Single mother and sole bread winner Mary Pako received solar lighting in her home for the first time last year. The 45-year-old, who lives in a remote village of Tenarau in the Guadalcanal province of the Solomon Islands is a client of the South Pacific Business Development (SPBD) Solar Lighting Loan.
Prior to accessing the loan, Mary’s family of five was used to living in darkness and their eyes were accustomed to the smoke and dim lighting that their kerosene lamps would provide.
The last six months has been life changing for Mary, after she was able to obtain a small loan to buy a solar lighting kit which contained a solar panel, an array of lighting bulbs and a mobile phone charging point.
“The solar lighting has enabled me to do more tailoring and sewing in the evenings to supplement my income from agriculture. My children have also been able to do their homework and study after dark,” Mary said.
Mary has also been able to save SBD $60 (USD 7.70) per week that she would usually spend on the kerosene she would buy for lamps to light her home.
In a country where almost 80% of the 91,300 households do not have access to the electricity grid, households like Mary’s rely on expensive kerosene and/or firewood for their energy needs. This consumes a substantial portion of their often low incomes, while additionally causing health problem due to exposure to smoke from the long term use of their wood fire stoves.
For households like Mary’s, all this is set to change for the better with the introduction of an innovative low-cost, sustainable solar energy solution for household lighting – financed through a now offered by the SPBD.
Women like Mary are the primary beneficiaries SPBD, a network operating in four Pacific countries – Samoa, Tonga, Fiji and Solomon Islands.
SPBD offers small loans to largely rural women entrepreneurs to start or expand small businesses, provides financial literacy and business skills training and offers low-cost microinsurance coverage.
Since it commenced operations in the Solomon Islands in 2013, SPBD has provided over 5,000 women with much needed capital to support their businesses, empowering them to earn a decent income. Commercial banks in the country are not currently engaged in micro-lending and SPBD is the only microfinance service provider reaching out specifically to low-income customers.
As many of SPBD’s clients do not have access to electricity, the new solar loan is a valuable addition to their traditional suite of products that includes micro-savings, micro-credit and microinsurance, contributing to their mission to ‘improve the quality of life of families living in poverty’.
The SPBD solar lighting project now being piloted in the Solomon Islands has been supported through grant funding of USD $44,000 from the Pacific Financial Inclusion Programme (PFIP).
PFIP is jointly administered by the UN Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Australian Government, the European Union and the New Zealand Government.
In providing the grant, PFIP assisted SPBD mitigate the initial operational expenses and risks involved in the project. Consequently SPBD is able to provide the solar lighting equipment at a cost that is 10% cheaper than market price and also includes a full two-year replacement warranty on the equipment. This substantially reduces the burden on the clients and their households. By offering a small loan to fund the purchase of the solar equipment, SPBD makes the households proud owners of the solar lighting equipment.
PFIP has also indirectly contributed to reducing dependence on fossil fuel (kerosene) and firewood that are detrimental to the environment and long term health of users. It is also estimated that households will be able to repay the small loans (US$200) from the savings that will accrue over time from their non-use of kerosene lamps.
During the pilot phase of this project over 1,300 rural households in the country will obtain access to solar lighting and it is expected that the project would be scaled up later to reach an estimated 15,000 households by 2020. To date, SPBD has provided over 200 solar loans and estimates to cover over 1000 households during 2016.
SPBD purchases the solar kits in bulk and sells them to its customers at a discounted price (10% lower than market price). The SPBD loan officers promote the solar product and also facilitate the small loans and repayment scheme to women to enable them to purchase outright the product.
Having commenced in June 2015, the pilot phase which initially targeted rural Guadalcanal province has now also expanded to the Western province through the support of the PFIP grant and will bring solar energy to many other communities.