According to United Nation, about seven out of every 10 households in rural India have no access to electricity and they use harmful energy sources like kerosene to meet their energy needs. These household are the potential market for renewable energy such as solar power but many of these households are poor and cannot afford solar power.In 2003, UN Environment Programme and two of India’s largest banking groups—Canara Bank and Syndicate Bank—as well as associated Grameen banks together launched a project to help the rural poor finance alternative energy sources such as solar panels for their homes. With additional support from the Shell Foundation, the project was able to provide an interest subsidy lowering the cost of the solar home system for customers.
With 20,000 loans to date, the program has created a vibrant credit market for solar home systems, and several other banks are now launching competing products on an unsubsidized basis.
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