Clean Energy

Fintech’s role in driving clean energy adoption in Africa

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Over the past couple of years, Africa has become highly invested in reducing carbon footprints as well as mitigating risks associated with climate change. This has led to the adoption of clean energy.

Since a good number of people in Africa still live without electricity and therefore have to resort to using candles, oil lamps, generator sets, or burning woods, the rapid deployment of solar home systems and mini-grids has improved the health, quality of life, and economic growth of Africans. This has been largely facilitated by companies with clean energy solutions.

However, these clean energy solutions providers have to efficiently collect payments from consumers – some of who are either low-income earners or live in rural areas. This is where fintech companies come in.

Fintech companies help them achieve this efficiency by giving them the infrastructure and developing clean energy power models thereby making energy easily accessible and affordable for rural communities while enabling financial inclusion.

Just like agent banking which has extended financial services to rural areas, thanks to portable point-of-sale (POS) machines that perform many banking functions, fintech energy providers are leveraging on the success of the model and have started adapting agent networks to help providers of solar home systems reach more customers.

They facilitate the provision of off-grid solar and mini-grid solutions to Africans especially those in rural areas who do not have access to clean energy. This has greatly driven the adoption of renewable energy via the facilitation of energy solutions across the continent.

With the help of technologies such as blockchain, advanced data analytics, or artificial intelligence, fintech is also helping these companies to evaluate and reduce their environmental impact as well as helping investors to channel their operations towards more sustainable assets.

Some fintech solutions firms also drive energy access via decentralized finance (DeFi) crowdfunding platform which enables investors to provide microloans that support the deployment of clean energy.

In addition, there are also cryptocurrency platforms created to reward solar energy producers and serve as incentives to those considering installing solar panels. This means solar energy producers get crypto rewards when they show the meter readings of their energy production.

The promotion of low-cost solar energy use in rural areas by fintech through their infrastructure is not only enabling financial inclusion but also creating a world of inclusion in the clean energy sector for these communities.

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