The need for a revolving fund for MFIs Sample Clauses

The need for a revolving fund for MFIs. As MFIs are currently experiencing difficulties in raising fund, they will not try to mobilize funding to enter in a business slightly different from their core operations, especially if credit risks and costs are likely to be higher than in other activities. In order to encourage them to provide financial products for solar energy access, it is necessary to set up a special wholesale fund in charge of providing soft loans to MFIs for REN products. The funds will be used as revolving funds for MFIs proposing solar energy solutions to their clients. As demonstrated in the successful example of IDCOL in Bangladesh, it is essential that access to this fund is available, transparent and reliable for MFIs involved in the national program. The modalities of access to the fund have to be defined for the whole duration of the program. RENDEV thinks that this condition is key, since MFIs’ operations on the field can be considerably harmed if access to funding is not secured. Several donors (AFD, KfW) have included in their agenda the financement of renewable energies solutions in Indonesia and are looking for strong, propoor projects to finance. The GoI should coordinate with them to feed the wholesale fund and ensure the continuous support of contributors throughout the program.
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