LA IMPORTANCIA DE LOS RIESGOS PSICOSOCIALES

The generally disappointing experiences with donations on the one hand and the need for finance on the other has resulted in the search for other more structural delivery modes. The provision of credit has for some time been considered the answer for widespread dissemination. The database provides many examples of such credit schemes. The overall impression of these schemes is that they work reasonably well, in case good quality systems have been installed. The repayment discipline is strongly related to the technical performance of the system. If the system doesn’t work, people stop their loan repayments.

A major limitation of credit facilities is that access is generally restricted to those people with regular jobs and as such are only within reach of the middle/high income groups. Examples of various ‘soft’ credit schemes in Southern Africa show a penetration rate of not more than a few hundreds of systems in 3 years time.

Table 3.4: Examples of SHS credit schemes in Southern Africa

Namibia Botswana Swaziland Zimbabwe

Price 45-50 Wp /4 lights (SHS)

US$ 1095 US$ 800 US$ 700 US$ 750

deposit 20% 15% 25 % 25%

interest 5% 14% 22% 15% p.a. (fixed)

max. repayment period

60 months 36 months 36 months 36 months

Transport cost Included in price US$ 0.26/km included in price US$ 0.37/km

project start 1997 1997 1997 1996

no. of installations

ca. 350 ca. 280 ca. 350 ca. 100

seed finance Ca. US$ 650,000 ca. US$ 900,000 ca. US$ 150,000 ca. US$ 70,000 source of finance Namibian Government, NORAD, USAID Botswana Government Triodos Bank, Hivos and Doen Foundation UNDP/GEF (NGO mode) repayment of seed money repayments flow back to revolving fund repayments flow back to revolving fund repayment at 14% interest repayment at 0% interest and deduction of maintenance cost

The table 3.4 indicates that neither the level of seed finance nor the level of interest rate seems to make a huge impact on the level of penetration. High interest rates and relatively low amounts of seed finance in Swaziland have generated similar results as highly subsidised schemes such as the one in Namibia and Botswana. A possible explanation of the difference may be that in Swaziland, the project was run independently from Government with only a limited number of players involved. In the other countries, bureaucratic, inefficient organisation has absorbed more money than would have been necessary.

In all the examples above the credit schemes have been established with the support of Government or donor organisations. Also the other examples in the database show that most credit facility are somehow linked to external parties, e.g. AusAid in Indonesia, the World Bank in India, Enersol in Dominican Republic and Honduras, providing either the seed finance for establishing a revolving fund or financial guarantees of generally up to 100%. Without such support local banks and other financing institutions are often reluctant to provide loans for non- productive investments to the rural population, which they generally perceive as a ‘non- bankable’ group. This perception is based on difficult and costly credit appraisal procedures, relatively high administrative cost - due to small loans, and frequent repayments - and lack of collateral.

And true, the data base provide several examples that confirm these difficulties related to ‘rural finance’:

• The Government project in the Philippines, involving ca. 50 SHS installed on a credit basis. After 3 years the repayments discipline drastically deteriorated and project had to stop, because the cost of collecting exceeded the revenues. The deterioration in repayment is closely related to technical problems with the system. It again indicates the importance of proper maintenance arrangements.

• The Government program in Thailand where ca. 3.5 kWp has been installed, with farmers being the major target group. Revenue collection turned out to be extremely difficult.

During the day farmers are generally in the fields making the physical collection difficult. Also when crops fail and not enough income can be generated from the harvest a social problem arises to repossess SHS of impoverished families.

• In Tunisia the set up of credit schemes or payment in terms is very difficult because Tunisian Law allows only police to repossess SHS in case of defaulting.

Despite the difficulties, there are also examples where credit schemes do work. A crucial element of a proper function credit scheme is close co-operation of and co-ordination between financial and technical partners. SHS need to work for the scheme to be successful. This could be considered one of the merits of the credit delivery mode. End-users have some protection against the supply of low quality hardware or lack of after sales service: they can stop their repayments if they are not satisfied. Suppliers or external financiers will therefore make sure that good quality equipment and adequate after sales services are being provided to avoid the risks of non-payment.

Finding the right partners may however be a time consuming and costly procedure, not everybody is prepared to undertake. For example in Kenya it took almost 2 years to identify the right partners and to establish a good procedure for a feasible financing mechanism for solar electric systems for use in households [World Bank, 1999a].

The fact remains that most credit facilities leave out those without regular income, and hence excluding 60 to 85% of the population. A credit delivery mode will therefore have a limited outreach. If the objective is to reach the rural majority, alternative approaches are required. Various attempts have been made to cater for those without regular employment. For example group loan schemes have been tried in various parts of the world. It seems, however, that such schemes are strongly related to culture. In Latin America group loans through co-operatives have functioned very well, contrary to individual loan schemes. A pre-condition for this approach is the prior (long-term) existence of co-operatives, and thus the interdependence of its members. This interdependence between the members assures a mutual control and a moral obligation to meet the terms of the credit agreement. An example is the COMARCA case in Honduras (CADETT).

In Southern Africa group schemes seldom work. They have been tried not only for SHS but also for other purposes, but group formation seems difficult to achieve. Due to the scattered nature of the settlements (there is no village structure in Southern Africa), people tend to rely upon themselves and lack the social coherency that characterises many other parts of the world. The Maphephethe SHS project in South Africa is an example of such a group loan initiative that failed to materialise [Cawood, 1998].