Developing stronger collaboration between actors in energy and microfinance sectors
This paper discusses potential synergies between the energy and microfinance sectors. It offers guidance to MFIs and energy companies entering into a partnership to develop an energy lending program. Successful energy-lending programs need strategic partnerships between stakeholders, including MFIs, SHFs, energy companies, government agencies, donors, commercial banks and NGOs. The role played by each stakeholder in energy lending and their understanding of each other's responsibilities are crucial for the success of an energy-lending program. Features that MFIs need to look for in an energy company include:
Common development vision;
Capacity to meet client needs;
Local market presence;
Focus on after-sales service;
Strong business principles.
Features that energy companies need to look for in a potential partner MFI include:
Flexibility in lending models;
Extensive and diverse reach;
Readiness to introduce energy lending;
Creditworthiness and sustainability;
Demand for energy;
Internal capacity to support energy lending program.