Credit Guarantee System

Potential customers require some sort of collateral which the poorest people do not have and need a good track record to qualify for a solar loan. Sometimes customers also need to make a part of the down payment. Bank insists on the evidence that the customer has a minimum regular income before the loan can proceed. They have difficulty in gaining access to financial institutions due to insufficient credit. The Local Credit Center (non-profit organization) formed with the stakeholder of local people and contributions from the Government and Private Institutions, can issue a letter of credit guarantee for the loan to the Bank. In case of financial crisis, the Credit Center pays the Bank instalment.

5.2 Conclusions

It is believed that LEDs operated using solar energy offer the solution to provide clean and affordable light to 1.4 billion people around the world, mostly in Asia and Africa, who are living without electricity and currently use kerosene lanterns as a light source. Replacing kerosene with LED lights offers an array of benefits: reduced air pollution, improved study conditions for children, and reduced spending by poor families on kerosene. Quality of Life is also improved. Use of solar powered white LEDs significantly reduces power consumption, no envi­ronment contamination by mercury or lead, and increases monthly savings by up to 70%. The greenhouse gases associated with kerosene-based lighting will be completely minimized with solar powered white LED lighting systems in devel­oping countries.

Putting reliable solar power systems into the hands of poor and remote villagers has not been an easy task. However, the lighting project should not fail. Careful planning and a number of best practices to address the sustainable development of the market and the acceptance of LED SHS technologies are vital for the success of solar lighting projects.

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