information-sharing to take place alongside formal service delivery.

The functions themselves have not disappeared, but they have become harder to sustain in the ways they were previously supported across the ecosystem. As a result, they are becoming more concentrated within ESOs — not because this is efficient or intended, but because these organisations sit closest to entrepreneurs’ operational gaps and face high reputational and mission costs if they step away.

Many ESOs have long carried elements of this work alongside their programmes, but they are now doing so more extensively. Along with their usual activities, they act as intermediaries between founders, funders, markets and governments — interpreting unevenly applied rules, brokering credibility where formal signals are weak, and smoothing disputes where no reliable mechanisms exist.

These are not peripheral activities; they are essential to keeping entrepreneurship systems operating under sustained uncertainty. Yet this institutional role — now being held by many ESOs — is rarely named, formally mandated or priced into ESO funding.

Amplifying entrepreneurs’ collective voice is key to ecosystem maintenance

One area where this shift has become particularly visible is in how the collective voice of entrepreneurs — often channelled through ESOs — now functions within ecosystems.

Even before 2025, ESOs were increasingly drawn into policy and regulatory engagement in response to recurring issues like licensing, taxation, digital regulation and platform rules that individual entrepreneurs could not easily address alone. Donor programme requirements around “enabling environments” also codified and legitimised this work, formalising a function that was already emerging in practice.

What 2025 has changed is the optionality of this role for ESOs: Engagement with policy, regulation and platforms has shifted from an occasional intervention to an ongoing system service. This is not advocacy in the narrow sense. It is operating environment maintenance: the continuous work of keeping rules intelligible, risks manageable and feedback loops open as conditions change. This role is becoming more explicit in practice, with initiatives such as Youth Business International’s new Strategic Advocacy and Influencing for ESOs course pointing to a more deliberate focus on ESOs’ role in policy and system-level engagement.

When that work is less consistently sustained, the effects are cumulative rather than dramatic. Rules drift away from operational reality, uncertainty builds and the cost of doing business rises across the ecosystem. This work has always been difficult to fund directly, and has typically been sustained within broader programmes and more flexible funding arrangements. As those arrangements tighten, that equilibrium begins to break down, even as the need for this work grows.

Fragmentation of services as a rational response

Highly specialised, bespoke support has long been a strength of ESOs in emerging markets. That has not changed. What has changed is the feasibility of sustaining the joint work that allows specialisation to extend to the ecosystem level.

For specialisation to work across organisations, coordination is required — not as something that can be sustained through goodwill alone, but as ongoing, practical effort. Maintaining activities such as shared referral pathways between ESOs, and the handoff of relevant information to founders and funders, takes time and resources. These investments reduce friction for founders and benefit the ecosystem as a whole, but they only deliver limited (and often uncertain) returns to any single organisation.

Under tighter funding conditions, it is therefore rational for ESOs to prioritise activities with clear ownership — those that are explicitly assigned or attributable to them — and more immediate payoff in terms of results they can demonstrate. Fragmentation, in this sense, is not accidental: It is a predictable response to the incentives now in play.

As a result, the costs of this shift are surfacing at the system level: Founders face higher search costs, ESOs duplicate efforts, and knowledge travels less easily across the ecosystem as coordination across specialised services weakens.

What needs to change to build stronger entrepreneur ecosystems in LMICs

If the diagnosis above is correct, the next phase of entrepreneur ecosystem building in LMICs cannot be about adding more programmes. It needs to focus on deliberately stabilising these ecosystems — addressing the binding constraints that now determine whether markets function under uncertainty.

For ecosystem builders and ESOs, this requires a shift from “doing more” to “doing what holds” — i.e., sustaining the functions and relationships that allow ecosystems to operate.

First, ecosystem work needs to move away from building ecosystems in the abstract, and toward managing the interdependencies that determine whether markets function effectively. In emerging markets, failures do not remain local: They cascade across capital providers, regulations and markets — and the platforms and infrastructure through which they operate. The focus therefore needs to be on identifying where these failures propagate, such as procurement and compliance bottlenecks, dependence on digital platforms for payments or market access, and areas of heightened founder exposure to regulatory, platform and market risks. The aim is to contain how disruptions spread, preventing small shocks from becoming wider system failures.

Second, broad-based ecosystem coordination efforts need to be grounded in more selective, rule-bound commitments. Open-ended convening and alignment exercises — such as multi-stakeholder workshops, ecosystem mapping initiatives or donor-led coordination forums that do not result in binding commitments — are increasingly costly and fragile. What reduces uncertainty now are smaller agreements, typically agreed and implemented jointly by ESOs, funders and relevant public partners, that consolidate activity and that actors can rely on. This might include, among other strategies, procurement compacts, referral recognition rules or compliance fast tracks. These commitments help introduce greater predictability into uncertain markets, allowing business and investment activity to continue even as trust and resources thin.

Third, ecosystem builders need to ensure that, under sustained uncertainty, the actors and processes others rely on remain credible and consistent — recognising that this uncertainty impacts not just new entrepreneurial pilots or programmes, but the ability of actors to make decisions and act with confidence within the ecosystem. Ecosystems rarely fail for lack of ideas. They begin to struggle when actors can no longer reliably assess how decisions are made, who can be trusted to convene and broker, or what counts as credible within the system. That matters because ESOs’ ability to play these roles depends on being seen as consistent, independent and reliable in how they operate. When that weakens, even well-designed interventions become harder to sustain when conditions change.

Fourth, the way much ecosystem work is currently funded has not kept pace with what ecosystems now require to function. Much of this remaining funding is organised around discrete services and outputs, even as ESOs are increasingly holding together the coordination, intermediation and risk management that allow ecosystems to operate. The question is therefore not only who pays for services, but whether funding is reaching the parts of the system that need to hold as conditions change. In practice, this points toward a need for funding that supports continuity — helping to maintain market access, limit how much risk is pushed onto founders, and keep these core functions running alongside programme delivery.

