Fact Sheet "The Potential of Linking Microfinance & Energy Supply"

The paper discusses ways to effectively combine microfinance with renewable energy, especially in rural areas where access to energy remains limited.

The expansion of renewable and efficient energy supply can contribute to improving and enhancing poor people’s access to energy. The critical issue is to find an adequate financing and delivery model to serve potential demand. MFI objectives in offering energy loans include:

• Financing access to energy and renewable energy for micro and small enterprises (MSEs) and low-income households;
• Enhancing MSE productivity and business opportunities;
• Raising awareness among MSEs and low-income populations of opportunities offered by renewable energy.

MFIs can play a significant role in the supply of efficient energy systems to low-income clients. Practitioners highlight the importance of:

• Operating in a favourable institutional and legal environment;
• Coordinating renewable energy and energy-efficient programs with public authorities and policy-makers;
• Finding appropriate pricing;
• Enhancing business opportunities linked to renewable energy;
• Information and awareness-raising of the productive uses of energy.