Week in Review: Microfinance helps spread clean energy to rural areas

Today there are 1.6 billion people living without electricity. If we agree that access to electricity is fundamental to economic development, that number is very disheartening.

Triple Pundit put out a very interesting article this week highlighting how microfinance specifically can help bring sustainable energy to the quarter of the world’s population that lives without it.

Traditional energy infrastructure has been highly centralized as it is the most efficient option for urban areas. While they’ve worked great in those environments, these electricity grids often fail to reach people in more remote areas, thus causing mass migrations and overcrowding in cities.

While we can attempt to address the issue of actually getting electricity out to rural areas, it becomes a moot point when you consider many people may be unable to afford the energy at all, even if it were accessible.

This is where microfinance comes in.

The article highlights Nicaragua’s Off-grid Rural Electrification Program, PERZA. PERZA subsidizes the installation of energy efficient systems in rural areas and then kicks it up a notch with a microfinance plan. Rural residents are provided with small business loans so they can generate extra income to actually utilize the new energy.

Although this is just one specific program, it is a refreshing reminder of the relevance and power of microfinance. Combining access to energy, promotion of clean energy, and business development is an impressive feat.

Currently you can filter Kiva loans by those that promote sustainable, earth-friendly lifestyles in addition to those that serve residents in rural areas. We are so thrilled to be able to promote green practices as well as target hard to reach borrowers.

An example of a Kiva field partner that incorporates both of these attributes is Solar Sister. Via Solar Sister, Kiva lenders can provide women entrepreneurs with loans to purchase solar-powered lamps for resale in rural communities throughout Uganda.