Finally, the collective voice of entrepreneurs — often amplified through ESOs — is taking on a different role within ecosystems. In ecosystem work, this role was often framed primarily as advocacy, e.g., influencing rules or securing reforms. Under today’s sustained uncertainty, that framing is no longer sufficient. This work increasingly functions as part of the system’s feedback and stabilisation structure — helping to surface risks, interpret shifting conditions and reduce entrepreneurs’ exposure as policy, regulatory and platform environments evolve. Success is therefore measured less by whether an entrepreneur mobilisation or regulatory reform effort was successful, and more by how effectively ecosystems reduce entrepreneurs’ exposure to sudden shifts. This, in turn, depends on maintaining continuous channels of communication with regulators, policymakers and platform operators, so that emerging risks can be identified and managed before they become wider constraints.

In conclusion: As funding dries up and uncertainty becomes structural, entrepreneurship ecosystems increasingly rely on collective functions that are hard to finance, govern and sustain — but that are also essential to businesses’ performance. ESOs have absorbed much of this burden in practice, holding systems together informally under growing strain. The question for the coming years is not whether this work continues, but whether it remains implicit and under-funded — or becomes deliberately shaped, financed and governed as part of ecosystem infrastructure.

Authors’ note: The views expressed in this article are those of the authors and do not necessarily reflect the views of the EU Investment Climate Reform Facility.

Stephen Hunt is a senior consultant with nearly 15 years’ experience working on entrepreneurship development, inclusive economic reform and start-up ecosystems across Africa, Asia and the UK.

Nelson Okwonna is a strategy and development advisor with over 15 years’ experience delivering MSME competitiveness, access-to-finance, transaction advisory and enterprise cluster programmes across Nigeria and Africa.

Photo credit: ilkercelik

In response to this gap, policymakers, donors and insurers have increasingly turned to what is often referred to as “inclusive insurance” — i.e., products designed to reach low- and middle-income populations that traditional insurance models have struggled to serve.

However, in practical terms, inclusive insurance is too often approached as a scaled down or charitable version of traditional insurance meant for very poor populations. In reality, it represents a fundamentally different business model with distinct product design, processes, distribution and economics.

Without recognising this distinction, well-meaning initiatives will continue to underperform, donor-funded pilots will continue to fade, and insurance will remain distant and often irrelevant to non-consumers in emerging markets.

Inclusive insurance is Not ‘Traditional Insurance Downsized for the Poor’

One of the most persistent misconceptions in the insurance industry is that inclusive insurance is simply a subset of traditional insurance. Insurers who do not regularly deal with inclusive insurance may simply refer to it as “small ticket business”: often an NGO-style business with lower premiums and smaller sums insured. For these clients, insurers might slap images of a farmer or cab driver on marketing materials, translate the policy into the local language and consider the job done. This thinking is deeply flawed.

Conventional insurance in emerging countries generally replicates existing practices from developed markets, focusing on low-frequency, high-severity risks faced by a niche, relatively wealthy clientele. It assumes formal employment, stable incomes, proper documentation, financial literacy and patience for complex processes. The typical conventional insurance policyholder can absorb small losses and only insures themselves for big ones.

For inclusive insurance targeted at excluded populations, the risk profile is almost the inverse. In my experience, these are households earning between $4 and $30 a day, which face frequent, low severity risks, such as a short-term hospital stay, a stolen mobile phone or motorbike, the loss of cattle, or a deficient crop yield. Individually, these events may seem insignificant, but their impact on a vulnerable household can be devastating. The loss of assets or a week without income can push affected households into debt and a long-term cycle of economic struggle. When viewed cumulatively at the community or national level, these events can hamper economic growth by gradually sapping the health, wealth and productivity of workers and consumers.

Trying to retrofit legacy products, processes and models into this context almost always leads to a mismatch. Conventional insurance business models often feature products, processes and pricing models that have barely evolved in decades. This insurance is typically viewed as unaffordable, unavailable and inaccessible for buyers outside its mainstream target market, and it does little to address the immediate and everyday uncertainty they experience. What is needed instead are purpose-built monoline products that focus on one clearly understood risk at a time, delivered through “lean” processes and supported by technology to enable large-scale adoption. For example, such a product might cover the risk of death, and be delivered via an app or even a text message, requiring just a simple yes/no click to opt-in.

But importantly, inclusive insurance is not charity or corporate social responsibility by another name. I have seen numerous NGO-run, subsidised schemes that provided short-lived relief only to disappear once external funding ended, leaving behind no trust, no infrastructure and no habit of insurance use. Viewed as a business in itself and done properly, inclusive insurance is a commercial proposition that relies on scale, data and the law of large numbers to drive accurate pricing.

A different business requiring a different approach

Inclusive insurance is not just a product challenge; it is an entirely different business model, often operating within informal economies, low literacy environments and complex cultural contexts. Understanding these operating contexts is one of the key ingredients to successfully building a scalable and profitable inclusive insurance business.

Several myths persist when it comes to providing inclusive insurance in LMICs. One is that insurance’s complexity as a product requires it to be (aggressively) sold rather than (voluntarily) bought. Another is that it’s always about the price: the lower the price, the higher the take-up. And another is that distribution alone drives success, and other components of delivery are not essential.

The shifting landscape in these markets has made each of these beliefs outdated.

Nowadays, people in emerging markets engage confidently with digital services. Mobile money, e-commerce platforms, and ride-hailing and social media apps have achieved mass adoption among users with limited formal education. For example, a recent GSMA report states that there are now over 2 billion registered mobile money accounts worldwide, with usage growing for payments, savings, transfers and more. One reason for this uptake is that the providers of these services made their products and processes accessible to the target market rather than expecting consumers to self-educate. A similar approach can be applied to insurance. I have reviewed successful non-insurance digital financial products in LMICs and found four common themes: These products are easy, relevant and fulfilling, and they offer good value for the money. When we applied these themes in our inclusive insurance work at MicroEnsure, my colleagues and I were able to scale insurance to first-time buyers in the same emerging markets that had adopted non-insurance digital services, without the need for aggressive sales tactics.

