Access to Energy and Finance: An Integrated Approach to Capture High-growth Opportunity in Africa

This paper analyzes the synergies in the distribution of energy and financial services. It describes how an integrated approach could enable financial institutions to profitably serve low-income populations, thus enabling a significant source of growth. It also explains how under proper licensing schemes, energy providers could grow into full deposit-taking financial institutions. It uses the experience of retailer-led banks in Latin America to illustrate the ways in which similar models could evolve in African markets. Because the mechanisms explained in this paper can be applied in a diverse set of contexts (ranging from clean stoves to access to sanitation, health, and other basic services), the implications for expansion of locally financed development are important.

The goal of the paper is to offer providers an opportunity to experiment with these new models and accelerate the pace at which poor households gain access to a range of valued financial and non-financial services.