Did you know that a family depending on Kerosene lamps just 2 hours a day may be paying a unit cost 10 times higher than someone living in a big city with 24×7 access to electricity? Why do they still continue to use lamps?
Huge upfront costs are a large barrier. At a macro-level, this places sustainable power infrastructure out-of-reach for low-income group consumers of energy. But why not take a loan?
With no bank accounts (and thus no credit record), financial institutions (FIs) are skeptical of engaging with this these consumer segments. Further, clean energy technologies come with their own uncertainties, which further compounds the risk assessment of such a lending programme.
Microfinance (small-sized lending) has witnessed an interesting journey coupled with financing of green technologies. What does this mean for technology companies, FIs and the end users? Read an interesting 2019 CGAP publication to get started.