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Diffusion of innovation at the bottom of the pyramid: the impact of a payment system on the adoption of electricity in rural Uganda
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Entrepreneurship and innovation.
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Entrepreneurship and innovation.
2013 (English)Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

This thesis analyses how a payment system affects the diffusion of renewable electricity in rural Uganda. A case study is used provided by a start-up company named Pamoja Cleantech. This company is about to sell electricity, which is generated by biomass-based gasification, to a low-income community. Several households are already connected to the established mini-grid while the majority is still not served. A chasm has been identified between the users in the rural village. The reason for this gap between adopters is the high connection fee and a lack of transparent communication. Therefore, diffusion theory has been used to analyse the impact of several payment-related solutions that could close this chasm. First of all, a set of critical factors have been identified concerning general electricity adoption in the case. Those are reliability, trust, transparent communication and satisfying the needs of the local people. Additionally, it has been shown that a payment system, tariffs, and investment costs must satisfy specific requirements in order to be effective, efficient, and positively affect the rate of adoption. These are requirements such as dealing with the cultural incompetence of people being able to save money and to overcome their understanding to have electricity as a status symbol. Therefore an existing technology with its infrastructure is proposed to use: mobile banking. Since this technology has already penetrated Uganda, its convenience to use and satisfaction is high. Additionally, it has advantages such as saving time, security, reliability, and not much space for fraud. This thesis is based on a theoretical framework that is empirically tested and will provide a description of this specific situation in Uganda. Also, it proposes several management recommendations for the company in order to convert adduced threats into opportunities and strengthen their current inclusive business model.

Place, publisher, year, edition, pages
2013. , 65 p.
Examensarbete INDEK, 2013:26
Keyword [en]
Diffusion of innovation, crossing the chasm, bottom of the pyramid, renewable electricity, payment system, Uganda
National Category
Economics and Business Engineering and Technology
URN: urn:nbn:se:kth:diva-123518OAI: diva2:626964
Educational program
Master of Science - Entrepreneurship and Innovation Management
Available from: 2013-06-17 Created: 2013-06-10 Last updated: 2013-06-17Bibliographically approved

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