It’s a hot topic at the moment and has been for years as the term “credit crunch” entered our vernacular and we realised just how dependent we are in finance to grease the wheels of everyday life.

Pretty much every single action during the day relies on some kind of financial transaction and we now have a million different ways of doing this.  So I don’t pay for a single journey on the bus with cold hard cash, I use a prepayment facility provided to me by Transport for London in the form of an oyster card – and I make it cheaper for myself by buying monthly tickets in advance.  So the seemingly innocuous financial transaction required to board a bus has a number of behind the scenes activities.  And my travel gets cheaper because I can afford to pay for it in advance.

Throughout the world there are a tonne of examples where investing in something upfront can save you money in the long run.  But of course, this only works if you have the money to invest in something upfront.  Unfortunately, time and again the people who would benefit most from those cost savings are the very ones who can’t afford the upfront investment.

Energy costs are one area where this seems to be ever the case.

In the developing world, millions of off-grid households rely on kerosene for lighting and cooking – expensive, unhealthy and bad for the environment.  So solar lanterns or cleaner more efficient cookstoves would have a real impact – especially on the household economy.  But if your income is pretty much decided day-to-day, what might seem like a small investment to us (say $10-$20) is just not feasible – and it’s hard to save for something when your income is dedicated to simply keeping going.

Microfinance is one way that’s helping to address this need.  Ashden‘s International gold winner this year was SKDRDP, a rural development programme in South India that has show the vital role of a well-run microfinance organisation in meeting the poor’s energy needs.  It provides affordable loans to families to help them buy renewable energy systems that improve their quality of life.  They have so far provided nearly 20,000 energy loans are self-help groups that help people make informed choices on what energy products they buy.  In the long term, meaning more money in their pockets with less money spent on fuel, better health and fewer carbon emissions.

Technology is advancing this idea further by introducing the idea of “pay as you go” solar – meaning the consumer doesn’t get into debt upfront but pays for the equipment commensurate with the amount of energy used.  Check out eight19 for more information on how this is making a huge impact.

The need for credit to improve lives isn’t restricted to the developing world.  Here in the UK with increasing numbers of people living in fuel poverty and ever increasing problems of accessing credit, it seems like we are facing our own challenge of making sure the people who could benefit from lower energy costs can access what they need to make that a reality.    Is it possible we can adopt some of the financing initiatives from the developing world and make them work in the UK to lift people out of fuel poverty?  If the savings are apparent, it should be possible to put in place a level of credit facility that would allow people to purchase the devices that would help them to save that energy in the first place.   The lessons of microfinance in the developing world need to come into play here in the UK.

Of course this goes for small businesses too – energy efficiency could save businesses huge amounts of money but if you can’t access the credit you need to invest in energy saving kit, how do you get there?  On a rare evening lounging around watching TV, I happened to catch a programme on Channel 4 last week called  ”Bank of Dave” where a Burnley business has been attempting to kick start lending to small businesses to whom their “normal” banks just aren’t interested in lending – essentially offering better rates for deposits than the banks and being amenable to lending to businesses.  It looks very much like there’s an opening for someone to do this for energy saving too.

The Government’s green deal is intended to address this for householders, but there are so many types of energy user that there is no one-size-fits-all approach.  And as there continue to be difficulties in accessing finance from banks, there is a need for a different approach.  People are realising this and from crowdsourcing funds to matchmaking lenders and borrower to community share issues, we are seeing a real transformation of how we can access finance.

We can invent as many gadgets and gizmos as we want to improve our energy use, be more efficient, generate our own power – but if the customers who need them can’t access the funds to purchase them, they’ll stay shiny and new on the shelves and not doing what they need to.