Discovering Microfinance’s Other Green Side

As a newcomer to CFI, I can remember my first impression of the name “Center for Financial Inclusion.” Coming from an environmental background, I didn’t think the work of an organization called the Center for Financial Inclusion would have pervasive environmental impacts. I settled with the notion that CFI simply worked to ensure that quality financial services were widely available. In learning more about CFI and microfinance, it hasn’t taken long to discover that environmental sustainability is an aspect of nearly every prong of CFI’s work.
For me, this relationship with the environment is nicely illustrated in the findings of CFI’s publication Microfinance and Energy Poverty: Findings from the Energy Links Project, which was released in September 2011. The publication summarizes the findings of the Energy Links project, a three-year pilot by CFI, financed by USAID’s Microenterprise Development Office and the Wallace Global Fund. In the words of the publication’s authors:

“Energy Links’ aim was to determine how the established microfinance sector in African countries can alleviate energy poverty by increasing access to small-scale clean energy solutions at the household level.”

Microfinance and Energy Poverty reports that there is a good prospect for viable involvement of MFIs and savings group promoters in the field of micro-energy solutions. This opportunity comes in no small part due to the micro-energy industry’s capability to save customers money, work through savings and credit groups, and use mobile banking. Add to this the fact that use of solar lighting increases client well-being and reduces risks, and you end up with a product that microfinance providers can offer and that clients really want.
The Energy Links project indeed showcased this opportunity for MFIs and savings groups, as it facilitated access to energy for tens of thousands of rural families during its three years of operations. To make this happen, Energy Links staff acted as intermediaries to bring together suppliers, finance sources and distribution networks. The energy sources carefully chosen for the project were solar LED lamps, and cook stove briquettes made from readily accessible bio-matter. Though the project is now complete, its findings are available to guide the building of a massive, sustainable micro-energy industry.

In looking at this project, it’s logical to think that microfinance might also have a place in other environmentally-oriented industries—especially if they help customers save money. A few weeks ago the Accion Ambassadors blog featured such an example in the post The Necessity of Being Green (Part 1): A Microentrepreneur’s Perspective. The blog entry shares the story of Vincenta—a microentrepreneur who makes hats, bags and other goods through the use of recycled materials—and highlights new environmental advances in Fundación Paraguaya’s microfinance program. Vincenta participates in Comité de Mujeres Emprendedoras in Capiata, a program developed by Fundación Paraguaya to assist women entrepreneurs.

The Accion Ambassadors post is written by Laura Vincx, an Accion Ambassador at Fundación Paraguaya in Asunción, and it can be found in its entirety here.

Have you read?
The Real Changemakers in Microfinance
Does MPesa Cause Inflation? Let’s Ask our Woman in Nairobi
OPIC Supports MicroEnergy Credits in Building Clean Energy Microfinance


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