The following snapshot is the first in a series of stories from the Electrifying Households and Schools project, which is a yearlong project that is supported by the Applied Materials Foundation. The project aims to address gaps in end-user financing that curtail the ability of low-income and marginalized households’ access to lighting and energy solutions and to provide schools with lighting and other educational aids.
Hosekerahalli slum, located in the heart of Bangalore city, is home to approximately 30 families who came to the city as migrant workers and eke out a living as daily wage construction laborers. The community has few amenities and its residents have limited options for financing improvements beyond the local moneylender who charges 10% interest per month on loans.
Through an energy needs assessment led by S3IDF’s partner SELCO, it was determined that, on average, a family in the community uses about 5-6 liters of kerosene per month, totaling about Rs. 45, to fuel its kerosene lamp. Kerosene lamps emit low-quality light and noxious fumes but families reported having virtually no affordable alternatives sources for lighting. Through the assessment, the families expressed that improved lighting and mobile phone charging as their most pressing needs.
Due to the households’ lack of collateral and tenuous housing situation, no financial institution in the area was willing to provide financing to this community. To demonstrate to local financial institutions that households in the slum are creditworthy, S3IDF and SELCO decided to install a single light (3.6W LED) solar home lighting system with a mobile charger at a discounted price of Rs. 6000 and provide the financing through one of its branch offices. Out of the 30 households, 6 households came forward to purchase solar home lighting systems. A weekly payment collection of Rs. 500 has been arranged between the local SELCO branch manager and the households. Payments are carefully logged and signatures are taken from the residents in order to maintain a transparent collection system. Now, several months after installation, other residents are coming forward and inquiring about purchasing a system.
S3IDF and SELCO intend to use the example of the first 6 households and their ability to keep up-to-date with regular loan repayments to convince a local financial institution to assist with the financing for the remaining families.