Microfinance - Revision history

Mugo Gichamba at 13:55, 17 December 2014

2014-12-17T13:55:59Z

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Ranisha at 14:22, 15 August 2014

2014-08-15T14:22:25Z

Ranisha: /* Further Information */

2014-08-01T13:52:35Z

‎Further Information

Ranisha at 13:51, 1 August 2014

2014-08-01T13:51:11Z

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Gunnar.wegner: /* Microfinance for RE Projects */

2014-06-04T13:00:06Z

‎Microfinance for RE Projects

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Fungai Cecilia Sandamu at 13:20, 28 August 2013

2013-08-28T13:20:28Z

Fungai Cecilia Sandamu at 20:44, 26 August 2013

2013-08-26T20:44:13Z

Fungai Cecilia Sandamu at 07:50, 26 August 2013

2013-08-26T07:50:35Z

Fungai Cecilia Sandamu at 13:38, 25 August 2013

2013-08-25T13:38:40Z

Fungai Cecilia Sandamu at 13:37, 25 August 2013

2013-08-25T13:37:45Z

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 <br/>
-<span data-scayt_word="MFIs" data-scaytid="23">MFIs</span> are characterized by their focus on lending to households and small businesses—generally for productive invest<span data-scayt_word="ments" data-scaytid="27">ments</span> or to support agricultural activities. Most <span data-scayt_word="MFIs" data-scaytid="24">MFIs</span> have a relatively narrow focus in <span data-scayt_word="geographi" data-scaytid="35">geographi</span><span data-scayt_word="cal" data-scaytid="36">cal</span>, product, and sector terms. Loans are typically made at relatively high interest rates and for short <span data-scayt_word="peri" data-scaytid="38">peri</span><span data-scayt_word="ods" data-scaytid="39">ods</span>, to be repaid from the additional revenues generated by the investment or from the future sale of crops. Longer-term lending for <span data-scayt_word="appli" data-scaytid="40">appli</span><span data-scayt_word="ances" data-scaytid="41">ances</span> where repayment depends on household incomes, as is the case for the purchase of [[Solar Home Systems|Solar Home Systems]], is therefore a change in business model for many <span data-scayt_word="MFIs" data-scaytid="25">MFIs</span>. In Bangladesh [[Results-Based_Financing|Results Based Financing]] (<span data-scayt_word="RBF" data-scaytid="822">RBF</span>) has been used in combination with <span data-scayt_word="microfinance" data-scaytid="44">microfinance</span> to refinance <span data-scayt_word="MFIs" data-scaytid="26">MFIs</span> after they have been verified to have carried out appropriate installations, thus freeing <span data-scayt_word="MFI" data-scaytid="29">MFI</span> funds for further lending.
+<span data-scayt_word="MFIs" data-scaytid="23">MFIs</span> are characterized by their focus on lending to households and small businesses—generally for productive invest<span data-scayt_word="ments" data-scaytid="27">ments</span> or to support agricultural activities. Most <span data-scayt_word="MFIs" data-scaytid="24">MFIs</span> have a relatively narrow focus in <span data-scayt_word="geographi" data-scaytid="35">geographi</span><span data-scayt_word="cal" data-scaytid="36">cal</span>, product, and sector terms. Loans are typically made at relatively high interest rates and for short <span data-scayt_word="peri" data-scaytid="38">peri</span><span data-scayt_word="ods" data-scaytid="39">ods</span>, to be repaid from the additional revenues generated by the investment or from the future sale of crops. Longer-term lending for <span data-scayt_word="appli" data-scaytid="40">appli</span><span data-scayt_word="ances" data-scaytid="41">ances</span> where repayment depends on household incomes, as is the case for the purchase of [[Solar Home Systems (SHS)|Solar Home Systems]], is therefore a change in business model for many <span data-scayt_word="MFIs" data-scaytid="25">MFIs</span>. In Bangladesh [[Results-Based_Financing|Results Based Financing]] (<span data-scayt_word="RBF" data-scaytid="822">RBF</span>) has been used in combination with <span data-scayt_word="microfinance" data-scaytid="44">microfinance</span> to refinance <span data-scayt_word="MFIs" data-scaytid="26">MFIs</span> after they have been verified to have carried out appropriate installations, thus freeing <span data-scayt_word="MFI" data-scaytid="29">MFI</span> funds for further lending.
 Public financing of such <span data-scayt_word="MFI" data-scaytid="46">MFI</span> initiatives can be provided through a variety of instruments. These can include the provision of credit lines to increase available funding and lower the costs of customer loans, the provision of grants or subsidies for a similar purpose (often on a <span data-scayt_word="RBF" data-scaytid="47">RBF</span> approach), or the provision of <span data-scayt_word="guaran" data-scaytid="51">guaran</span>tees to cover <span data-scayt_word="MFIs" data-scaytid="48">MFIs</span> against part of the losses they might sustain from loan defaults—either directly or through the failure of<br/>supplied equipment<ref name="The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds."> The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds.</ref>.
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 <br/>
 [[Category:Financing_and_Funding]]

