Editor’s note: Batool Hassan recently joined Acumen Fund’s Pakistan office as a Knowledge & Communications Consultant. She recently completed her Masters of International Affairs from SIPA, Columbia University, and moved to Karachi late last year. Batool has microfinance consulting experience and has worked in the US consumer banking sector.
A recent article published in the World Bank’s Development Outreach, “Microfinance: Climate Change Connections,” discusses the potential relationship between microfinance and climate change. It highlights an interesting link between innovations in environment-friendly products and how microfinance can facilitate access to these products for the base of the pyramid (BoP).
The article points out that many members of the microfinance community have often viewed environmental concerns as a ‘luxury’ their low-income clients can ill-afford to consider.
But recent partnerships between renewable energy companies and microfinance institutions point to possible collaborations that will allow low-income households to gain access to cleaner/renewable energy technologies.
These partnerships’ progress and results – as well as the involvement of social investors – may prove insightful for Acumen Fund. It is critical for us to track similar projects as we work with entrepreneurs offering critical services to the BoP based on sustainable, commercially viable business models. What can we learn here?
Furthermore, it will be necessary for Acumen Fund to explore how climate change affects livelihoods at the base of the pyramid and how renewable energy technology products can specifically address these concerns.
Derek Newberry’s recent post at NextBillion.net very accurately raises the point of whether alternative energy companies will be able to generate BoP customer demand for these products. In addition, Newberry questions whether these innovations will be scaleable and commercially viable – which remains to be seen.
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