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24 September 2021

Household electrification via local savings groups!

In the villages of Rugarama and Bisgara, ENGIE Energy Access (formerly Mobisol) has installed small solar offgrid systems (three lamps, radio, mobile phone charging) in 30% of households without electricity.

To our delight, Sustainable Villages Foundation (SVF) has succeeded for the first time in organising the handling of the down payment and the 24 monthly instalments through local savings groups. This reduces the expected loan default rate, which makes the products less costly for the households. If a household has payment difficulties, the savings group steps in. We see this as an important and innovative approach to solving the typical challenges of microfinance.

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Depending on the income situation of the households, SVF grants subsidies to make the products affordable. For example, households in the lower income group pay about 3 USD down payment and then 24 monthly instalments of 1.20 USD each. At the end of the 24 months, the systems are owned by the respective household.

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SVF is working in cooperation with the savings groups and the secretary of the local administration unit to electrify the remaining nearly 200 households without electricity. For these, too, it is planned to organise payment via savings groups.