Customers’ perception and insurers’ processes around claims are a point where the difference between traditional insurance and inclusive insurance becomes most visible. In inclusive insurance, price is often less important to customers than the reliability and ease of the claims process. As a result, for insurers, claims are not merely a loss or at best a cost to be contained: They are a way to build trust. A timely and transparent payout, especially in a community setting where people have limited experience with insurance, can quickly inspire awareness and trust. One positive claims experience, as I have seen in my experience marketing inclusive insurance, can generate dozens of new customers through word-of-mouth, and providers can further amplify this by promoting claim stories on social media. In this context, high-volume, low-value claims serve as a growth engine.

Finally, insurers whose distribution approaches ignore end-to-end delivery often struggle — even when working with large consumer brands to facilitate greater reach. This sort of partnership has been successfully leveraged in traditional insurance, for instance, when mainstream insurers partner with banks to sell policies to their wealthy customers, with the bank — a financial “supermarket” — viewed as the distributor, and minimal sales tactics and follow-up required by the insurer. It is also a common feature of inclusive insurance, as seen when insurers partner with telecom operators to offer products to their millions of subscribers. But in this sort of partnership, when done correctly, the telecom operator is not a distribution channel but a delivery partner. Delivery goes beyond distribution: Effective delivery requires continuous collaboration for customised products and user journeys, data analytics and insights, joint education and awareness campaigns, multiple distribution channels, and clear post-sale engagement. This matters because misunderstanding the difference between delivery and distribution is the most common reason why insurers fail to scale their partnerships with telecom operators. If an insurance provider signs a partnership with a telecom operator and views it as a passive distribution channel rather than an ongoing, joint effort to provide end-to-end delivery, it will likely struggle to get meaningful sales.

Technology as an enabler to scale

For inclusive insurance, technology can be the single most important enabler because it fundamentally alters the economics of scale. Telecoms, digital platforms and mobile money ecosystems, each serving tens of millions of users, offer strong infrastructure for insurance enrollment, premium collection and communication. The post-COVID acceleration of technology adoption has only reinforced this shift, making digitalisation the foundation for large scale adoption.

More importantly, technology — especially emerging technologies like AI or blockchain — enables new and unconventional forms of insurance interventions. On-demand insurance, usage-based pricing and parametric triggers turn insurance into a tangible, dynamic and timely service. For the largest and fastest-growing buyers group, digitally-native youth represented by Millennials and Gen Z, this creates the opportunity to reposition insurance from an uncertain “if” to a practical “when.”

Yet despite these innovations, inclusive insurance in emerging markets cannot scale in isolation. Collaboration with insurers in developed markets is essential, as they have more experience and knowledge in the sector. But too often, Western insurers approach emerging markets with a replication mindset, exporting their usual products, models and assumptions, regardless of whether they fit the local contexts. The result is poor uptake, low scale and eventual withdrawal — along with a missed opportunity to treat insurance inclusion as a long-term commercial business venture.

Opportunities for synergies are strong. Micro-insurer licences with small capital requirements in many jurisdictions provide an entry point for experimentation and learning. Partnerships with local players offer mature firms contextual insight. And the global reinsurers that play a key role in providing the underwriting capacity for inclusive insurance gain access to diversified risk pools and invaluable data about underserved populations. These partnerships also enable capital from developed markets to bridge the gap that LMIC-based insurers face between short-term pilots and sustainable scale over the mid- to long-term.

The opportunity, therefore, is mutual: Emerging markets insurers gain attention, technical expertise and capital, while their partners in developed markets gain better insights, growth, diversification and relevance in a changing global risk landscape.

Turning lessons into action

Inclusive insurance is not a niche, nor is it a temporary experiment. It represents the future of insurance in a world where billions confront climate volatility, health shocks and income insecurity. I have seen multiple models and products work in different markets, and multiple successful pilots. The challenge now is to connect these efforts, align incentives and scale them with intent. If we do, inclusive insurance can move from the margins to the mainstream, strengthening households, markets and economies in the process.

Progress will depend on three shifts:

• First, recognise inclusive insurance as a significant opportunity requiring a unique approach;
• Second, use technology to reduce friction and build trust rather than merely digitising old processes; and
• Third, foster genuine collaboration between emerging and developed markets to co-create solutions, rather than simply replicating solutions because they worked in a different context.

For entrepreneurs and insurers, this means starting small, learning fast and scaling patiently. For policymakers, it entails viewing insurance as an item of infrastructure, and embedding it into broader social protection and resilience frameworks. Finally, for global insurers and investors, it means engaging with emerging markets as partners in innovation.

Rehan Butt is the Founder and CEO of Instaful Solutions.

Photo credit: PeopleImages

Over 1.3 billion people in developing economies are between 18 and 35. In sub-Saharan Africa and South Asia, the median age in some countries is in the teens or low twenties. Across regions, young adults are more likely than older cohorts to start businesses. This is not a marginal segment that the development sector should try to reach with add-on services. In every way, youth is the economic centre of gravity of the Global South.

And yet, financial systems were not designed around the realities of youth. Most young people in emerging markets enter adulthood navigating unstable income, informal work, incomplete education, limited assets and weak safety nets. They move between dependence and independence. They experiment with livelihoods. They take risks. They absorb shocks. Their financial lives are fluid and transitional. Young people are navigating some of the most consequential transitions of their lives — often with limited support, few buffers and little room for error. Moving from school to work, from dependence to independence, from aspirations to reality: These moments shape not only individual futures, but the social and economic trajectory of communities and entire countries.

As a result, youth is best understood as a phase of transition or movement rather than a fixed category — and financial needs shift as young people move through different stages of life.

Coming of Age in a Time of Uncertainty

Further increasing the complexity of these transitions, today’s youth are coming of age in conditions of increasing uncertainty. Demographic bulges across the low- and middle-income world mean young people are entering the workforce in numbers that formal employers cannot absorb, while competing for finite support and resources. Employment is irregular. Income is uncertain. Technology is transforming the livelihood landscape. Climate shocks, health events, migration, conflict or family obligations can disrupt plans overnight. Informal coping mechanisms — whether they involve family support, savings groups or ad hoc borrowing — remain essential, but are often stretched thin.