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 <br/>
 = Further Information =
 *[[Microfinance Institutions - Financing Renewable Energy|Microfinance Institutions - Financing Renewable Energy]]<br/>
-*[[Use of Microfinance Institutions (MFI) for Renewable Energy Technolgies|Use of Microfinance Institutions (MFI) for Renewable Energy Technologies]]<br/>
+*[[Use_of_Microfinance_Institutions_(MFI)_for_Renewable_Energy_Technologies|Use of Microfinance Institutions (MFI) for Renewable Energy Technologies]]<br/>
 *[[Energizing Microfinance Workshop Documentation|Energizing Microfinance Workshop Documentation]]<br/>
 *[[Financing Models for Solar Home Systems|Financing Models for Solar Home Systems]]<br/>
@@ Line 114: / Line 115: @@
 <br/>
 = References =

@@ Line 5: / Line 5: @@
 One of the most common financing concepts for small‐scale decentralized/off-grid renewable energy projects has been different types of microfinance services, i.e. provision of debt to fund low‐cost, clean energy equipment<ref name="IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables.">IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. </ref>. Many microfinance funds were initially specialized for one technology, such as solar home systems. They are increasingly expanding, however, to other renewable energy systems, so that a single financing agency may provide finance for a number of different renewable energy technologies, including renewable household systems, improved biomass cooking stoves as well as community small‐grid systems<ref name="IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables.">IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. </ref>.
-<div><div id="ftn1">
 <br/>
-</div></div></div></div></div>
-= <span data-scaytid="108" data-scayt_word="Microfinance">Microfinance</span> =
+= Introduction to Microfinance =
 <span data-scaytid="110" data-scayt_word="Microfinance">Microfinance</span> Institutions (<span data-scaytid="117" data-scayt_word="MFIs">MFIs</span>) are being used to channel funds for small-scale renewable energy technology (RET) projects, particularly at a household and community-level for off-grid electrification. Such projects are generally developed by small suppliers and serve low-income communities with limited ability to pay up front. Thus small-scale projects can face even greater problems that other RET projects in raising capital for initial investments<ref name="The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds."> The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds.</ref><span style="line-height: 1.5em; font-size: 0.85em;">.</span>
@@ Line 75: / Line 81: @@
 <span style="line-height: 1.5em; font-size: 0.85em;"></span>
 </div></div></div></div></div></div>
 = Further Information =
@@ Line 81: / Line 101: @@
 *[[Energizing Microfinance Workshop Documentation|Energizing Microfinance Workshop Documentation]]<br/>
 *[[Financing Models for Solar Home Systems|Financing Models for Solar Home Systems]]<br/>
 <br/>
@@ Line 88: / Line 109: @@
 <references /><br/><br/>
 [[Category:Financing_and_Funding]]

← Older revision		Revision as of 20:44, 26 August 2013
Line 88:		Line 88:
	<references /><br/><br/>		<references /><br/><br/>

		+	[[Category:Financing_Solar]]
		+	[[Category:Solar_Home_Systems_(SHS)]]
		+	[[Category:Solar]]
	[[Category:Financing_and_Funding]]		[[Category:Financing_and_Funding]]
−	~~[[Category:Microfinance]]~~

