Bank Lending for Renewable Energy
The policy group has been working closely with banks to increase their willingness in lending towards decentralized renewable energy for home lighting and livelihood interventions. There have also been efforts fromReserve Bank of India by including Renewable Energy(RE) under its Priority Sector lending(PSL) norms
Fillip provided by MNRE through its subsidies, which were routed through banks making them familiar with the technology, its payback and demand, Schemes of the government to promote micro-entrepreneurship such as Micro Units Development and Refinance Scheme, Credit Guarantee Trust for Micro and Small Enterprise Scheme, etc.
Despite the augmentation of a supportive infrastructure, bank lending towards RE is yet to be systematically recorded and neither are there mandates for lending under the PSL. The policy group has submitted tentative targets for RE lending of the State Level Banker’s Committee chaired by Syndicate Bank and NABARD, which were in-turn shared with all Lead District Managers and District Development Managers in the state of Karnataka. Efforts are now being made to institutionalize the process of setting targets and developing monitoring mechanisms.
SELCO Foundation has experimented with banks, mechanisms to bring ‘un-banked’ customer segments into mainstream financing. The mechanisms captured in Figure 4 were piloted with bankers to encourage bank lending and end-user participation.