But traditional products and banking practices — e.g., rigid credit, high minimum balances, collateral-heavy lending and slow onboarding — are poorly matched to this reality. The result is predictable: Like older adults, young people also use financial tools, but not always formal ones. They save in groups. They borrow from their family. They rely on trust networks rather than institutions. Digital channels are growing fast, but digital-focused client protection, youth-tailored savings, and loan products designed for clients’ evolving needs in key stages of life remain limited.

A Market Segment with Diverse Financial Needs

What’s more, youth is not a monolithic segment of the financial services market. An 18-year-old rural agricultural worker with seasonal income has profoundly different needs from a 24-year-old urban gig worker. A young woman starting a home-based enterprise fresh out of secondary education faces different constraints from an established, 30-year-old small business owner. A migrant worker sending remittances operates under a different risk profile than a university graduate entering formal employment.

Even within the broadest age range that can define youth, 18-35, the transitions are significant: Late adolescence involves education, first income and initial financial independence. Early adulthood often brings labour market entry, entrepreneurship, migration and family formation. And late youth or the next stage of adulthood might involve: business expansion, asset acquisition, buying a home, stabilising income and managing dependents. Each stage carries different financial behaviours, risk exposure and opportunity.

Moreover, young men and women often experience these stages differently. Too often, young women have less control over resources, more limited mobility and greater exposure to unpaid care responsibilities. Gaps in financial access often open early and widen with age; indeed, young women and men’s access to and usage of financial services remain even until their late teens, but then markedly diverge around the age of majority. And rural youth face particular challenges: limited infrastructure, reliance on seasonal or agricultural income, weak access to markets, and few formal assets. Informal finance, savings groups and value-chain arrangements often play a central role in how they manage money and risk.

The opportunities for the inclusive finance sector to better serve young people — to “unlock youth-inclusive finance” — are immense. To that end, e-MFP and its partners are pleased to launch the Luxembourg Award for Inclusive Finance (LAIF) 2026, formerly known as the European Microfinance Award, on the theme of “Unlocking Youth-Inclusive Finance.”

The Luxembourg Award for Inclusive Finance (LAIF) 2026 on Unlocking Youth-Inclusive Finance

The Luxembourg Award for Inclusive Finance 2026 will highlight organisations active in financial inclusion that accompany young people as they navigate life’s key stages, helping them develop skills and seize the opportunities needed to build a prosperous future.

The evaluation teams are excited to see what applicant organisations are doing. On the financial side, this may include safe and accessible savings options for early stages; flexible credit for education, enterprise or productive assets as livelihoods take shape; and, in some contexts, insurance or other risk-sharing mechanisms that help young people absorb shocks without derailing progress. On the non-financial side, support may involve financial capability building, livelihood or entrepreneurship skills, mentoring, or guidance linked to specific life moments — such as entering work, starting a business or managing income volatility.

Whatever the approach, it will be important for applicant organisations to demonstrate understanding of a specific youth segment and to design a combination of services that meet youth where they are, prepare them for their next life stage and accompany them as they develop into adults.

The grand prize is €100,000, with two runner-up awards of €10,000 each. The winners will be announced at a ceremony at the European Investment Bank in November, during the Inclusive Finance 26 (IF26) conference. Beyond the prize money, shortlisted organisations benefit from international visibility, sector recognition and the opportunity to share their work with a global audience at IF26.

Applications are welcome in English, Spanish or French. Eligible applicants may include microfinance institutions, banks, cooperatives, fintechs, non-bank financial institutions and other organisations providing inclusive financial services — directly, or in partnership with others. For detailed information about eligibility criteria, the evaluation process, application timelines, guidance, benefits for semi-finalists and finalists, and more, please visit the new Luxembourg Award for Inclusive Finance site: www.inclusivefinanceaward.lu.

Finally, to support potential applicants, e-MFP will host online guidance sessions explaining the theme, eligibility criteria and application process. These sessions will provide an opportunity to clarify questions and ensure submissions align with the Award’s focus. Sessions will be offered in English at 10:00 CET on March 25, Spanish later that day at 16:00 CET, and French at 16:00 CET on March 26.

Round 1 of the application process closes on April 12 at 23:59 CET. The Award organisers are looking forward to hearing from many and varied organisations innovating in this most important field.

The Luxembourg Award for Inclusive Finance was launched as the European Microfinance Award in 2005 by the Luxembourg Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade. It is jointly organised by the Ministry, e-MFP, and the Inclusive Finance Network Luxembourg (InFiNe.lu), in cooperation with the European Investment Bank (EIB).

Sam Mendelson is Financial Inclusion Specialist at e-MFP and part of the design and evaluation team for the LAIF2026.

Tim Nourse is CEO of Making Cents, and is supporting e-MFP in the design and implementation of the LAIF2026.

Photo credit: The Yudel Media

Household-level electrification efforts matter. Electricity access improves health outcomes, supports education and reduces vulnerability, among other positive impacts. But household access alone does not drive economic transformation or job creation: To accomplish those goals, industrial and commercial access is necessary.

Some analysts argue that Africa can advance both of these priorities at once — as Alba Topulli at CLASP and Todd Moss at the Energy for Growth Hub did in their recent NextBillion article cautioning against the “false trade-offs between ensuring initial residential access and powering business activities.” In practice, however, maintaining this dual focus may not be realistic, given the continent’s current grid limitations and constrained public resources.

This dynamic can be seen in electrification policies and programmes across Africa, which continue to use household electricity access as the primary metric for tracking progress toward Sustainable Development Goal (SDG) 7. As a result, less attention is often given to strengthening the transmission and distribution infrastructure needed to support large and reliable industrial loads.

If Africa is serious about industrialisation, export competitiveness and job creation, electricity policy must evolve to prioritise productive use, particularly in industrial and agro-processing hubs where economic value is created. Below, I’ll explore why this shift is necessary, and how the continent’s energy access plans and investment strategies could better enable access to productive and industrial electricity.

Why Access Alone Is Insufficient — Especially for Industrial Use

Africa’s energy access gap remains severe. Nearly 600 million people still lack access to electricity, representing the largest unelectrified population globally. This statistic understandably dominates development discourse. For governments, expanding access is politically visible and socially impactful. For donors, it offers a clear, measurable outcome. However, focusing on statistics around electricity access often obscures the arguably more important factors of the quality and usefulness of electricity once a connection exists.

