MICROFINANCE PAPER WRAP-UP: “Green Energy Finance and Gender Disparity: The Case of Mountain Areas in Bangladesh,” by Sakib Bin Amin et al, Published by Copenhagen Business School

The authors of this study conducted a household-level analysis to examine the relationships among electricity access, green finance and gender disparity in the Chittagong Hill Tracts (CHT) of Bangladesh. Although access to electricity can improve the economic welfare of women in developing countries, grid-based power is difficult to install in CHT due to the region’s mountainous geography. Instead, the government of Bangladesh has partnered with the private sector to promote renewable electricity in CHT through initiatives such as the Solar Home System (SHS) program.

Of the households sampled, 44 percent do not have access to the electric grid. Of those households, 96 percent have access to renewable electricity, primarily through SHS. The authors found that this increased access to electricity has a positive impact on indicators of women’s empowerment, such as financial and household decision-making. There was even greater improvement than average in cases where the head of the household was female. Family income also has a strong influence on the adoption of SHS, due to the high price of the equipment and lack of financing options for purchase and maintenance. Lower-income households face significant pressure on their monthly budgets when purchasing SHS devices, and some stop using the system altogether over time due to their inability to fund necessary maintenance.

In conclusion, the authors recommend: (1) reducing the initial price of SHSs by lowering the taxes on imported solar equipment; and (2) encouraging more financial technology (fintech) firms and microfinance institutions to finance the adoption of green energy in off-grid areas.

This is a summary of a paper by Sakib Bin Amin, Mainul Islam Chowdhury, Tooraj Jamasb, Farhan Khan and Rabindra Nepal; published by Copenhagen Business School; January 2023; 30 pages; available at https://research.cbs.dk/en/publications/green-energy-finance-and-gender-disparity-the-case-of-mountain-ar.

By Vaughn Rajah, Research Associate

Additional Resources

Copenhagen Business School homepage
https://www.cbs.dk/

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