The Energy & Microfinance Programme of Pamiga was launched in 2013 to increase access to solar energy for rural people excluded from national power grids, to help reduce their energy bills, improve living conditions, reduce health risks associated with the use of fossil fuels, and develop their economic activities. It was first piloted in three countries: Cameroon, Tanzania and Ethiopia.
In Cameroon, two networks of Self-Managed Village Savings and Credit Associations (CVECA), the Association des CVECA et CECA du Centre du Cameroun (A3C) and the Union des CECA et CVECA du Grand Nord (UCCGN), decided to launch the program in their respective areas of intervention, Central and Northern Cameroon.

Approach: Offer tailored solar solutions through microfinance
PAMIGA’s methodology drew on the lessons learned from other solar microfinance programmes. The approach was based on the assumption that the initiative involves more than just pure product development. To offer adapted solar solutions through microfinance, Pamiga and its partners gave close attention to:

• Selecting quality solar solutions with a warranty, and reliable suppliers capable of providing high-quality services to clients.
• Developing appropriate financial productsapproach, aligned with the expectations and repayment capacity of clients.
• Strengthening the skills of microfinance institutions.
• Clearly dividing roles between the microfinance institutions and solar solutions distributors so that the client could understand the responsibilities of each.
• Developing the necessary tools and procedures to educate customers on correct usage of their solar solutions.

Key Lessons
The pilot project clearly confirmed that access to solar energy meets a very high and solvent demand. The loans have paved the way for considerable economic, social and environmental impact and represent a promising opportunity for impact investing.
From a technical standpoint, three major lessons stand out:

• It is essential to facilitate synergies between the worlds of microfinance and energy. Building strong local partnerships between microfinance institutions and distributors of solar solutions is essential for the successful roll-out of such a programme. The pilot showed that for the two sectors to understand each other, communicate and work together effectively, it is essential to have an organization that can act as a facilitator during the start up phase, and to ensure regular meetings and exchange visits are made between the different partners.

• Motivating teams is also of critical importance. Field staff often perceive the loan products as complex and time consuming. Managing these products required a greater involvement of loan officers, in particular to coordinate orders and deliveries, support clients to install kits, and educate them in the proper use. 

• Microfinance networks alone cannot reach the “last mile”. The pilot phase has indeed confirmed that the need for local technical services is important, not only to promote solar solutions in the villages, but also to install kits, educate clients in the proper use of the solutions, and ensure maintenance. To compensate for the lack of local technicians, the programme partners decided to set up an Energy Entrepreneurs Network, located in the villages. These entrepreneurs are responsible for promoting solar solutions and offering local high quality services to clients (delivery, installation, after-sales services). 

Conclusion
Facilitating access to renewable energies through microfinance goes far beyond purely financial product development. It requires that actors from different horizons pool their expertise and work in synergy to confront a major development challenge.
A gradual and interactive approach is thus essential. Field testing shows that these innovations call for patience; they require testing, learning and making regular adjustments to different models, in order to implement a distribution system and financial services that are relevant, effective and efficient.

Download the full report from Pamiga here.

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