In many African countries, households and businesses that are technically “connected” experience frequent outages, voltage instability and supply rationing. Electricity may be available for only a few hours a day or disappear entirely during peak demand periods, offering limited economic value. Indeed, around 71% of firms in sub-Saharan Africa report experiencing electricity outages, according to data from the World Bank Enterprise Surveys.

For countries attempting to ensure more reliable access, the distinction between households and businesses matters, because electricity for consumption and electricity for production are fundamentally different. A household light bulb, phone charger or fan requires minimal, intermittent power. An industrial production line requires continuous, high-capacity, stable electricity. Treating both needs as interchangeable leads to power systems that meet neither well.

For industrial and commercial users, unreliable electricity is not just a nuisance — it is a binding constraint on productivity. Across Africa, firms routinely cite power outages as one of the top obstacles to doing business. When power fails, factories halt production, raw materials spoil, machinery is damaged and delivery deadlines are missed. These disruptions raise operating costs and weaken competitiveness, particularly in export-oriented sectors where reliability and timing are critical.

Empirical evidence reinforces this reality. Studies show that electricity outages have a statistically significant negative impact on firm productivity and national output in sub-Saharan Africa. For instance, an analysis of power reliability across the region’s economies estimates that a 1% increase in the duration of power outages is associated with a roughly 2.86% reduction in gross domestic product (GDP), translating into an estimated loss of roughly US $28 billion in economic output across the continent.

Faced with unreliable grids, many firms invest in self-generation using diesel or heavy fuel oil. Data from the World Bank Enterprise Surveys show that even in countries with high access rates, African businesses still rely heavily on self-generation due to poor reliability and overloaded distribution networks. Although this ensures continuity, it comes at a steep cost. Self-generated power often costs almost four times more than grid electricity, and exposes firms to volatile fuel prices. The result is a vicious cycle: High energy costs reduce profitability, discourage reinvestment and limit expansion. Over time, this suppresses industrial growth, job creation and tax revenues, undermining the very development objectives that household electrification programmes seek to achieve.

Industrial Power as the Foundation of Structural Transformation

For countries to achieve large-scale industrialisation, they must first secure reliable power for production. A large body of empirical research shows that electricity provision plays a critical role in industrial development and economic transformation. For example, studies using historical data from India demonstrate that improvements in electricity infrastructure significantly increased industrial output and manufacturing growth, highlighting how reliable power supply is a key enabler of industrial activity.

Africa’s challenge is not a lack of energy resources. The continent is home to around 60% of the world’s best solar potential, alongside abundant hydro, gas and wind resources, yet it continues to generate only a small share of global electricity. Thus, the problem lies less in the availability of energy supplies, and more in how power systems are planned, financed and regulated.

This disconnect is visible across multiple African power systems. In South Africa, for example, decades of underinvestment in transmission and maintenance, combined with a tariff regime that steadily raised prices for industrial users, have resulted in chronic load-shedding — i.e., the deliberate and temporary shutdown of electricity supply to different areas of the grid when demand exceeds available generation capacity. These tactics have disproportionately harmed manufacturing and mining operations: Despite relatively high electrification rates, firms have faced rolling blackouts that have reduced output and discouraged investment. In 2023 alone, exceptionally high load shedding reduced South Africa’s economic growth by an estimated 1.5 percentage points, underscoring how access without reliability undermines productive growth.

A clear illustration of this disconnect can also be seen in Nigeria, where over the past decade, electrification efforts have prioritised expanding customer connections while the transmission grid has remained weak and unable to reliably deliver electricity to users. Nigeria’s transmission infrastructure is widely considered one of the weakest links in its electricity value chain, with aging assets and persistent bottlenecks limiting the amount of power that can be delivered. Despite having over 13,000 MW of installed generation capacity, Nigeria typically delivers less than 5,000 MW due to transmission and distribution constraints, forcing industries to rely on self-generation.

Meanwhile in Kenya, electrification has expanded rapidly, but industrial users continue to cite high tariffs and unreliable supply as key constraints. Residential access has increased significantly over the past decade, yet transmission bottlenecks and broader system costs continue to affect the affordability and reliability of electricity for productive sectors. Although industrial tariffs in Kenya are not always higher than residential tariffs, manufacturers still face electricity prices that are high relative to those in competing economies. Industry groups such as the Kenya Association of Manufacturers note that electricity costs in Kenya are among the highest in the region, weakening the competitiveness of manufacturing and export industries.

Together, these cases demonstrate how electrification strategies that prioritise access without aligning power infrastructure and tariff design to industrial policy leave productive sectors underpowered despite widespread grid connections.

What a Productive-Use Electricity Strategy Requires

However, reorienting electricity systems toward productive growth does not mean abandoning household access goals. Instead, it means adopting a more deliberate, economically grounded approach, through measures that include:

Deliberate Powering of Industrial Hubs

Electrification should follow where economic activity is concentrated. Power infrastructure investments are most effective when coordinated with broader infrastructure systems and industrial development zones. Planning electricity infrastructure alongside transport corridors, ports, water systems, digital infrastructure and industrial clusters helps ensure integrated economic development and supports long-term industrial growth. This approach can improve system efficiency and maximise development impact per dollar invested.

Governments should ensure that industrial parks, special economic zones and agro-processing corridors receive dedicated, high-capacity power. This can come from embedded generation, captive power plants or reinforced grid connections supported by long-term supply agreements. Targeted industrial electrification reduces risk for investors and signals policy commitment to production and exports.

Regulatory Reform Focused on Reliability

For industrial users, predictability matters as much as price. Transparent tariff structures, credible cost-recovery mechanisms and clear grid access rules reduce uncertainty for investors and ensure utilities can recover the costs required to maintain and expand electricity infrastructure. This financial viability is essential for improving the reliability of electricity supply, not just increasing the number of grid connections.

Integration of Grid and Distributed Solutions

Distributed energy resources such as solar paired with battery storage can complement grid supply for industrial and commercial users. When properly integrated, these systems can reduce outages, lower long-term costs and improve resilience without undermining utilities.

