Microfinance Gateway>An Experience on Cooperation between Commercial Banks and Local MFIs for Lending in Solar Home Systems

affiliate language sites: Français عربي Español

Home

Library

Jobs

Training and Events

Organizations

Consultants

Library » An Experience on Cooperation between Commercial Banks and Local MFIs for Lending in Solar Home Systems

An Experience on Cooperation between Commercial Banks and Local MFIs for Lending in Solar Home Systems
Jan 2010, Aryal, M.

Financing affordable energy solutions for rural households

This paper describes a subsidy program in Nepal that aimed to help poor households buy solar home systems (SHS).

The Nepalese government has been promoting the use of renewable energy technologies in rural Nepal, with the help of subsidies. SHS is one such technology for which there is a subsidy of 30 percent to 50 percent. Despite the subsidy, only the well-off rural segment has been purchasing SHS. The government launched a pilot credit program called Credit Financing SHS – 2065 to make the system available to the very poor.

The pilot project found immense demand for SHS in remote areas. It revealed that:

Chosen districts had to have financial intermediaries, such as cooperatives and MFIs;
Involving urban banks in cooperative selection enhanced partnerships between them;
Having many manageable partners is imperative because of the multiple benefits the sector can have;
Income generating activities, if promoted along with credit for SHS market creation, would ensure sufficient cash generation to repay the loan;
Building the capacity of solar companies and financial institutions was necessary;
Urban financiers gave importance to loan security.

Add Review


*First Name:		*Last Name:
Organization:
*Email:
*Country:
(rollover stars to select rating)
Review Title:

Review Text:
I do not want my name, email, or organization to appear with my review. (Country will always appear with posted reviews.)

By clicking "Submit" you confirm that you have read and consent to our Privacy Policy and Terms and Conditions.

Download this Document