A New Approach to Microfinance Biogas in India

- Mohit Sharma

This Power-Point presentation (now text) is part of my

Marketing project “Potential, Feasibility & Microfinance

of Biogas : Rural India”. My MBA (Energy Trading),

University of Petroleum & Energy Studies, group

members (Abhishek Ray, Vanya Narain, Vivek Chaudhary)

covered various other aspects related to Biogas included

in this book. This project is based on my observations on

our 2 surveys (First on 18 Families & second on 136

families in Dehradun City). To entertain you I will start

with two Print-‘Multimedia’ Ads (Biogas AKA Gobar Gas)

which I ‘performed’ after the presentation. Mohit

Sharma

Biogas Ad – 1 (Hindi)

रुकिए चचा...हााँ चाची जी आप भी! क्मा आऩ चॊऩानेय गाॉव के साधायण ननवासी से धयती के यऺक फनना चाहेंगे?

कैसे?

अऩने ऩश-ुधन का उचचत

प्रमोग कीजिमे औय गोफय गैस इस्तेभार कयके धयती के सॊसाधन फचाइए!

हाॉ-हाॉ! चाची िी...अऩने ऩैसे बी फचाइए.

एर.ऩी.िी. की ऐसी-तेसी, हभ अऩनाएॊगे गोफय गैस, पुर-टू देसी!

Biogas Ad – 2 (English)

So, you are vegetarian!

According to Smt. Maneka Gandhi if you consume milk or milk

base food product are derived from animals & in the process

we ‘forcefully’ consume the share of their young ones. As India

is the biggest producer & consumer of milk…But now, we are

habitual. So…

Why not using your livestock to save natural resources & using

them to produce Biogas & related products.

At least, we can neutralize Smt. Gandhi’s statement

to some extent.

A New Approach to Micro-financing of Biogas

Projects in India

In India, Most households in rural areas & considerable percentage in

urban India (total more than 80% of total population) still rely on

traditional energy sources for cooking and heating, such as firewood,

dry cow dung, agriculture residue with few having access to electricity.

Having said that, India is one of the leaders in world in terms of

livestock, arable land and organic matter.

Microfinance & Microcredit

Microfinance refers to financial services like savings, credit, insurance,

money transfer and other financial products provided by different

service providers, targeted at poor and low-income people. Microcredit

is also an important constituent of Microfinance in which small

monetary loans are given to unsalaried borrowers with little or no

collateral.

Biogas (Gobar Gas)

Biogas is the gaseous product of the anaerobic digestion

(decomposition without oxygen) of organic matter. It is typically made

– Methane = about 2/3, Carbon dioxide (30-35%), and traces of gases

such as hydrogen, carbon monoxide, and nitrogen. Biogas is sometimes

called swamp gas, landfill gas, or digester gas. It is created when animal

and human waste are converted into clean sources of cooking fuel,

replacing the need for wood, dried dung, and fossil fuel based sources

of energy.

Its byproduct can also be used as a natural fertilizer to increase

agricultural yield. It also offers a many practical benefits to families and

individuals. Indoor air pollution is reduced (which is a serious problem

in rural areas), money is saved on lighting fuels, time is saved from

gathering firewood, sanitation improves as latrines are connected to

biogas, and finally, soil fertility increases as bio-slurry is used as a

fertilizer. It can also be used as alternative source of electricity.

Indian Scenario

Majority of households in India still use chulha, dry dung, etc which is a

major cause of in house pollution & diseases, disorders arising due to it.

The proportion of rural households is much more in this case compared

to urban population. The usage of traditional methods also depends on

the level of income and standard of living of a family. India has

immense potential in alternative energy when it comes to Biogas

energy which is due to the anaerobic digestion of organic waste

(without oxygen). The reason behind this is that India has largest

population of livestock in the world which automatically increases the

byproducts derived from them.

Most of the waste is untapped mainly because of Financial Constraints,

Significant number of people still following the Subsistence Agricultural

practices and grazing, etc. Wealthy class in rural areas also exist in the

form of landlords, etc who have huge land, significant part of which is

unutilized.

They also have financial backing. Their resources can be utilized for

‘Community Biogas Projects’ to facilitate the large unprivileged class. To

counter the financial constraints Microfinance is a great tool. In

community project all the beneficiaries can separately or combined

apply for the microfinance as per the requirement.

The houses (on paper) can be categorized according to their Social Class

(and sub social classes) and marked with colors accordingly. MNREGA

and other Government schemes are centrally governed schemes in

which funds are allocated to Block Division (of few villages) or Gram

Panchayat, as per the size of the village. The marking can be made

flexible by regular surveying or trend projection of future if surveying is

done after few years.

The reach of Banks and Financial Bodies is limited and they generate

very less profit from the Micro-financing function. Therefore, these

financial bodies can pact with Phone Service Providers (or other

popular products in target areas) for surveying and micro-financing in

remote areas. The Mobile representative can conduct survey and offer

the individual or community loan as per the requirement. The

microfinance can also be merged with Mobile company schemes or the

Monthly ration which will create the economy of scale and bring down

the per capita cost.