Regional Power Integration

Regional power pools allow countries to share generation capacity, smooth supply variability and reduce costs through scale. With proper governance and investment, cross-border electricity trade can significantly improve reliability throughout the continent.

The Implications for Policymakers, Donors and Development Partners

For all actors interested in electrifying the region — policymakers, donors and development partners alike — success should be measured not only by access rates but by industrial output, firm productivity and job creation linked to reliable electricity. This will require coordination across actors and a recalibration of priorities. Household electrification often receives greater political attention, and electrification programmes often emphasise household connections because they are visible and measurable. But productive use of electricity delivers longer-term, self-sustaining development gains, and reliable electricity supply to industrial hubs can have a more transformative impact on economic growth.

Investments in industrial power infrastructure, transmission upgrades and market reforms can also crowd in private investment, strengthen public finances and make access expansion more affordable over time. For that reason, focusing on productive use does not undermine broader efforts toward household access. On the contrary, industrial growth creates the jobs and incomes that make universal access financially sustainable. Africa’s demographic trajectory makes this issue particularly pressing. Millions of young people are entering the labour force each year. Without industrial expansion, job creation will lag population growth, deepening economic vulnerability and migration pressures. Electricity alone will not solve this challenge, but without reliable industrial power, no credible solution exists.

Electricity policy in Africa must evolve. Lighting homes improves welfare, and powering industry builds prosperity — both are necessary for the continent’s ongoing development. But for policymakers, funders and other stakeholders looking to maximise the impact of their energy access efforts and address the continent’s most urgent needs, aligning electrification with industrial strategy should be the first priority. For donors, this means placing greater emphasis on productive and industrial electricity use when designing electrification programmes, rather than focusing primarily on expanding household connections. And for businesses, it means more actively engaging with policymakers and regulators to advocate for investments and regulatory reforms that improve electricity reliability for productive sectors.

If Africa is serious about economic transformation, electricity must be treated not only as a social service, but as what it truly is: the backbone of productive growth.

Taiwo Odugbemi is a power sector regulation specialist and economist with a Ph.D. in economics from the University of Abuja.

Photo: Jacob Wackerhausen

Our fieldwork — conducted in December 2024 by a team of researchers from the e-GUIDE Initiative and the Technical University of Kenya — involved surveying roughly 500 households across five informal settlements in Nairobi. The goal was to better understand electricity’s evolving role in everyday energy use, particularly for cooking and boiling, in some of the city’s lowest-income communities. The findings reveal a quiet but growing shift: Households are using electricity not only for lighting and phone charging but also for boiling water to cook, make tea, bathe, and sterilize food and drinking water.

This growing adoption of “e-boiling” is emerging as the entry point for expanding electricity’s role in the household energy mix in these communities, offering new insights into how we can design equitable and inclusive clean cooking programs.

Life, Light and Boiling Water: Electricity in Nairobi’s Informal Settlements

Despite low incomes and overcrowded housing, the findings of our survey show that nearly nine in 10 households in Nairobi’s informal settlements have some form of electricity connection.

But there’s a catch: Most of these are informal hookups that are unapproved by the utility company or flat-out illegal — e.g., wires daisy-chained from a neighbor’s meter that allow nearby households to access their electricity for a fee, or flat-rate deals with a “wireman” who taps into and resells the utility’s electricity before it reaches household meters. But even in these settings, electricity is deeply integrated into daily life.

Nearly a third of connected households — whether they pay a utility for electricity, pay their neighbor for it, pay a wireman for it or don’t pay for it at all — already use electricity for cooking or boiling water. And among them, 95% rely on it primarily for boiling water, according to our (as yet unpublished) survey data. Among these households, about 60% use electricity to pre-boil water for cooking purposes, while about a quarter use it to cook food directly, while the other 15% pre-boil water for non-cooking purposes like treating drinking water and bathing.

Pre-boiling for cooking purposes entails boiling water with electricity, then transferring the water to a different stove to continue cooking food using other fuels such as charcoal, liquefied petroleum gas (LPG) or kerosene. This approach is faster, cleaner and often cheaper, especially for households paying a flat monthly rate for their electricity, regardless of usage. For many, boiling a kettle of water to kick-start a pot of beans or to heat water for bathing is more than convenient — it saves time, reduces smoke exposure, and stretches their already limited budgets for charcoal, kerosene or LPG. An electric kettle can boil water in under five minutes, compared to about 18 minutes with charcoal.

Why E-Boiling Matters: The First Step in the Clean Cooking Transition

Electricity’s foothold in these communities often begins with a single appliance. Most households that cook with electricity own just one low-cost device — typically a kettle, heating coil or immersion rod. We found that electric kettles are the most common appliance, used by about 85% of households that pre-boil water for cooking. Others rely on electric coils (38%) or immersion heaters (26%), depending on what they can afford or find in local markets. For most households, these appliances are part of their everyday routines: Over 90% of users report boiling water with them every day or every other day.

Such simple activities have big implications. By boiling water with electricity, households are already shifting part of their cooking fuel stack toward cleaner energy.

The widespread use of electricity for boiling challenges the assumption that electric cooking is too costly or impractical for the urban poor. In fact, it shows that the clean cooking transition is already underway; it just looks different from what policymakers expect.

When Cost and Convenience Align

The affordability of electricity in informal settlements often hinges on payment arrangements. Many residents pay a fixed amount to a landlord, neighbor or community wireman rather than receiving a metered bill — in fact, our survey found that roughly 80% of households make these flat-rate payments. These informal wiremen are not utility employees. Rather, they are local technicians embedded in the settlement’s informal economy. They typically draw electricity either from a household with a legal metered connection or by tapping upstream of the meter altogether and redistributing it through improvised wiring networks for a fee. The former often operates in a regulatory grey area — where a metered customer informally extends their legitimately purchased power to neighbors and shares costs across multiple users. The latter, however, bypasses metering entirely and essentially involves stealing and reselling electricity from the utility. Both arrangements have emerged in response to insecure tenure, high connection costs and administrative barriers that limit low-income households’ access to formal service. This informal pricing system, while not officially sanctioned and sometimes enabled by the theft of grid electricity, effectively flattens energy costs and makes electricity attractive for predictable, daily tasks like boiling — often offering a lower cost than charcoal or kerosene.

