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Micro Finance is the provision of loans, savings and other basic financial services to the poor and low-income clients. Traditionally, low-income people fall outside the purview of banks because of small transaction size and deficiency of assets that can be secured by banks as collateral. Micro Finance provides tools to the poor to lift themselves out of poverty by providing small loans and financial services that help “micro-entrepreneurs” reap the rewards of their own labour. Micro Finance delivers very small loans to unsalaried borrowers, taking little or no collateral. The methods developed over the last few decades for delivering Micro Finance include group lending and liability, pre-loan savings requirements, gradually increasing loan sizes, and an implicit guarantee of ready access to future loans if present loans are repaid fully and promptly.
We at Ace believe that the empowerment of disadvantaged and needy people through generation of self-employment opportunities will assist greatly in improving the economic status of our country. In the near future, we are proposing to open a micro finance bank to focus on rural growth.
Target of installing 5000 Solor Home System (SHS) in the rural house hold of Nepal.
Ace Development Bank Ltd. with Winrock International as the lead consultant and in collaboration with Frankfurt School of Finance & Management‘s UNEP Collaborating Centre for Sustainable Energy & Climate Finance targets the installation of 5,000 Solar Home Systems (SHS) in rural households of Nepal through credit financing. Through this activity, ACE Development Bank Ltd. is expanding the initiative of Alternative Energy Promotion Centre (AEPC)-Energy Sector Assistance Program’s Credit Financing of Solar Home Systems.
The total project cost of the new initiative is estimated to be USD $ 1.8 million, out of which Frankfurt School shall provide funds to identify local financial institutes and provide capacity building & monitoring activities. The capacity building activities will support the improvement in governance and financial practices, develop marketing of SHS and assist in preparing business plans.
The project completion date is 31st December 2012, however the project proponents will report and monitor the progress of the project activities for an additional two years until 2014. This initiative supports ACE’s commitment towards renewable energy technology (RET) financing and rural market penetration as a part of its micro finance strategy.
About the project proponents:
Ace Development Bank Ltd.:
Mission Statement: “Banking on Innovation & Integrity”
Ace Development Bank Ltd. has been a leading player in the financial market of Nepal. It was founded in August 1995 as Ace Finance Company Ltd. and was upgraded to Ace Development Bank Ltd., a full fledged category “B” development bank in 2007. As a responsible corporate citizen Ace Development Bank firmly believes in supporting Nepal’s efforts to improve access to renewable energy technologies and the global efforts to reducing greenhouse emissions.
Frankfurt School of Finance and Management’s – UNEP Collaborating Center:
The mission of Frankfurt School - The UNEP Collaborating Centre for Sustainable Energy & Climate Finance is to work with UNEP in delivering its mandate to increase finance sector engagement in the sustainable energy sector. Its goal is to promote increased investment in the energy efficiency and renewable energy sectors primarily in developing markets, but also in industrialized countries.
Alternative Energy Promotion Center (AEPC):
Alternative Energy Promotion Centre (AEPC) is a Government institution under Ministry of Environment, established with the objective of developing and promoting renewable/alternative energy technologies in Nepal. The mission of AEPC is to make renewable energy mainstream resource through increased access, knowledge and adaptability contributing for the improved living conditions of people in Nepal. Energy Sector Assistance Program is one of the programs of AEPC.
AEPC-Energy Sector Assistance Programme (ESAP):
Energy Sector Assistance Programme is an initiave of Alternative Energy Promotion Center to achieve ongoing sustainability in renewable energy sector in rural Nepal. ESAP was set up with a view to achieving ongoing sustainability in the rural / renewable energy sector in Nepal within a 20 year timeframe, ESAP is supported by DANIDA, Norway, KfW/Germany, SNV and GoN. So far more than 197,000 SHSs have been disseminated through this programme mostly in remote areas of Nepal.
Winrock International is a nonprofit organization that works with people in the United States and around the world to empower the disadvantaged, increase economic opportunity, and sustain natural resources. Winrock International’s Renewable Energy Project Support Office (REPSO) has been introducing innovative approaches to improve access to clean energy in Nepal for more than a decade.