Green Microfinance Solutions, 18th Microcredit Summit, Abu Dhabi UAE, March 14-17, 2016

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Green Microfinance:
Opportunities and Lessons Learned
Chikako Fujita
M&E Specialist, Arc Finance

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1.2 billion people do not have
access to electricity
Another 1 billion have access but only get unreliable service.
Source: Bloomberg New Energy Finance and Lighting GlobalOff-Grid Solar MarketTrends Report 2016
© Arc Finance

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Availability of financing accelerates
the uptake of clean energy solutions
Arc Finance works with financial institutions and energy companies to
provide affordable clean energy solutions to BOP consumers
Our partners collectively provided access to clean energy to over 250,000
households across 4 countries (worth over US$9 million).
Asset Finance /
Pay AsYou Go
RemittancesMicrofinance
Photos: Souradeep Ghosh, Arc Finance
© Arc Finance

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 Better living standards through reliable
access to lighting and charging
 Educational benefit for children
 Cost saving through reduced spending on
kerosene and other conventional fuels
 Income generation through microenterprise
93% of clients use the
product every day.
98% were satisfied
with the product.
Source: Arc Finance, Annual client satisfaction survey 2015
© Arc Finance
Positive impact on clients

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Why microfinance for clean energy?
Benefits for MFIs
Positive impacts on clients
Client satisfaction /Advantage over
competitors
Additional revenue stream
Employee retention
MFIs are well positioned to provide
clean energy solutions
Existing client base, backed with long-
term relationship
Extensive presence in the field
First-hand understanding of client needs
Capacity to assess the creditworthiness of
the low-income households
© Arc Finance

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Lessons Learned
 No single model: Diversity of business models that work, and business models
evolve over time
 Management buy-in: Success linked to top management buy-in and ability of
company to retain and develop the right team to implement the energy program
 Partnership with good product supplier: Poor consumers do care about quality
and value the protection offered by warranties and after sales service
 Capacity building: Product sales is different from payment collection, and MFIs
need to build the skills needed for sales
 Diversify products over time: MFIs tend to start offering smaller scale products,
but as their energy lending portfolios grow, they begin to offer larger products to
meet customer demand
© Arc Finance