SOLAR LENDING CREDIT EVALUATION

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SOLAR LENDING CREDIT EVALUATION
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WHY IS IT DIFFERENT TO OTHER MFI LENDING

• Credit assessment is based on present cash flow
  of the client.
• Loans are not given on incremental increases.
• Lease product

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VERY IMPORTANT

• Verification of details submitted in the
  application
• One to one meeting with the client
• Asses the importance of energy for the client.
• Asses the money spend for energy presently by the
  client

4
CHARACTER/ CREDIBILITY

• The age old motto of KNOW YOUR CUSTOMR KYC
  is common to all whether it is a Bank or a MFI
• This covers not only honesty but also how tenable
  the credit proposal would be
• Are the details given on income and assets are
  reasonable or over estimation?
• Are the figures too conservative ?

5
LOOK FOR HARD EVIDENCE

• Any form of records to prove income, payment
  record books or notes, receipts, any letters of
  confirmation on selling the harvest, savings,
  bank pass books, payment receipts
• Personal background asset ownership, employment
  records, borrowings declared and undeclared,
  family support, remittances,
• RECHECK ON DECLARED AND ACTUAL DETAILS

6
SECURITY

• Check on the guarantors furnished
• Their income , acceptability , willingness to
  honor the undertakings , promises
• Their acceptability in the neighborhood

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OTHER SUPPORT AVILABLE

• Pre assessment by the solar company.
• Availability of the down payment provide an
  assurance of client credibility.
• Majority of the clients are not poor.

8
REPAYMENT

• Present spending on energy will be saved and it
  will form a major part of the loan repayment in
  the future
• In addition diverting amounts spend for other
  consumption items too are often taken into
  consideration. What happens if the priorities are
  shifted ?
• Income support from other members of the family ?

9
Field Team

• Qualities and abilities to be developed
• Gathering information quickly
• Making assessments in a speedy manner
• Reasonable understanding on the market position
  and practices
• Punctuality
• Networking

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SUPPORT AND SUPERVISION

• Branch level
• Providing required documents and information on
  time
• Proper and appropriate record keeping
• Good coordination
• Constant supervision on the field , timely action
  to address any adverse trends noticed
• TIMELY SERVICE AND AVOID DELAY

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FUTURE OF LENDING

• Good credit evaluation is the foundation of the
• quality portfolio