Equally important, the upfront cost of these appliances is low. While high-quality electric cookers remain out of reach — with electric pressure cookers and induction cookers often priced at one to two times the average monthly income of the households we surveyed — basic electric kettles and immersion heaters cost less than $5. Their affordability makes them an easy entry point into electric cooking, even for low-income households. Their simplicity and portability also make them well-suited for small living spaces and shared kitchens.

In many settlements, neighbors even share these appliances, taking turns to use a communal kettle or immersion heater. Our survey found that about 20% of households that own an electric kettle, heating coil or immersion heater share it with one or two other households. These social innovations highlight how low-income communities creatively adapt technology to meet their needs, finding collective solutions even when formal systems leave them behind.

From E-Boiling to E-Cooking: The Next Leap Forward

The key question for clean cooking advocates is: How do we transition these households from e-boiling to full e-cooking?

We argue that pre-boiling water with electricity represents an important entry point for deeper integration of electricity into the household cooking practices of the urban poor, and could stimulate broader e-cooking adoption when supported by an enabling environment that ensures reliable, affordable power, safe, low-cost appliances and user awareness.

From our data, two clear enablers emerge: an electricity payment system that makes usage affordable and predictable, and the availability of low-cost appliances such as kettles, coils and immersion heaters that lower the financial barrier to entry. Together, these factors appear to be stimulating the adoption of electricity for everyday cooking tasks. However, we cannot yet speculate on how access to individually metered connections would alter household behavior or perceptions of the cost of electric cooking.

At the same time, scaling up e-boiling — and potentially e-cooking — could reshape the incentives of these informal service providers who currently provide electricity under flat-rate arrangements. These models have largely worked because household electricity demand has remained relatively low and predictable. If cooking-related loads increase substantially, informal providers may respond by raising fees, restricting appliance use, or limiting high-wattage devices to protect their margins or manage load constraints. In such cases, the agency of households to expand their use of electric cooking could be shaped or constrained by the terms of these informal agreements. Clean cooking advocates will therefore need to anticipate this possibility, ensuring that efforts to promote e-cooking are paired with payment structures and regulatory approaches that protect affordability while supporting higher, sustained electricity use.

What is also evident from our data is that grid infrastructure challenges could be a major barrier to the wide adoption of electric cooking in informal settlements. Frequent outages, poor voltage quality and safety risks shape household confidence in electricity as a dependable cooking fuel. Full electric cooking will depend on higher-power devices that require a stable, high-quality and safe electricity supply that most households simply don’t have yet.

Our field data underscore the scale of these constraints. More than 70% of the households that pre-boil water for cooking reported experiencing power outages while boiling water — disruptions that could discourage reliance on electricity for more demanding cooking tasks. Voltage problems are even more pervasive: Our power-quality tests found that about 70% of households experienced voltage levels below regulatory standards, and over a third reported appliance damage from power surges. Safety concerns add another layer of risk — our wiring assessments revealed that nearly 80% of households lacked grounded connections, exposing users to electric shocks and making them hesitant to operate high-wattage appliances like e-boiling devices.

Overcoming these challenges will require us to meet households where they are, rather than designing programs for where we wish they were. That means improving grid reliability and promoting durable, low-cost appliances. It also means acknowledging informal connections as part of the real urban energy landscape — not as an exception to it — and working with communities to address the structural barriers that limit low-income households’ access to formal service, aligning formal systems with the realities of how people live and use electricity.

Rethinking Clean Cooking Policy for the Urban Poor

In urban areas, electric cooking interventions and campaigns currently primarily target middle-class households that can afford electric pressure cookers or induction stoves. But this focus risks leaving behind millions of the urban poor living in informal settlements.

Our experience from Nairobi is clear: Electricity is already part of the clean cooking solution in these settings. Policies and programs can take a few practical steps to build on what is already working by:

• Recognizing e-boiling as a legitimate and scalable entry point into electric cooking.
• Supporting affordable appliance markets, including safe and efficient electric kettles and small electric cookers.
• Collaborating with utilities to regularize informal connections safely, rather than simply criminalizing them.
• Using data from informal settlements to inform energy planning, ensuring that policies and strategies reflect how people actually use power in resource-constrained environments.

These types of approaches can enable governments and development partners to design more inclusive e-cooking strategies that accelerate real-world adoption, shifting their focus from trying to influence behavior change to creating an enabling environment that organically encourages it.

A Call to Action

If we want universal access to clean cooking by 2030, we must broaden our definition of progress. In Nairobi’s informal settlements, the clean energy transition is not a distant goal; it’s happening every time someone plugs in a kettle.

Recognizing and building upon this foundation could help millions of low-income households leapfrog directly into cleaner, more efficient energy use, one boiling pot at a time.

It’s time for clean cooking programs to look beyond the meter and see the innovation already at work in the world’s most underserved communities.

June Lukuyu is an Assistant Professor at the University of Washington; Nathan Williams is an Associate Teaching Professor at Carnegie Mellon University Africa; Vongaishe Mutatu is a Ph.D. student at Columbia University; Austine Owuor Otieno is a Lecturer at the Technical University of Kenya; Paul Kyoma Asiimwe is an Assistant Lecturer at Makerere University; Vijay Modi is a Professor at Columbia University

Photo credit: Pexels

When it comes to why, Asian corporate culture offers some answers. In many Western countries, strong voices have emerged in recent years to challenge the dominant view that profit is the sole purpose of doing business. By contrast, the blending of profit with social purpose has long been widely practiced by Asian corporations, and these efforts come in many flavors, influenced by religious teachings and the region’s broad orientation towards collectivism. As the Economist Impact’s 2025 report on Asian corporate giving, “The Business of Doing Good in Asia,” explains, “Confucian, Buddhist, Hindu, and Islamic values, along with collectivist traditions, often frame businesses as moral actors with duties to their communities and countries.” (The Institute of Philanthropy funded both Bridgespan’s and the Economist Impact’s research.)