@@ Line 36: / Line 36: @@
 </div></div></div>
 |-
-| colspan="3" | <span style="font-size: 80%; line-height: 20.39583396911621px;">Source: </span><span style="font-size: 12px; line-height: 18px;">Adapted from The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds</span><ref name="The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds.">The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds.</ref>
+| colspan="3" | ''<span style="font-size: 80%; line-height: 20.39583396911621px;">Source: </span><span style="font-size: 80%; line-height: 18px;">Adapted from The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds</span>''<ref name="The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds.">The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds.</ref>
 |}
 </div></div></div>
@@ Line 47: / Line 47: @@
 Most experience in microfinance has probably been gained with SHS for household electrification, in particular lighting. The size and modular character of solar PV are well suited for individual small‐scale applications and easily adaptable to microfinance solutions. Mini‐grids incorporating e.g. mini‐hydro power plants are suitable for microfinancing in regions with higher population density. Such projects have a lot of potential for growth and even future integration into grid‐expansion plans. However, the households might not have the means to pay back even small debt, because, unless electricity is used for business purposes such as irrigation, electrification does not create more income for the households. As a result, household electrification puts a huge burden on the credit user. Microfinance is, therefore, most suitable for productive use of electricity, such as solar water pumps for irrigation, not for basic off‐grid electricity needs such as lighting or cooking<ref name="IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables.">IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. </ref>.
-As linkages are built between the microfinance and energy sectors, financial institutions may be more willing and able to channel capital into loans for energy services. Investment in modern energy systems by clients of MFIs and by energy companies can become more attractive if these investments are coupled with increased economic productivity. MFIs adding energy lending to the portfolio can result in more customers for the energy enterprises and the creation of energy entrepreneurs—resulting in improved productivity and quality-of-life<ref name="http://www.arcfinance.org/pdfs/pubs/Energy_Summary_FINAL.pdf">http://www.arcfinance.org/pdfs/pubs/Energy_Summary_FINAL.pdf</ref>.
+As linkages are built between the microfinance and energy sectors, financial institutions may be more willing and able to channel capital into loans for energy services. Investment in modern energy systems by clients of MFIs and by energy companies can become more attractive if these investments are coupled with increased economic productivity. MFIs adding energy lending to the portfolio can result in more customers for the energy enterprises and the creation of energy entrepreneurs - resulting in improved productivity and quality-of-life<ref name="http://www.arcfinance.org/pdfs/pubs/Energy_Summary_FINAL.pdf">http://www.arcfinance.org/pdfs/pubs/Energy_Summary_FINAL.pdf</ref>.
 <br/>
@@ Line 69: / Line 69: @@
 |-
 | colspan="3" |
-<span style="font-size: 10.909090995788574px; line-height: 20.39583396911621px;">Source: Adapted from </span><span style="font-size: 10.909090995788574px; line-height: 20.39583396911621px;">Wade, H. (2005). Financing Mechanisms for Renewable Energy Development in the Pacific Islands. </span><span style="font-size: 10.909090995788574px; line-height: 20.39583396911621px;">Available at: </span>[http://www.sprep.org/attachments/climate_change/FinancingMechanismsforREDevelopment_000.pdf http://www.sprep.org/attachments/climate_change/FinancingMechanismsforREDevelopment_000.pdf]<ref name="Wade, H. (2005). Financing Mechanisms for Renewable Energy Development in the Pacific Islands.">Wade, H. (2005). Financing Mechanisms for Renewable Energy Development in the Pacific Islands.</ref>
+''<span style="font-size: 10.909090995788574px; line-height: 20.39583396911621px;">Source: Adapted from </span><span style="font-size: 10.909090995788574px; line-height: 20.39583396911621px;">Wade, H. (2005). Financing Mechanisms for Renewable Energy Development in the Pacific Islands. </span><span style="font-size: 10.909090995788574px; line-height: 20.39583396911621px;">Available at:[http://www.sprep.org/attachments/climate_change/FinancingMechanismsforREDevelopment_000.pdf http://www.sprep.org/attachments/climate_change/FinancingMechanismsforREDevelopment_000.pdf] </span> <ref name="Wade, H. (2005). Financing Mechanisms for Renewable Energy Development in the Pacific Islands.">Wade, H. (2005). Financing Mechanisms for Renewable Energy Development in the Pacific Islands.</ref>''
 |}
@@ Line 88: / Line 88: @@
 <references /><br/><br/>
 [[Category:Financing_and_Funding]]