Microfinance Increasing the Feasibility of Biogas Use in India (Survey

Questions)

1. Approximate organic matter per family?

2. Adequate land for Individual pit (Per Capita Land)?

3. Social Class Distribution of village or target area(s)?

4. Land holdings by upper class?

5. Subsistence agricultural pattern?

6. Number of families below poverty-line (for the estimate of

Community Biogas Projects)?

7. Scope in MGNREGA and other Government sponsored schemes?

8. Number of Phone service provider in that area?

9. Average amount required in individual and community projects? (to

be clubbed with Mobile schemes or other products)?

10. Popular products with very high demand in rural areas?

11. Any influence of state policies?

12. Compared to other Nonconventional projects of what is the

energy generation, share of biogas?

13. Successful project examples & prototypes?

Limitations of Governmental Schemes for Rural Development

*) - (CAPART) Council for Advancement of People’s Action & Rural

Technology

*) - MGNREGA (Mahatma Gandhi National Rural Employment

Guarantee Scheme)

*) – Diksha

*) – IAY (Indira Awas Yojna)

These & many more schemes focus to improve the standard of living

& basic necessities not on related concepts like Biogas or relatively

new ideas.

Worldwide Examples

With the cooperation of Government, Private & International Non

Profit Organizations there are successful examples of

implementation of Biogas Projects in various underdeveloped

countries in Africa (Nigeria, Kenya, Angola, Congo, Zambia), Latin

America & even in South Asia (Nepal, Bangladesh, Myanmar,

Pakistan, Sri Lanka).

Constraints (India)

1) – As India is a diverse country in terms of regions, traditions, &

community based social norms followed in different states.

2) – Maintenance & service of plants.

3) – Religious issues. (In few countries like Indonesia Human waste &

Pig waste is used to produce Biogas which is unimaginable in

India)

4) – Semi-protection of Rural Development sector by federal setup

of Government.

Private Microfinance Plans

*) - Promotion & Introduction of private companies in Microfinance.

*) – Using powerful distribution networks of private companies where

Government Banks & Financial Institutions are not there.

1) – Agricultural Goods (Seeds, Fertilizers, Tractors, etc Agencies)

2) – Foods Products (How often I came across a poor peasant

enjoying ‘Parle G’)

3) – Consumer Goods

Community Loans

Community loans which are useful in regions where subsistence

farming & grazing are dominant. Dominance of low income

groups. There are two proposed methods.

• – Volunteer contribution & equal supply of Biogas. (In few

communities, tribes funds are centrally managed)

• – Supply according to contribution.

Defaulters

Though, the default rate in Microfinance is less but such defaulters

should be given chance to pay their loans by doing some community

service with no or less pay.

Bio Credit

(Yes, I got inspired from Carbon Credit) Monetary/Non Monetary

rewards can also be given if,

1) - A person saves biogas & passes it on to other needy people

through inter-connected network.

2) - A person spreads awareness, knowledge & promoting usage of

Biogas.

Suggestions for improving the Feasibility of Biogas in Rural India

*) - Integration of Biogas projects with Rural Development schemes by

Ministry of Rural Development.

• – Focus on agricultural waste & other organic waste apart from

livestock waste.

• – Customized plans, schemes according to the nature of regions.

• – Clubbing of common areas (Community & Individual Projects) to

minimize dulpication.

Micro-financing of Biogas Projects in India :

(Focus – Bidholi, Dehradun)

Result of a survey “Feasibility of Biogas as an Alternative Fuel in Rural India”, I conducted in Bidholi Village. Later I along with my Marketing project group conducted a bigger survey covering aspects like Potential, Feasibility, Electricity from Biogas, Microfinance & various other aspects.

Village – Bidholi, Dehradun.

No. of Families Covered : 18

Total Members : 87 (Average 4.8 Members/Family, Range : 1 to 8)

Total Cattle/Animals : 73 (Average 4.05/Family, Range : 0 to 34)

Total Organic Waste/Day : 265 Kgs. (Average 14.7 Kgs/Family, Range :

0 to 120)

Positive-Negative Response to Biogas as an alternative : 15-3 (83.4% :

16.6 %)

Number of Families getting 12 Hours or less electricity per Day – 13

Number of Families getting no Electicity – 6

Total Land : 105.33 Bigha/43 Hectares Approx. (2.35 Hectares/Family,

Range 0 to 15.5)

Usage of Chulha to LPG Ratio – 12 : 6 (67%-33%)

The statistics above clearly indicate that local households produce good

amount of organic waste which includes Bagasse, crop & animal waste,

etc & have sufficient land. Many villagers are willing to opt Biogas as an

alternative energy source but are unable to initiate it due to financial

constraints, myths, lack of governmental support. Private Financial

Bodies, Banks and Government can spread awareness & provide

microfinance for community based Biogas Projects providing electricity

and cooking gas to many households by pooling their resources.

Individuals possessing huge livestock and land can provide these

resources for very poor households or whole village if the community

projects fall short of village’s need.