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Microcredit schemes

microcredit schemes

“My grandson staying in Moradabad town scores above 95 per cent marks in every examination, but my grandson here could not score more than 80 per cent because of lack of electricity. In the past four years, grid lines have been stolen twice and we did not have electricity for months on end,” says Saroj Devi. But now she not only gets sufficient light, but also uses a fan in summers and at times uses the solar panel to operate her black-and-white television set. Her grandson's grades have also improved.

No one in Lala Teekar village had bought SHLS, costing Rs 14000, till 2005. That was when Prathama, a rural bank, introduced its microfinancing option under which customers could pay an installment of Rs 300 per month. Since 2005, over 500 families comprising 80 per cent households of Lala Teekar village have bought SHLS. Overall, the bank has financed over 29,000 home lighting systems in three districts—Rampur, Moradabad and JP Nagar in western Uttar Pradesh—under the scheme called Prathama Solar Jyoti. Over 75 per cent households in 21 villages in these districts now depend only on solar energy.

“Thousands of villages having no grid electricity connection in India and villages that are connected to the grid have irregular access to electricity. This is a huge market for solar energy if the credit options are available to the rural masses,” says R C Virmani, Chairman of Prathama bank. “Prathama is one of the many regional rural

banks in India that are using microfinance to make solar energy popular in rural India,” he adds.

Private players tie up with rural banks

In eastern Uttar Pradesh, many other families like that of Saroj Devi have received assistance from the Aryavart Gramin Bank (AGB). It promotes solar home systems through its 289 branches by holding credit camps to create awareness on microcredit option for solar equipments. Tata BP, a leading player in the solar energy systems, has sold nearly 80,000 SHLS in Uttar Pradesh by tying up with regional rural banks, such as AGB of Lucknow, Prathama Bank of Moradabad and Gomti-Kashi Bank of Allahabad.

Similarly, solar technology provider SELCO Solar has tied up with four commercial banks and nine rural banks to make the technology available to 1.2 lakh households, the majority of which are in Karnataka. According to the managing director of the company, Harish Hande, rural electrification is happening using off-grid solar applications due to the initiative of entrepreneurs and banks. “When SELCO was founded in 1995, the biggest challenge was convincing rural banks to finance sustainable energy systems for poor households, as they had not yet been in the business of financing solar lighting technology,” he says. He adds that the solar credit scheme picked up when in April 2003, the United Nations Environment Programme (UNEP) partnered with 10 banks to subsidise lenders to reduce end-user interest rates from a standard 12.5 per cent to a 5 per cent.

Category: Payday loans

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