Access to thermal insulation through micro loans

Transcription

1 Access to thermal insulation through micro loans Tajikistan - Tajikistan - Central Asian Countries Initiative for Land Management (CACILM/ИСЦАУЗР) Provision of small scale loans for private households to ensure access to thermal insulation (in the frame of CACILM). Aim/objectives: In GBAO as in most parts of Tajikistan, natural resources such as firewood from riparian forests and teresken shrubs, remain the main source of fuel for heating and cooking. Due to poor insulation of local houses, and inefficient cooking stoves, much fuel is burned. The aim is to ensure access to energy efficient technologies through the provision of a micro loan 'Warm comfort' is one of the ways to improve house thermal insulation, reduce fire wood consumption, improve the living standards of residents and reduce pressure on the environment. Methods: On the basis of financial and documentation prepared by field officers and clients MLO Madina made the decision to allocate up to US$500, (2.5% interest rate to be reimbursed within 12 months) to the project. The thermal insulation loan is given in kind and not in cash. The client receives all necessary materials and services for the value it has to reimburse in accordance with the micro loan contract and individual repayment schedule. Stages of implementation: The process of a micro loan for thermal insulation consists of the following steps: 1) Meeting with the rural population and interviews; 2) information event on energy efficient products and micro loan; 3) Financial analysis to explain micro loans, procedures, household income and expenses analysis; 4) Technical analysis of potential houses to specify types of material needed, type of work, prepare outline of the house; 5) Decision by the MLO Committee to allocate loan; 6) Micro loan contract and work plan; 7) Preparation of thermal insulation works; 8) Implementation of thermal insulation works; 9) Reimbursement of micro loan Role of stakeholders: The role of each participating stakeholder is indispensable to ensure a smooth flow for the whole process. The funding organisation assists the micro loan organisation with increasing its portfolio and provide loans for thermal insulation. The micro loan organisation develops the micro loan product for thermal insulation, it is responsible for monitoring and it is also part of the committee, which decides to allocate loans. Micro loan field officers in the villages provide financial information on households, which serves as basis for the committee to make the decision. They also regularly monitor the loan reimbursement. Agreement is established with suppliers of quality doors and windows, as well as suppliers of insulation materials such as cement, reflective foil, etc. to have a stable supply of required products. Qualified construction workers trained on thermal insulation install quality doors and windows, improve insulation of existing doors, windows, floors and ceilings. Recipients of the micro loan must show a willingness and an ability to repay the loan. Apart from thermal insulation measures, the micro loan is also available for other energy efficiency products such as: ram pumps, swimming pumps, rain water catchment systems, drip irrigation systems, winter heating and cooking stoves, summer cooking stoves. left: Representatives of MLO Madina meet with a local household head to initiate the micro loan (Photo: Zubayda Kirgizbekova) right: well insulated window produced by trained craftsmen to reduce heat loss in houses (Photo: Zubayda Kirgizbekova) Location: Tajikistan/Gorno-Badakhshan Autonomous oblast, Roshtkala Approach area: > 10,000 km 2 Type of Approach: project/programme based Focus: mainly on other activities WOCAT database reference: A_TAJ031en Related technology(ies): Reduced pressure on forest resources by improved thermal insulation in private houses (TAJ102) Compiled by: Roziya Kirgizbekova, GIZ Tajikistan Date: -

2 Problem, objectives and constraints Problems Use of large amounts of firewood/teresken, thus depleting natural resources, to provide heat due to poor house insulation. Lack of sufficient finances to improve house insulation. Aims/Objectives The aim is to ensure easier access to micro loans in order to make it more affordable for the local households to improve their house thermal insulation, and thus reduce fire wood consumption, mitigate health risks, improve general well being and in the longer term, reduce pressure on the environment. Constraints addressed workload other financial Constraint Lack of knowledge on thermal insulation techniques Households spend a large amount of time on collecting fuel resources to burn for heating and cooking Lack of knowledge about the correlation between poor insulation and fuel consumption. Households do not have enough financial resources available to buy afford thermal insulation for their houses. Treatment Technical support, recommendations and conducting thermal insulation Less workload due to reduced required amount of fuel Awareness raising about positive effects of thermal insulation and product promotion Offer micro loans with a low interest rate to be repaid within 12 months Participation and decision making Stakeholders / target groups Approach costs met by: planners other (specify) land users, individual SLM specialists / agricultural advisors other (Transportation ) 5% local community / land user(s) (Micro loan borrower pays for insulation materials, construction, installation) private sector (MLO Madina offers and financial consultancy free of charge) international (GIZ grant for allocating micro loans ) 90% 1.5% 3.5% Total 100% Annual budget for SLM component: US$ 2,000-10,000 Decisions on choice of the Technology(ies) by SLM specialists alone (top-down) Decisions on method of implementing the Technology(ies): by SLM specialists alone (top-down) Approach designed by: international specialists, national specialists Implementing bodies: national non-government (MLO 'Madina'), international (Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH) Land user involvement Phase Involvement Activities Initiation/motivation Interactive Household members take part in public meetings and awareness raising workshops Planning Implementation Interactive Passive Household members jointly with and financial specialists prepare a work plan for implementing the insulation works Monitoring/evaluation Interactive The users and specialists assess the efficiency of the micro loan and its procedures Research None