@@ Line 4: / Line 4: @@
 = Overview =
-One of the most common financing concepts for small‐scale decentralized/off-grid renewable energy projects has been different types of microfinance services, i.e. provision of debt to fund low‐cost, clean energy equipment<ref name="IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. ">IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. </ref>. Many microfinance funds were initially specialized for one technology, such as solar home systems. They are increasingly expanding, however, to other renewable energy systems, so that a single financing agency may provide finance for a number of different renewable energy technologies, including renewable household systems, improved biomass cooking stoves as well as community small‐grid systems<ref name="IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. ">IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. </ref>.
+One of the most common financing concepts for small‐scale decentralized/off-grid renewable energy projects has been different types of microfinance services, i.e. provision of debt to fund low‐cost, clean energy equipment<ref name="IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables.">IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. </ref>. Many microfinance funds were initially specialized for one technology, such as solar home systems. They are increasingly expanding, however, to other renewable energy systems, so that a single financing agency may provide finance for a number of different renewable energy technologies, including renewable household systems, improved biomass cooking stoves as well as community small‐grid systems<ref name="IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables.">IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. </ref>.
 <div><div id="ftn1">
 <br/>
@@ Line 45: / Line 45: @@
 Public financing of such <span data-scaytid="46" data-scayt_word="MFI">MFI</span> initiatives can be provided through a variety of instruments. These can include the provision of credit lines to increase available funding and lower the costs of customer loans, the provision of grants or subsidies for a similar purpose (often on a <span data-scaytid="47" data-scayt_word="RBF">RBF</span> approach), or the provision of <span data-scaytid="51" data-scayt_word="guaran">guaran</span>tees to cover <span data-scaytid="48" data-scayt_word="MFIs">MFIs</span> against part of the losses they might sustain from loan defaults—either directly or through the failure of<br/>supplied equipment<ref name="The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds."> The World Bank, 2013. Financing Renewable Energy - Options for Developing Financing Instruments Using Public Funds.</ref>.
-Most experience in microfinance has probably been gained with SHS for household electrification, in particular lighting. The size and modular character of solar PV are well suited for individual small‐scale applications and easily adaptable to microfinance solutions. Mini‐grids incorporating e.g. mini‐hydro power plants are suitable for microfinancing in regions with higher population density. Such projects have a lot of potential for growth and even future integration into grid‐expansion plans. However, the households might not have the means to pay back even small debt, because, unless electricity is used for business purposes such as irrigation, electrification does not create more income for the households. As a result, household electrification puts a huge burden on the credit user. Microfinance is, therefore, most suitable for productive use of electricity, such as solar water pumps for irrigation, not for basic off‐grid electricity needs such as lighting or cooking<ref name="IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. ">IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. </ref>.
+Most experience in microfinance has probably been gained with SHS for household electrification, in particular lighting. The size and modular character of solar PV are well suited for individual small‐scale applications and easily adaptable to microfinance solutions. Mini‐grids incorporating e.g. mini‐hydro power plants are suitable for microfinancing in regions with higher population density. Such projects have a lot of potential for growth and even future integration into grid‐expansion plans. However, the households might not have the means to pay back even small debt, because, unless electricity is used for business purposes such as irrigation, electrification does not create more income for the households. As a result, household electrification puts a huge burden on the credit user. Microfinance is, therefore, most suitable for productive use of electricity, such as solar water pumps for irrigation, not for basic off‐grid electricity needs such as lighting or cooking<ref name="IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables.">IEA, 2011. Renewable Energy - Policy Considerations for Deploying Renewables. </ref>.
 As linkages are built between the microfinance and energy sectors, financial institutions may be more willing and able to channel capital into loans for energy services. Investment in modern energy systems by clients of MFIs and by energy companies can become more attractive if these investments are coupled with increased economic productivity. MFIs adding energy lending to the portfolio can result in more customers for the energy enterprises and the creation of energy entrepreneurs—resulting in improved productivity and quality-of-life<ref name="http://www.arcfinance.org/pdfs/pubs/Energy_Summary_FINAL.pdf">http://www.arcfinance.org/pdfs/pubs/Energy_Summary_FINAL.pdf</ref>.
@@ Line 51: / Line 51: @@
 <br/>
 <div class="page" title="Page 36"><div class="layoutArea"><div class="column">
-{| border="0" cellspacing="1" cellpadding="5" style="font-size: 13.63636302947998px; width: 1298.1817626953125px;"
+{| border="0" cellspacing="1" cellpadding="5" style="font-size: 13.63636302947998px; width: 100%;"
 |-
 | colspan="3" style="text-align: center; background-color: rgb(79, 129, 189);" | <font color="#ffffff"><span style="line-height: 20.383522033691406px;">'''Consumer Loans through Rural Microfinance'''</span></font>
@@ Line 68: / Line 68: @@
 </div></div></div>
 |-
-| colspan="3" | <span style="font-size: 10.909090995788574px; line-height: 20.39583396911621px;">Source: Adapted from </span><span style="font-size: 10.909090995788574px; line-height: 20.39583396911621px;">Wade, H. (2005). Financing Mechanisms for Renewable Energy Development in the Pacific Islands. Available at: [http://www.sprep.org/attachments/climate_change/FinancingMechanismsforREDevelopment_000.pdf http://www.sprep.org/attachments/climate_change/FinancingMechanismsforREDevelopment_000.pdf]<ref name="Wade, H. (2005). Financing Mechanisms for Renewable Energy Development in the Pacific Islands.">Wade, H. (2005). Financing Mechanisms for Renewable Energy Development in the Pacific Islands.</ref></span><br/>
+| colspan="3" |
 |}
 </div></div></div>