Governments also take an active role by enacting laws that range in application from official encouragement — typically aligned with national development priorities — to mandated spending. For instance, China made corporate social responsibility (CSR) reporting a legal obligation in 2005, and has since applied the law to promote giving in line with national priorities. And in 2013, India mandated that qualifying large companies must spend at least 2% of their average three-year net profits on CSR activities.

Indeed, corporate philanthropy is such a key source of funding in Asia that new research by the Commission on Asian Philanthropy identified it as one of five distinct growth models that are transforming philanthropy in the region, along with community-led, faith-based, state-led and high-net-worth individual-led models.

But wherever it is practiced across the globe, corporate giving isn’t just an exercise in altruism. Done well, it can enhance a corporation’s competitive advantage and burnish its public image, while shaping societal and environmental outcomes.

And despite the cultural differences that motivate their philanthropy, how Asian corporations give shows similarities with their non-Asian counterparts. Drawing from global benchmarking and numerous interviews, Bridgespan identified three widely used approaches, which we highlighted in a report published late last year. We’ll explore these approaches below.

1. Giving to a Community or Region

Place-based giving addresses social or environmental needs in specific geographic areas, usually communities or locations adjacent to company operations where staff and their families live. Done well, it can produce long-term positive results, including strengthening a corporation’s standing with its employees and the community, increasing customer loyalty, and generating positive media attention. Asian corporations often draw on their knowledge of local communities and work with community groups to tailor initiatives to address specific needs.

For example, Tata Steel Foundation partners closely with local communities and governments in areas near its factories in Jharkland and Odisha, India, to address high maternal and infant mortality rates in these areas. In 2009, the foundation launched the Maternal and Newborn Survival Initiative, or MANSI, which built the skills of government-accredited voluntary health workers in these areas to implement home-based maternal and neonatal care. It also trained these workers on a broader lifecycle approach to address root causes of infant and child mortality.

A five-year period (2011-2015) evaluation of the pilot programme revealed a reduction in neonatal and infant mortality rates of approximately 61% and 63%, respectively. The programme subsequently scaled up from 167 pilot villages to 1,686 villages.

2. Taking Advantage of Distinct Corporate Capabilities

Many Asian corporations deploy core business capabilities — such as specific knowledge, manufacturing processes, talent or technology — for social or environmental benefit. Done well, applying a company’s core assets to social purposes benefits both society and the company. As Karen Ngui, managing director and head of DBS Foundation, the corporate foundation of Singapore’s DBS Bank, put it: “Play to [your] strengths. Play to the business or areas of expertise that you have. Best to not get distracted and do something else, when you will not have that multiplier effect.”

An example of this approach can be seen in the Tencent Foundation’s efforts to blend social impact with the company’s core digital communication and payment platforms, Weixin and WeChat, to deliver on its pledge to implement “Tech for Good.” In 2024, the foundation launched a Digital Platform for Compassion to facilitate giving by individuals and others to directly aid people in need. For instance, donations made via Weixin are processed and distributed as “Compassion Vouchers” to individuals impacted by earthquakes or floods. “If it’s not related to Tencent’s core capabilities, then it might not be our way of doing social value creation,” says Zhang Fan, Tencent Foundation’s programme director.

3. Building Giving Around the Core Business

Corporations that embrace this approach deliver high-value products or services to a population in need in a manner that is complementary to — and reinforces — its core business. They may do so by designing their giving around a target customer segment or an issue their business seeks to address, or around their corporate mission. Done well, this approach provides historically marginalised communities access to products and services they would otherwise not receive. Through strengthening access to these communities, corporations may also be seeding future market opportunities. What may strike some as overreach, others view as a pragmatic way to lead with purpose.

For example, the core business of Taikang Insurance Group in China is affordable eldercare insurance and low-cost housing for the elderly. Insights gained from this work led Taikang to understand that certain aspects of elder care are underfunded. As a result, Taiking Yicai Foundation, one of the corporate foundations under Taikang, has donated thousands of pieces of equipment to 369 eldercare organisations and funded training for 82,000 eldercare workers. In conjunction with the government’s push for rural revitalisation, the foundation also has funded efforts to improve rural health facilities for the elderly.

Corporations bring a variety of motivations to each of these three approaches. The Economist Impact’s report on Asian corporate philanthropy describes six, each reflecting a distinct strategy embedded in a corporation’s values and the environment where it operates. The report finds that corporate motivations are “rooted in founder beliefs, shaped by state priorities, driven by employee advocacy, built on public trust, focused on sector transformation, or sparked by social need.”

The need for better measurement

Unfortunately, good intentions don’t always result in faithful implementation. Critics of corporate giving cite instances of “social washing” and greenwashing — i.e., false or misleading claims about their social responsibility activities or environmental impacts or benefits. A growing number of companies have been linked to both, according to a 2023 report by RepRisk, a company that analyses ESG data to encourage responsible company behaviour.

The best defense to counter accusations of false or misleading social impact claims is rigorous measurement and evaluation. Yet, Bridgespan research has shown that less than 30% of the 20 largest global and Asian corporate givers report impact outcomes. Growing demand for better impact measurement has prompted some corporations to complement their collection of low-hanging outputs data with new efforts to invest in harder-to-measure long-term outcomes. According to Aloka Majumdar, global head of philanthropy and head of sustainability at HSBC India: “We work with our partners and tell them to bring in a few short-term outcomes and marry it with their long-term impact goals.”

Ultimately, corporate leaders need impact metrics that clearly convey results. Just as importantly, measurement and evaluation enables learning and informs decision making that improves corporate initiatives. A learning mindset allows corporations to adapt their impact strategies based on evidence.

Clearly, there’s no one-size-fits-all way to proceed. Corporate decision makers have tough choices to make and multiple approaches to consider. As the Economist Impact report put it: “There is growing momentum for businesses in the region to move beyond informal doing good practices towards more formalised, outcome-driven systems, supported by stronger accountability and clearer measurement.” Those who step up to this challenge can reshape not only their companies, but the future.

Gwendolyn Lim is a partner and Denise Chew is a manager at The Bridgespan Group’s Singapore office.

Photo credit: pondsaksit