April 16, 2013 - We’ve been educated on the importance of modifying our individual consumer behaviour and advocating for sustainable energy policies. Now, crowdfunding offers all of us a new way to protect our shared environment and engage in the expansion of renewable and sustainable energy sources worldwide.
“We can take steps to protect our environment by changing our own behaviour, but the reality is that clean renewable energy is out of reach for the vast majority of those who need it most,” said Premal Shah, president and co-founder of Kiva, which claims to be the world’s first and largest crowdfunding platform for social good, connecting people through lending to alleviate poverty and expand opportunity. “Now, with crowdfunding, we have the opportunity to come together to support a cause that affects all of us, one microloan at a time.”
Crowdfunding describes the collective effort of people who network and pool their resources to support efforts initiated by other people or organizations. Through Kiva, anyone with an internet connection can make a loan as little as $25 to the borrower of their choice. Kiva’s community of 900,000 individual lenders [including my wife - Ed.] are crowdfunding more than $2.2 million in loans per week, says the non-profit, and a total of $420 million since its founding in 2005.
These small-dollar loans have helped more than 1 million borrowers in 65 countries start and grow businesses, go to school, improve their homes, buy clean energy products, and more. And with Kiva’s repayment rate of 98.9%, lenders are able to relend their money again and again, or withdraw it from the system.
Kiva’s lenders have crowdfunded green loans for more than 2600 people in 21 countries. Green loans are used by borrowers for installing solar lighting systems, purchasing clean cookstoves, distributing renewable energy products in isolated regions, making household improvements to reduce energy costs and consumption, and implementing sustainable agricultural practices. Each of these loans were crowdfunded, $25 at a time, by 57,000 Kiva lenders from 91 different countries.
According to Kiva, about 20% of the world’s population—1.3 billion people—live in energy poverty. Many continue to use expensive, inefficient and dangerous sources of energy, such as charcoal, kerosene and diesel. Despite the health benefits and potential energy and cost savings of utilizing renewable energy sources, most cannot afford the high upfront costs without access to financing. Finding financing for clean energy products is rare in both industrialized and developing countries.
“Our goal in crowdfunding green loans is to leverage the patient, risk-tolerant capital provided by Kiva lenders to advance clean green energy solutions for the world’s poor,” said Shah. “The loans you fund on Kiva help to create sustainable supply chains in isolated regions and make renewable energy products more affordable. The benefits for the borrowers are less energy consumption, more savings, and improvements in health and well-being. The benefits for all of us are increased adoption of renewable energy and a healthier shared environment.”
Kiva works with upwards of 150 field partners, including microfinance institutions and other non-profits, to reach people on a local level, including some of the most remote places on earth. These partners administer the loans, work with borrowers and collect repayments. Several Kiva field partners started their green loan programs using Kiva’s capital.
Kiva field partners with green loan programs include:
Solar Sister, Uganda: offering loans for women micro-retailers to buy inventories of solar lights to sell in their communities.
One Degree Solar, Kenya: loans for retailers to purchase and resell solar devices that can charge phones, lights and batteries.
EarthSpark International, Haiti: loans for retailers to purchase and resell both solar products and clean cookstoves to expand last-mile distribution.
Barefoot Power, Tanzania: loans for small- to medium-sized solar product distributors to expand adoption in rural areas.
XacBank, Mongolia: loans for energy-efficient housing supplies and renovations, hybrid vehicles and more.
Credit Mongol, Mongolia: loans for clean energy and energy-efficient products.