Introduction of a Credit Purchase Loan for energy efficient appliances in Credo (Energocredit)

2014-04-30 - 2016-03-31

As a partner bank, Credo received debt funds from EBRD through its Energocredit program to support sustainable energy development in Georgia. Through on-lending those funds to local businesses to buy energy efficient appliances, the program aims to enhance the awareness for energy efficiency and to transfer skills to local financial institutions in sustainable energy lending. The project started in May 2014, and a specific credit purchase loan was developed at the bank. Up to date, mainly white goods (household equipment) are sold through the product. Loans can be used to buy and install energy efficient white goods such as refrigerators, washing machines or air-conditioning, energy efficient windows, to insulate roofs and walls or energy efficient agricultural equipment. Materials and equipment can be selected from a special list of products that meet EE criteria. Several distribution channels are used: 2000 partner shops that sell certified EE products and are both located in cities and rural areas of the country. Up to 250 shops where Credo has its own trained sales representatives who offers products and performs Credit Purchase disbursement in the shop. With promotional material, based on the slogan `”consume less, save more”, Credo’s representatives promote and offer the loan product both in the stores, and during other marketing campaigns. For each environmental-friendly investment the client benefits from 10% payback of the loan amount in cash subsidized by the Energocredit project. Once a client takes out a loan, he/she applies has to apply to obtain this incentive, which is transferred to Credo once a month and is then disbursed to the client. The use of the funding is verified by a team of experts (provided by an operation partner of the Energocredit project) through an on-site inspection carried out randomly on selected equipment.# In its first 20 months of operation, 3,230 EE loans have been disbursed (162 EE loans monthly) of an average loan size of around 400 € mainly for white goods.