Microfinance Intervention for Financing Solar Cooking Technologies: Financing with Savings

This paper investigates the role of MFIs in the distribution and acquisition of solar cookers.

Existing literature supports MFI intervention in the sustainable transfer of energy technologies. The paper examines whether MFIs can promote the wider adoption of solar cookers and develops an analytical framework to evaluate the financial viability of solar cooking technologies. It applies this analytical framework to projects that use solar cooking in Bangladesh, South Africa, and Mexico. Findings include:

• Interaction between consumers of solar cookers and MFIs are dependent on consumer behavior, dynamics of MFI lending strategy, price of cookers, credit, and substituted fuels;
• Probability of alternate access to credit plays an important role in forecasting loan performance;
• Consumer benefits are positively related with the use rate of solar cookers;
• Effect of discount rate is insignificant for the lending MFIs;
• Base price of solar cookers is an important parameter in determining the feasibility of financing;
• Group lending can complement the transfer of solar cookers.