Who May Borrow
To be eligible for the household solar power loan, a CARD member must meet the following criteria:

• CARD Member for 1 year
• Recommended by the CARD Bank Account Officer (AO) and the Branch Manager (BM)
• With verifiable source of income
• Has the capacity to pay the loan
• Not a member of other MFI
• Must have a co maker with capacity to pay and willing to shoulder the loan in case of default in payment

How to Avail of Financing
The process from introduction to purchase of the household solar power followed these steps:

1. Shell Solar thru its authorized sales agents marketed/sold the product to CARD members with a detailed explanation of the products specifications, usage, power management and procedures to avail of CARD household solar power (HSP) financing scheme. The Shell Solar Agent pre-qualified the CARD member before forwarding/endorsing it to the CARD BDS Project Officer (PO).
2. Once the client is pre-qualified, the PQF document, which includes basic income statement, pre-application and power management, agreement/understanding of product usage, was forwarded to the PO.
3. After receiving the necessary documents from Shell, the PO conducted credit investigation (CI) that includes client visit, completion of loan documents, discussion of the loan applicant’s intent of availing financing with the AO and BM.
4. Once the BM and the AO recommended the applicant who must have passed the PO assessment, SHELL was informed of the result for the preparation of unit installation. Process from CI to installation took about one to two weeks.
5. Borrowers paid their solar loan on a monthly basis. In each town covered by the program, there was a scheduled day of payment such as every 3rd week of the month. This schedule was followed by the PO in collecting payments or proof of payments.

A solar financing beneficiary had the options of paying: 1) indirectly through the AO during the weekly meeting of members and/or 2) directly to the PO during his scheduled visit in the CARD Bank branch. Official receipts were issued each payment of dues.
The receiver of the payment (CARD BANK AO/BDS PO) remitted/deposited the collection in CARD BDS-CARD BANK account.
   
Project Outcome

The CARD MRI Research Unit undertook a focused group discussion (FGD) on the outcome of the project and the perceptions of the clients on the various aspects of the project for an informed decision on its continuation. Volunteers from among the solar power buyers both CARD and non-CARD clients served as respondents in the FGD on 2008 February 11-13.
   
Many of the respondents were engaged in crop production/rice farming and livestock. Some managed very small convenience stores while the rest were into petty trading. Most of the respondents had acquired their solar units for 1.5 years.  Almost all of the respondents signed for a 2-year loan term.  Many of the CARD member respondents who availed of the solar loan had been CARD members for more than 5 years.

Reasons for Availing Solar Loan. Majority of the respondents who availed of the solar loan live in communities with no electricity.  They decided to get the loan to: (a) meet their desire of experiencing the comforts of having a lighted house; (b) supplement other sources of power; (c) cut the costs incurred in electric power generation; and (d) minimize the hazards and inconvenience of using generators and traditional lamps.  Only a few respondents with electric connections availed of the item. A few clients wanted to be free from worrying about their monthly electric bills.

Product Features. Majority were dissatisfied with some features such as the limit in the charging capacity of the battery and types of appliances that can be plugged in to the unit. 

Loan Procedures. Majority of the CARD member respondents said that processing of loan was quick and easy, the introductory price was reasonable, and the payment was easy.  They did not have complaints on the loan interest and insurance. Similarly, the non-CARD respondents expressed satisfaction on the terms given to them. 

Most respondents complained about the imposition of the P20 per day penalty on late payments.  Moreover, they found the increase in price of the regular and upgraded units a bit high.  They suggested waiving the penalty on late payment.  For upgrading of units, they suggested lower monthly amortization if the price cannot be lowered and/or make the term longer.

Payment Collection/Remittance. CARD member respondents did not have a problem in remittance of payment.  The opposite was true for the non-CARD respondents who complained of no information of the place where they can remit their payment (not even of the addresses of the branch offices), instances when the staff did not have available receipt for their payment hence not accepting the payment, penalty charges for late payment, and use of the payment by some CARD members who they have asked to pay on their behalf. A few respondents cited that they had no information that the unit will be pulled out if they were unable to pay after 2 months.  They suggested allowing loan re-structuring to clients who faced crisis.

Maintenance Procedures. Almost a majority of the respondents criticized the defective batteries, malfunctioning accessories, non-appearance of the service technician, and absence of service centers. Some even complained about non-functioning units.  Many respondents were angry about the confusing instruction of and practices of service technicians in handling repairs.  Some respondents stated that the product manual should have been explained to them.  They suspected that the batteries that were delivered to them could have been manipulated by the service technicians.  Dissatisfaction on this aspect resulted to loss of interest to pay.  A few admitted committing willful default.  The negative effects of the bad experiences of the subscribers on the enthusiasm of the prospective buyers were mentioned.

Despite concerns on maintenance, the respondents preferred to keep the solar units and complete their payment.  They proposed assigning one technician for each town, setting up of a repair center in the middle of the distribution area, and teaching them basic repair procedures.  Some of them were willing to pay for the maintenance services.

Promotion and Marketing Strategies. Majority of the respondents felt that the promotion was a bit exaggerated especially on the durability and life span of the battery. They demanded truthful advertising. The non-CARD respondents from one city suggested more intensive promotions such as posting banners with locations of distributors.  The CARD members requested for incentives such as calendars.

Effects on the household. Lighting their houses was the most commonly cited effect of the project.  Clients claimed to be more productive because they can do other chores even at night.  Most of them also appreciated lighting their children’s studies at night besides avoiding the hazards of using kerosene lamps.  Economically, clients mentioned the reduction in their electric bills and expenses on fuel for generators and traditional lamps.  They also expressed not worrying much during typhoons and calamities in owning the solar power.

Effects on business. Although not many respondents had used the solar units for income-generating activities, those who have home-based businesses claimed to have benefited and cited that the solar power did not cause hazards to their business.

Effect on the community. Even if the respondents did not have much to share about the effects of the solar project in their community, they are happy to note that somehow the solar power provided light to people passing by their houses, perhaps discouraged robbers, demonstrated an alternative source of electricity, and enhanced social relationship.

Overall, the respondents appreciated the solar power. However, their concerns over product care and maintenance need to be addressed to encourage continuing patronage of the household product.  Though unit maintenance is not within its responsibility and capacity,
CARD can not ignore this matter because even if the clients have paid fully their units, they will bother CARD for their need on maintenance services. Moreover, CARD guards seriously its image as a globally respected microfinance institution The idea of service centers and technicians strategically and permanently stationed in the distribution areas must be explored with the partner. Otherwise, it must find alternative ways to address the maintenance concern.

From the lessons learned out of the initial experience in financing household solar power, CARD plans to continue with the undertaking covering a wider segment of the society while advocating renewable and green energy. It will help sell small low-cost solar powered lighting products such as flashlights, lamps and lanterns.

Considering the social, economic and environmental effects of the solar power, rural financing institutions like the CARD Bank should be motivated to continue funding renewable energy products such as the