By Monique Alfris
23 September 2011 – For the past few months I’ve been working with Good Return an Australian non government organisation which works with microfinance partners across South East Asia
Microfinance is simply banking services tailored to the needs of the poor
Which means savings, loans and insurance facilities for people who earn very small amounts, often at irregular intervals.
As an example, the average annual loan size in some of the places I’ve just been to in Nepal was $530. In addition to the small loan size, the people might also be in a remote location, have little to no collateral, have no access to formal employment and have low literacy and numeracy skills.
Which means no ordinary bank is going to serve them.
Enter Muhammad Yunus.
Muhammad Yunus started the Grameen Bank in Bangladesh. In the Grameen Bank, Yunus formed groups of 20 or so women who joined together to take a loan from a microfinance institution.
They meet weekly with a loan officer in their village centre to pay back their loan and make small savings deposits.
These savings, and the other women in the group, serve as collateral. If one of the women cannot pay, the other women must pay her share in order to continue accessing services themselves.
Microfinance plus micro renewable energy
I’ve been working with Good Return’s microfinance partners across Asia to help them develop a micro-energy loan product.
As an example, a woman might not have access to electricity, instead burning kerosene for lighting.
She might decide to take a loan from her microfinance bank to buy a solar lantern – a small solar panel and light emitting diode light like one from Australia’s own Barefoot Power
She can afford to take this loan because the money she saves in kerosene each week is enough to cover her weekly repayments. And not only this, the quality of light is better, and there is less smoke and soot in the house. And of course, zero chance of fire.
A micro solution
OK, so this is the very, very micro scale.
One family (that’s five people on average) in one of the south-east Asian countries we are working in might have one solar lantern. And each solar lantern avoids between 70-140 kilograms of carbon dioxide per year
All you NABERS experts out there can do the maths – if you take an average office building in Sydney at 200 kg of CO2 a square metre (so we’re talking base building and tenancy), with one worker per 10 square metres – then that’s the same as the emissions from 29 families in Asia).
For all their lighting needs.
A global problem?
So the developing world certainly isn’t going to win on size. But they do have a heck of a lot of families.
Some 1.4 billion people lack access to electricity and 2.7 billion cook with biomass
Start multiplying that out and you start to come up with some big numbers.
And not only that, the banks serving these people need financing. Actually the people themselves need financing.
The opportunity has been recognised, and a simplified Clean Development Mechanism has been developed for small scale projects such as this one.Which we looked into.
But these projects have many of the same problems of carbon financing schemes I worked on for the built environment in Australia. The projects are too distributed. The projects are not similar enough. The transaction costs are high. And if you go for the voluntary schemes, the financial incentive for each project is so, so small.
The Australian property industry is a long way from the hills of Nepal, there’s no doubting it. But I can’t help thinking how similar the problems are.
Maybe an answer in Australia will mean an answer for the developing world as well.
In a past life Monique Alfris ran the Sydney arm of Built Ecology. She has just finished working in Ghana and Mauritius with their respective Green Building Councils, and now has taken a role as Good Return’s Sustainable Energy Field Co-ordinator. You can catch her on twitter (@moniquealfris) or on her blog https://moniquealfris.com.