SOLAR LENDING CREDIT EVALUATION

WHY IS IT DIFFERENT TO OTHER MFI LENDING Credit assessment is based on present cash flow of the client. Credit assessment is based on present cash flow of the client. Loans are not given on incremental increases. Loans are not given on incremental increases. Lease product Lease product

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

CHARACTER/ CREDIBILITY The age old motto of KNOW YOUR CUSTOMR [ KYC] is common to all whether it is a Bank or a MFI 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 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 details given on income and assets are reasonable or over estimation? Are the figures too conservative ? Are the figures too conservative ?

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 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, Personal background – asset ownership, employment records, borrowings – declared and undeclared, family support, remittances, RECHECK ON DECLARED AND ACTUAL DETAILS RECHECK ON DECLARED AND ACTUAL DETAILS

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

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

REPAYMENT REPAYMENT Present spending on energy will be saved and it will form a major part of the loan repayment in the future 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 ? 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 ? Income support from other members of the family ?

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

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

FUTURE OF LENDING FUTURE OF LENDING Good credit evaluation is the foundation of the quality portfolio quality portfolio