Modern Lighting Accessed Via Consumer Microcredit

October 03, 2012

A Problem of Finance

Perhaps the biggest challenge in making the shift from harmful fuel-based lighting to solar lighting in the developing world lies in the initial cost of a lamp. In Ghana, Lighting Africa researchers found that a large household using kerosene lanterns for lighting spends around USD $5 each week on fuel. Meanwhile, a solar lamp has a one time cost of about USD $40. Spread out over the thirty year lifespan of the lamp, the solar lighting option is much more affordable in the long term. The problem, of course, is securing the initial investment when many of the buyers live on less than a two dollars a day.

The Microcredit Concept

Microcredit is a simple approach that has been proven to help empower the world's poor to end the cycle of poverty. In recent years microcredit has gained attention as a particularly effective and flexible strategy, with 2005 being declared the International Year of Microcredit by the United Nations.

Microcredit involves the extension of small loans and financial services to very poor people, typically to support self-supported, income-generating activities. With access to small amounts of credit and reasonable interest rates people are given the opportunity to work to achieve freedom from poverty with dignity. A key element of the microcredit model is the recycling of loaned money. Repaid money can become a new loan to another person and in this way, the value of the money and its power for positive change is multiplied. Very high repayment records have been achieved around the world, particularly where systems of peer support and mutual responsibility help to ensure success.

Following the lead of Mohammed Yunus and Grameen Bank in Bangladesh, a number of groups and organizations have undertaken microcredit projects as effective tools for development. Recently, 36 Rotary Clubs in the San Diego area collaborated with the Bill and Melinda Gates Foundation to raise $600,000 in microcredit loans. These loans will provide capital to enable at least 3,500 women in rural areas of Ghana to support businesses that revolve largely around agricultural products and livestock. Efforts like these are being made around the world and are changing lives for the better, every day.

Microcredit for the Consumer

Similar in concept to the traditional idea of microcredit for small business development, "consumer microcredit" is used for strategic personal investment and can be an equally powerful tool for change. A prime example of how this strategy may be used is found in the replacement of fuel-based lighting with solar lighting techniques. In such a case, a family now spending USD $260 each year on kerosene could instead pay $1 per week for one year for a solar light that will provide safe, clean light for decades. By employing the already existing microbank networks and extending them to include consumer microcredit for strategic investments like these, a whole new set of opportunities are brought into the light. 

Rotary and Microcredit

Rotarians and Rotary Clubs have been employing microcredit for many years, throughout the world. There are experienced people and operating microbanks already in place.

Glenergy and Consumer Microcredit

Glenergy is an avid supporter of the consumer microcredit model. We encourage our partners in the developing world to consider it as a method to distribute solar lights to those in need while maintaining a sense of ownership and dignity for the end user. We are actively partnering with entrepreneurs in Africa and assisting with financing to allow end-user purchases to be paid over time. You can read about our current lighting projects that use microcredit, and donate to them if you like.

To discuss a potential lighting/consumer microcredit project, email

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