Online microlending social enterprise, Milaap.org is teaming up with renewable energy venture, ONergy to launch an innovative microfinance project. Beginning from 10 November 2011, the two organisations are working together to bring solar lights to more than 1500 rural households in west Bengal, India during its first year of partnership. The project will kickstart in South 24 Parganas, reaching 500 households by March 2012 and subsequently moving on to other parts of the state.
The project aims to reduce monthly family expenditure on lighting by 50 per cent, increase family incomes by 20-30 per cent and empower local partners to promote sustainable and clean energy for the poor and excluded communities.
In South 24 Parganas, almost 40 per cent of the households have no access to electricity. Kerosene lamps are favoured because they are cheap to buy, but expensive to run. A survey at the beginning of the project revealed that a family spends an average of Rs 4000 per month on their kerosene, health, food, education, transport, and other needs.
Also, majority of the people are socially excluded communities, with 84% of the people earning less that Rs 3000 per month. This means that they will not be able to pay up for a Rs 10,000 solar light upfront.
Together with ONergy, Milaap will be developing a financing mechanism that allows poor communities to leapfrog the grid and move straight to solar light.
Vinay Jaju, COO of ONergy, said, "We are excited to partner with Milaap on this innovative project. Utilizing microfinance will enable us to serve hard-to-reach poor families in rural India. With our shared expertise and commitment to quality products and excellent service, I am confident that we can make a significant positive impact to the lives of thousands of households".
Milaap will be working with ONergy to promote solar lights within the villages, disburse the loans, train them in financial management and ensure the sustainability of the project. They will collect orders from villagers, install solar lights and get repaid over 18 months.
ONergy will supply the solar lights and train the rural entrepreneurs in customer education, battery replacement and sales and demand generation.
Anoj Viswanathan, Co-founder and President of Milaap said, " Linking up with ONergy is the key to growing Milaap's work in providing essential services to the working poor through low cost loans in India. Safe lighting through solar technology solutions is the first step towards comprehensive, decentralised renewable energy approach that can not only meet household energy needs but also support small scale enterprises in the area creating jobs, income, and impact beyond the benefits of lighting. This is a fantastic opportunity to solve two huge problems- reduce poverty and combat climate change in a holistic way".
The benefits of solar light are many. It reduces carbon dioxide emissions given off by traditional kerosene lamps and reduces incidences of burns, fatal fires and respiratory deaths caused by burning kerosene in an enclosed space. ONergy a leading provider for best quality solar solutions and servicing in East India and offers extremely affordable solar systems to people who do not have access to clean and reliable energy".
A loan interest will be charged to cover the administrative costs of the project and allow money to be reinvested in new systems, making the project self-sustainable.
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