Wednesday, 9 February 2011

D.light launches microfinance project to bring solar to poorest in Northern India

Our 2010 Gold Award winner D.light design has launched a micro finance project, in partnership with Christain Aid, that will bring solar lighting to 4,400 rural households in three Indian states in its first year.

The Northen Indian states of Jharkhand, Orissa and Chattisgarh have the worst rural electrification track record in India. The majority of people living in these states are socially excluded communities, mainly minority ethnic and caste groups, known as Adivasi and Dalits respectively. On average, these communities have a family income of less than 200 rupees per month, so they are unable to afford the 549 or 1699 rupees that D.light’s lanterns cost in India.

Energy, though, is already an expensive outgoing for poor households. In a country where almost 45% of households have no access to electricity, kerosene lamps are cheap to buy, but expensive to run. A survey revealed that on average families spend between 50 and 90 rupees a month on kerosene for lighting. Kerosene is also dangerous.

D.light and Christian Aid are developing a financing mechanism that will allow poor communities to avoid kerosene, leapfrog the grid and move straight to solar lighting. This project aims to reduce family monthly expenditure on lighting by 50%, increase family incomes by 20-30% and reduce CO2 emissions by 10,000 tonnes. Christian Aid has provided funding for the first 2,500 lanterns and will work with its Indian partners to identify young people to become 'rural entrepreneurs' who can manage the distribution and finance alongside a network of women's self-help groups. Two local partner organisations will work with the entrepreneurs to promote the technology within the villages, train the entrepreneurs in financial management and ensure the sustainability of the project.

Community self-help groups will collect orders from villagers and supply the solar lanterns on credit, charged at 12% annual interest over 10 months. This interest covers administrative costs and allows money to be reinvested in new stock, eventually making the whole project self-sustaining. D.light will supply the lanterns and train the rural entrepreneurs in customer education, battery replacement and sales and demand generation.

(pic: Woman in India with her D.light Kiran lamp)

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