Microfinance is one of the hottest trends in social entrepreneurship right now and microfinance organizations such as Kiva, the Grameen Foundation, and ACCION have been producing amazing results in the flight against global poverty. The success of microfinance has led to a growing number of niche microfinance organizations offering microloans to help people tackle specific problems. One of the largest and most established of these niche microfinance programs is Water.org‘s WaterCredit, whch offers low interest microloans to help families and communities improve their local water infrastructure.
A relative newcomer in the niche microfinance industry is Energy in Common, which offers microloans to help families improve their access to reliable, inexpensive, and environmentally sustainable sources of energy.
Worldwide, about 1 in 3 people lacks access to reliable forms of energy. This exacerbates their poverty in many ways. For example, using firewood for cooking contributes to deforestation and desertification, which can destroy the livelihoods of poor families. As trees disappear, people (especially women and children) must spend more and more time finding firewood for cooking, leaving them less time to tend their families, improve their education, or run small businesses. Cooking indoors over an open fire, as many families dependent on firewood must do, can also contribute to respiratory problems and other health conditions. Another common option for families without access to modern forms of energy is kerosene. Unfortunately, kerosene is not very efficient and can be extremely expensive – up to 30% of a family’s income.
What They Do
Energy in Common helps solve these problems by helping poor families take out low interest loans to help them pay for cleaner, more reliable sources of energy.
For example, Dorothy Buahin is one of the entrepreneurs seeking a loan on Energy in Common’s site to help her buy solar lanterns. These portable lanterns combine a small solar panel with a rechargeable battery and energy-efficient LED lightbulbs, allowing them to be used after charging even when the sun is not shining. Dorothy owns a provision shop in Ketan, Ghana and hopes to expand her hours of operation with the help of solar lanterns to light the shop after dark. She also hopes her children will be able to study better in the evenings with the help of the lanterns.
Another entrepreneur seeking a loan is Mary Ephraim, who hopes to use the loan to purchase a clean-burning stove. She is a baker who currently relies on wood fires, which can be difficult to light after rain and is smoky and can heat inconsistently. She hopes that a clean burning stove will not only reduce the time she must spend tending the fire, but also improve her product quality and save money by using less fuel.
Energy in Common also offers loans to help entrepreneurs purchase biogas digesters, which turn organic waste into renewable energy while also producing nutrient-rich compost to spread on fields and improve crop production, and solar panels to power homes or businesses.
Like Kiva, Energy in Common is a nonprofit organization that distributes the loans through its field partners. In addition to the warm fuzzy feeling lenders can get from helping relieve poverty and save the Earth at the same time, you can also receive carbon offsets to help offset your own carbon footprint.