A Survey on Energy Use, Consumer Preferences, & Finance Models for Renewable Energy Adoption by Women Led-MSMEs in Nigeria:

admin
January 17, 2025

Informing the Renewable Energy Market and Other Agents of Development.

Nigeria’s energy crisis poses a significant challenge, particularly for small businesses and households. With 84% of urban households and 86% of businesses relying on fossil fuel generators, the country consumes approximately $22 billion worth of fuel annually. Business owners alone spend an estimated $14 billion per year to power small-scale diesel and petrol generators, highlighting the nation’s electricity supply instability. This is particularly burdensome for Nigerian women, who own over 40% of the country’s Micro, Small, and Medium Enterprises (MSMEs). Many of these women face high energy costs, with close to 50% spending between ₦2000 and ₦5000 daily on fueling generators.

The situation has worsened since the removal of fuel subsidies in 2023, further raising energy costs. This survey of 1026 women-led small businesses revealed that over 90% of participants reported adverse impacts on their businesses due to subsidy removal. These women overwhelmingly recognize the need for affordable and reliable energy to improve productivity and sustain their livelihoods. Solar-powered irrigation systems, clean cookstoves, electric transport, and solar lighting are identified as transformative renewable energy solutions. These technologies offer the potential to reduce costs, improve health, and boost income for women entrepreneurs in sectors such as agriculture, trade, and education.

Despite this readiness to adopt renewable energy, women face several barriers, including high upfront costs, inflexible payment methods, limited affordable financing, high-interest rates, and insufficient government support. Tailored financial tools are essential for overcoming these obstacles. Innovative financing models such as microfinance loans, Pay-As-You-Go systems, community-based financing, grants, and leasing options can make renewable energy more accessible. The surveyed women entrepreneurs prefer manageable upfront costs (10-30% of the system cost), flexible payment plans, affordable interest rates (5-8%), free trial periods, and moratoriums of at least three months to help ease their transition to sustainable energy sources.

To support this transition, collaborative efforts from governments, financial institutions, NGOs, and the private sector are vital. The following cross-cutting recommendations are proffered by the report:

1. Establish a Dedicated Renewable Energy Fund: All stakeholders should collaborate to create a centralized Renewable Energy Fund that offers low interest loans, grants, and subsidies, particularly for women-led businesses. This fund can be backed by government guarantees and contributions from development partners, with financial products tailored to women’s needs.

2. Promote Gender-Sensitive Financing Solutions: Develop and promote innovative financing models such as Pay-As-You-Go systems, microfinance, leasing, and community-based financing. These flexible options should be designed with low interest rates, manageable upfront costs, and repayment terms that align with women entrepreneurs’ cash flow patterns.

3. Implement Tax Incentives and Subsidies for Renewable Energy: Governments at all levels, supported by development partners, should introduce tax incentives, import duty exemptions, and targeted subsidies to make renewable energy solutions more affordable for women entrepreneurs. Social institutions can advocate for these policies, while development partners can support their design and implementation.

4. Strengthen Capacity Building and Awareness Campaigns: Organize extensive capacity-building programs and awareness campaigns on renewable energy technologies, financing options, and the long-term benefits for women-led businesses. These should involve public-private partnerships, state governments, NGOs, and development partners to ensure women across various sectors gain access to this knowledge.

5. Foster Community-Led Renewable Energy Projects: Encourage the establishment of women-led cooperatives and community-based renewable energy projects. Governments, NGOs, and development partners should provide technical and financial support for collective energy projects such as solar-powered irrigation, mini-grids, or clean cookstoves, ensuring community ownership and long-term sustainability.

Download Report: https://rean.org.ng/wp-content/uploads/2025/01/Final-Draft-Survey-and-Model-for-Innovative-Finance-for-Women-Led-MSMEs-in-Nigeria-updated_Completed_updated.pdf