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MFIs and Energy Lending (1/2)
Profiles and drivers
Marion Allet
Université Libre de Bruxelles, CERMi
Université Paris 1 Panthéon-Sorbonne, IEDES-UMR 201
Project Co-financed by the European Commission
Project Co-financed by the European Commission
[email protected] www.e-mfp.eu
1. PROFILES OF MFIs OFFERING ENERGY LOANS
Microfinance Environmental Performance Index (MEPI)
Source: Allet, M. (2011) ‘Measuring the environmental performance of microfinance’
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Quantitative study: sample of 160 MFIs worlwide (in 2011)
24% already offer Energy Loans (38 MFIs)
14% are in the process of developing Energy Loans (23 MFIs)
1. PROFILES OF MFIs OFFERING ENERGY LOANS
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Equipments promoted by MFIs offering Energy Loans
1. PROFILES OF MFIs OFFERING ENERGY LOANS
21 MFIs
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Percentage of MFIs offering Energy Loans per REGION
1. PROFILES OF MFIs OFFERING ENERGY LOANS
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< 10,000 borrowers
Between 10,000 and 30,000 borrowers
> 30,000 borrowers
Percentage of MFIs offering Energy Loans per SIZE
1. PROFILES OF MFIs OFFERING ENERGY LOANS
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Percentage of MFIs offering Energy Loans per LEGAL STATUS
1. PROFILES OF MFIs OFFERING ENERGY LOANS
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Source: Allet, M. (2012) ‘Why do microfinance institutions go green?’
2. DRIVERS FOR ENERGY LENDING
Qualitative study: Semi-structured interviews of 23 MFIs’ directors (2010-2011)
MFIs engaging in energy lending are mainly driven by competitiveness motives:
They identified a market need.
They perceive a clear business opportunity.
The triggering role of technical assistance
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MFIs and Energy Lending (2/2)
Challenges and opportunities
Marion Allet
Université Libre de Bruxelles, CERMi
Université Paris 1 Panthéon-Sorbonne, IEDES-UMR 201
Project Co-financed by the European Commission
Project Co-financed by the European Commission
[email protected] www.e-mfp.eu
3. CHALLENGES IN ENERGY MICRO-LENDING
« MFIs have no skills… »
Hire an energy expert (FONDESURCO)
Creation of a new function, too costly?
Partner with an energy provider
How to conciliate two different mindsets?
Create a separate entity with a specialized team (Grameen Shakti).
Too complicated, not for all MFIs?
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3. CHALLENGES IN ENERGY MICRO-LENDING
« Energy lending is more risky… »
No more payment if the equipment breaks down:
Select distributors/providers for their equipment quality
How to manage the absence of labels? Who will monitor?
Ensure the availability of guarantees and after-sale services
Train clients on equipment use
Not a productive loan??
Adapt installments to energy savings amounts
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3. CHALLENGES IN ENERGY MICRO-LENDING
« Loan officers have no time… »
Review objectives and incentives
Negotiate a commission on each equipment sale to compensate for productivity loss
Let’s be cautious on the commercial role of LOs!
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MFIs and Energy Lending
Marion Allet
Université Libre de Bruxelles, CERMi
Université Paris 1 Panthéon-Sorbonne, IEDES-UMR 201
Thanks for your attention
