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

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  • Hsu, Eric
  • Forougi, Noah
  • Gan, Meixi
  • Muchiri, Elizabeth
  • Pope, Dan
  • Puzzolo, Elisa

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.

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  • Hsu, Eric & Forougi, Noah & Gan, Meixi & Muchiri, Elizabeth & Pope, Dan & Puzzolo, Elisa, 2021. "Microfinance for clean cooking: What lessons can be learned for scaling up LPG adoption in Kenya through managed loans?," Energy Policy, Elsevier, vol. 154(C).
    • Handle: RePEc:eee:enepol:v:154:y:2021:i:c:s0301421521001324
    DOI: 10.1016/j.enpol.2021.112263
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    Cited by:

    1. Hollands, A.F. & Daly, H., 2023. "Modelling the integrated achievement of clean cooking access and climate mitigation goals: An energy systems optimization approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    2. Susann Stritzke & Carlos Sakyi-Nyarko & Iwona Bisaga & Malcolm Bricknell & Jon Leary & Edward Brown, 2021. "Results-Based Financing (RBF) for Modern Energy Cooking Solutions: An Effective Driver for Innovation and Scale?," Energies, MDPI, vol. 14(15), pages 1-39, July.
    3. Nikolas Schöne & Raluca Dumitrescu & Boris Heinz, 2023. "Techno-Economic Evaluation of Hydrogen-Based Cooking Solutions in Remote African Communities—The Case of Kenya," Energies, MDPI, vol. 16(7), pages 1-33, April.
    4. Biswas, Shreya & Das, Upasak, 2022. "Adding fuel to human capital: Exploring the educational effects of cooking fuel choice from rural India," Energy Economics, Elsevier, vol. 105(C).
    5. Das, Upasak & Biswas, Shreya, 2023. "Fuelling down after a lockdown: Effects of the first COVID wave on clean fuel usage in India," Energy Economics, Elsevier, vol. 126(C).
    6. Anik Ashraf & Elizabeth Lyons, 2023. "Complementing Business Training with Access to Finance: Evidence from SMEs in Kenya," Rationality and Competition Discussion Paper Series 416, CRC TRR 190 Rationality and Competition.

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