Energy, finance and community business – where is the money?


This IIED Debates event, on 30 November, explored what mechanisms can enable community businesses and farmers to access the financing they need to grow their businesses by using energy productively.

Last updated 01 December 2020
A crowd gathers outside to see a presentation

The Energy Change Lab, a programme of IIED and Hivos, demonstrates various productive use of energy appliances to community members in Matembwe Village, Njombe, Tanzania, in November 2019 (Photo: copyright Sisty Basil)

Electricity drives economic development. But many small community-level businesses and smallholder farmers in rural parts of sub-Saharan Africa need more access to affordable energy financing to thrive. 

This IIED Debates event asked how we can get energy finance to small community businesses in sub-Saharan Africa.

More ways are emerging to help businesses across sub-Saharan Africa get the energy finance they need to grow, but small businesses in rural communities are still missing out. The uptake of ‘productive use of energy’ (PUE) – energy that can help these community-level businesses increase their income and productivity – is not yet happening at any scale.

Current finance paths such as table banking and group lending can enable households with minimum resources to begin investing. Savings and Credit Co-Operative Societies (SACCOs) offer avenues for larger pots of money, but most women face additional barriers in accessing larger amounts of affordable financing.

Lenders to both community businesses and farmers see many risks in offering financial products to smaller opportunities. Businesses themselves may lack knowledge on finance products and be risk adverse to borrowing.

Many energy providers can be more proactive in supporting businesses to use PUE but a cross-sectoral approach is required, as well as more commitment.

What approaches to financing community businesses can connect different finance supply programmes, to better target and local business types that use energy? How can these address differing perceptions and the needs of women-led versus male-led businesses?

This online IIED Debates event, on Monday, 30 November, partnered with Tanzanian organisations TANGSEN, Solar Sister, and gender and energy network ENERGIA with Hivos to explore the trends in financing community businesses using energy in Tanzania, and in sub-Saharan Africa more largely.

Driven by local organisations and voices from the ground, we explored what opportunities exist that community businesses and smallholder farmers can leverage for productive uses of energy.

What is the role of energy providers and finance institutes in supporting PUE? And finally, has COVID-19 affected perceptions to accessing finance?

About the speakers

Thabit Mikidadi is the program and communications manager at Tanzania Gender and Sustainable Energy Network (TANGSEN).

Sheila Oparaocha is international coordinator and programme manager at ENERGIA.

Fatma Muzo is the country director at Solar Sister in Tanzania.

Kevin Johnstone is a researcher in IIED's Shaping Sustainable Markets research group.

Winnie Terry is the executive secretary of the Tanzania Association of Microfinance Institutions (TAMFI).

Halidi M. Mbwana is the investment and facilitation officer at the National Economic Empowerment Council (NEEC).

About the series

This event was part of the IIED Debates series. Through the convening of expert speakers and external stakeholders, IIED brings together an international community to discuss critical issues.

IIED Debates encompass both physical and digital events, including critical themes, breakfast debriefs and webinars. These events are public and are hosted regularly throughout the year in our London and Edinburgh offices and online.

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Juliette Tunstall ([email protected]), IIED's internal engagement and external events officer