3 Differences between participation of men and women: No Involvement of disadvantaged groups: Yes, great Households which cannot afford thermal insulation costs in one go, as it is a big financial burden for them, make use of the micro loan. Especially, female-headed households that have very little income. Organogram: Technical support Training / awareness raising: Training provided for land user, field staff/agricultural advisor, Craftsmen Training was courses, demonstration areas, public meetings Training focused on Awareness raising among the local population on the reasons for, and the effects of bad insulation of houses. The advantages and disadvantages of thermal insulation. Information on existing funding opportunities for thermal insulation. Training of local craftsmen on thermal insulation technologies, and the production of quality and well-insulated doors and windows. Advisory service: Research: No research. External material support / subsidies Contribution per area (state/private sector):. Labour:. Inputs: - Construction material (stone, wood, etc): doors, windows, insulation materials. repayable loans. Credit: Credit was available at interest rates (30% per year) lower than the market rates. Repayment should be completed within 12 months, with 1 month grace period allowed. This equates to a 2.5% interest rate per month. The credit receiver was Individual households receive credit to implement house thermal insulation Support to local institutions: support with

4 Monitoring and evaluation Monitored aspects economic / production economic / production no. of land users involved management of Approach Methods and indicators Ad hoc measurements by project staff Regular observations by land users Regular observations by land users Regular measurements by project staff Regular measurements by project staff measurements by project staff Changes as result of monitoring and evaluation: There were few changes in the approach. Initially the micro loan was provided in cash directly to the households, but the results of monitoring showed that not the full amount of the loan was used for thermal insulation purposes. Therefore the MLO decided to allocate the loan for thermal insulation in kind; in the form of products and services, which proved to be more efficient. There were few changes in the technology. Following ongoing discussions with craftsman and construction workers a follow-up seminar was conducted, where problems and possible changes were discussed in order to improve the quality of thermal insulation products. E.g. the roof hatch window had an opening, but it was not possible to open it from inside the room. As consequence every subsequent roof hatch window will have a lever connected to a string in order to open the window more easily. Impacts of the Approach Improved sustainable land management: Yes, moderate; Micro loans were given so people could afford to thermally insulate their houses, which reduces fire wood consumption and thus contributes to the preservation and improvement of natural vegetation. Adoption by other land users / projects: Yes, few; Following MLO Madina, other MLOs in Tajikistan started to include Micro loans for thermal insulation into their portfolio. One is MLO Ishkashim in GBAO, a second one is MLO Haqiq in the Baljuvon District of the Khatlon Region. Improved livelihoods / human well-being: Yes, little; The household living conditions were improved as they now live in warmer and more comfortable houses with reduced health risks Improved situation of disadvantaged groups: Yes, little; Households save time and money on fuel, and can use this money for other purposes. Poverty alleviation: Yes, little Training, advisory service and research: - Training effectiveness Agricultural advisor / trainers: good Land users*: good Politicians / decision makers: excellent The craftsmen were trained on thermal insulation technologies and the production of well-insulated, quality products. Land/water use rights: None of the above in the implementation of the approach. Long-term impact of subsidies: Positive long-term impact: Moderately The subsidies were in the form of loans, they allowed the participants to purchase the materials immediately and implement the technologies in the households. Concluding statements Main motivation of land users to implement SLM: Well-being and livelihoods improvement: Well-insulated houses allow households to save money and live more comfortably Reduced workload: Less time is spent on collecting fire wood Environmental consciousness, moral, health: Fear to fully destroy the surrounding nature Sustainability of activities: Yes the land users can sustain the approach activities without support. Sustainability is guaranteed by incentives along the value chain and introduced market mechanisms

5 Strengths and sustain/improve how to Weaknesses and how to overcome Improved knowledge on thermal insulation and micro loans Access to thermal insulation Reduced costs for fuel consumption Less harm to the environment There was control of the whole process to ensure efficiency Improved living conditions Financial source with low interest rate Some households still cannot afford the loan Search for donor funding to establish a separate loan for the most poor Whether MLO can sustain the interest rates without support coming from grants The interests rates are still high, there could be a reduction in interest rate or the further payment holidays. Costs for training and awareness raising Initial investments as MLO cannot finance these activities Copyright (c) WOCAT (2016)