TecAp puts valuable technologies within reach for low-income farmers

One of the biggest obstacles for low income coffee producers to buying a solar system is that they do not have the cash to pay $1,000 for a home system or $2,000 for a large enough system to assist their farm activities. Designed from the point of view of very small coffee farmers, TecAp works to lower the amount of the loan payment by stretching it out over 5 years. The cooperatives that the coffee farmers belong to lend to their members on an annual basis for needs between the coffee harvests, but the coops have very little money to lend long-term (for more than one year). Thus, solar and other appropriate technologies [that cannot be paid for within the one-year loan term] remain out of reach for these low-income farmers.  For this reason, TecAp has been working with international, socially responsible lenders to create longer-term loan arrangements.   If the international lenders will lend to the cooperatives on a 3-5 year term, the cooperatives can in turn lend to their members for the same term, thus lowering the loan payments by stretching them out over a longer period.

To facilitate the piloting of this project, international socially responsible lender Root Capital agreed to consider the coffee cooperatives’ request for 5-year loans so that the cooperatives could drop the payment size for their members. The first success of this system was 50 systems that were installed in July 2010. Root Capital lent for 3 years to the coop, which in turn has lent for 3 years to its members. Read about these members’ experiences having energy in their home for the first time. TecAp is working to repeat this lending strategy with other fair trade coffee coops, and has already had more success.

TecAp encourages lenders by educating on the benefits of solar and the ability of small low-income farmers to repay their loans 3 to 5 years.  IDEAS had this type of dialog with Oikocredit, a major lender that had not previously lent for solar purposes.  Oikocredit in Nicaragua recently lent $100,000 to the Cooperativa 20 de Abril for solar rooftop systems that will benefit more than 110 rural members. Root Capital has expressed its willingness to extend longer-term loans to the cooperatives that will then provide three year loans to their members, so that their members can make smaller annual payments that coincide with the coffee harvest (when the farmers have the most disposable income). This system designed by IDEAS has allowed hundreds more families access to electricity in their homes.