Microfinance for clean cooking: What lessons can be learned for scaling up LPG adoption in Kenya through managed loans?. (July 2021)

• Record Type: Journal Article
• Authors: Hsu, Eric; Forougi, Noah; Gan, Meixi; Muchiri, Elizabeth; Pope, Dan; Puzzolo, Elisa
• Is Part Of: Energy policy. Volume 154(2021)
• Publication Date: 2021-07
• Subjects: LPG -- Cooking -- Household energy -- Microfinance -- Clean fuel -- Loan -- Adoption; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2021.112263
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: Liquidity constraints are a key barrier to acquisition and sustained use of clean household energy in resource-poor settings. This study evaluates a pilot microfinance initiative in Kenya to help low-income rural households access liquefied petroleum gas (LPG) for cooking. Program beneficiaries received a six-month loan that covered all equipment costs and was to be repaid in monthly installments. We present results from surveys of beneficiaries (n = 69) after they began using LPG, as well as 332 non-beneficiaries from the same community (to understand how beneficiaries and non-beneficiaries differ in cooking patterns and socioeconomic outcomes). 94% of beneficiaries had repaid their loan in full and on time at the time of data collection. Meanwhile, beneficiaries were more likely than non-beneficiaries to use LPG as their primary cooking fuel (76.8% of beneficiaries versus 38.8% of non-beneficiaries). While 81.1% of beneficiaries who used LPG as their primary cooking fuel reported multiple fuel use, we find beneficiaries increased LPG use by 5.9 h per week with a corresponding decrease of 4.8 h in weekly use of biomass fuel. Our findings suggest that promoting LPG usage through microloans for equipment is likely to be both commercially viable and beneficial to health through decreased use of polluting biomass fuel. Highlights: A program in Kenya offered loans for LPG cooking equipment for low-income homes. High (94%) repayment rate among loan recipients in the rural project community. Program beneficiaries increased LPG usage and decreased biomass usage for cooking. Informal lending by saving groups successful in supporting adoption of clean cooking.