Micro loans bring light to rural poor

By Rina Chandran

AHMEDABAD, India (Reuters) - When night falls in remote parts of Africa and the Indian subcontinent, hundreds of millions of people without access to electricity turn to candles or flammable and polluting kerosene lamps for illumination.

Slowly through small loans for solar powered devices, microfinance is bringing light to these rural regions where a lack of electricity has stymied economic development, literacy rates and health.

"Earlier, they could not do much once the sun set. Now, the sun is used differently. They have increased their productivity, improved their health and socio-economic status," said Pinal Shah from Sewa bank, a micro-lending institution.

Vegetable seller Ramiben Waghri took out a loan to buy a solar lantern which she uses to light up her stall at night. The lantern costs between $66-$112, about a week's income for Waghri.

"The vegetables look better by this light, and it's cheaper than kerosene and doesn't smell," said Waghri, who estimates she makes about 300 rupees ($6) more each evening with her lantern.

"If we can use the sun to save some money, why not?"

In India, solar power projects, often funded by microcredit institutions, are helping the country reduce carbon emissions and achieve its goal to double the contribution of renewable energy to 6 percent, or 25,000 megawatts, within the next four years.

Off-grid applications such as solar cookers and lanterns, which can provide several hours of light at night after being charged by the sun during the day, will help cut dependence on fossil fuels and reduce the fourth biggest emitter's carbon footprint, said Pradeep Dadhich, a senior fellow at energy research institute TERI.