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TECNOSOL is a for-profit renewable energy company that provides electricity to families living off the grid in Nicaragua. By selling solar home systems at affordable prices, it enables households to generate their own energy and replace toxic and expensive sources of light and heat like kerosene, diesel and wood.

Founded in 1998, TECNOSOL has grown to comprise 70 to 80% of the solar home system market in Nicaragua. Today, it has 17 regional branches serving extremely remote, rural areas -- including branches in El Salvador, Honduras and Panama. And at the end of 2011, it had installed more than 40,000 solar panels benefiting about 250,000 people and saving them an estimated $1.1 million per month on kerosene.

In addition to lights, TECNOSOL’s solar home systems can run refrigerators, freezers, water pumps, televisions, radios, cell phone rechargers and even electrical fences to increase security for livestock. This is extremely important in Nicaragua, where at least 2.5 million people -- 35% of the population -- live off the grid.

The company imports the solar panels, stores, distributes and sells them, and provides after-sale maintenance and repairs. It is distinguished by its emphasis on customer service at every stage of the supply chain, helping accelerate adoption of solar technologies where people may not otherwise be interested. While solar remains the company’s focus, it has also branched into thermal, biomass, wind and hydro energy solutions.

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A unique approach to lending

Many of TECNOSOL’s customers cannot afford the extremely high upfront costs of buying solar home systems. The lack of financing options is one of the biggest limitations for growth of solar in Nicaragua. Investing in solar is considered to be too risky for most formal financial institutions.

Kiva loans help these households purchase solar home systems. Borrowers are required to make a 20% down payment and pay an annual interest rate of 20% to TECNOSOL. This may sound high, but it’s necessary to help the company reach into rural regions where no other distributors or even microfinance institutions work. TECNOSOL uses all interest to cover operational costs of providing loans, not to make a profit.

Borrowers are helped in making repayments on their loans by saving on kerosene.  The average home solar system replaces about 270 liters of kerosene a year, at a cost of US$1.27 per liter. This translates into annual savings of US$340, which pays back the costs of the home solar system within three years.

Home systems can also help borrowers generate additional income by providing neighbors with electric services like phone and lantern charging. TECNOSOL’s products also enable shop owners and entrepreneurs to increase their productivity through solar-powered refrigerators that eliminate waste, longer store hours, and by selling cold drinks and ice.

Repayment Performance on Kiva

    This Field Partner All Kiva Partners
  Start Date On Kiva Jul 2, 2013 Oct 12, 2005
Total Loans $175,650 $823,222,150
Amount of raised Inactive loans $0 $413,575
Number of raised Inactive loans 0 420
Amount of Paying Back Loans $109,500 $137,581,350
Number of Paying Back Loans 175 163,344
Amount of Ended Loans $66,150 $685,227,225
Number of Ended Loans 144 848,137
Delinquency Rate 6.18% 8.29%
Amount in Arrears $4,802 $7,527,683
Outstanding Portfolio $77,688 $90,811,614
Number of Loans Delinquent 27 24,537
Default Rate 13.63% 1.26%
Amount of Ended Loans Defaulted $9,015 $8,610,143
Amount of Ended Loans $66,150 $685,227,225
Number of Ended Loans Defaulted 27 22,789
Currency Exchange Loss Rate 0.00% 0.41%
Amount of Currency Exchange Loss $0 $3,389,095
Refund Rate 0.00% 0.65%
Amount of Refunded Loans $0 $5,367,575
Number of Refunded Loans 0 5,688

Loan Characteristics On Kiva

    This Field Partner All Kiva Partners
  Loans to Women Borrowers 32.72% 74.68%
Average Loan Size $551 $409
Average Individual Loan Size $551 $646
Average Group Loan Size $0 $1,818
Average number of borrowers per group 0 7.9
Average GDP per capita (PPP) in local country $4,800 $5,942
Average Loan Size / GDP per capita (PPP) 11.47% 6.89%
Average Time to Fund a Loan 1.88 days 6.81 days
Average Dollars Raised Per Day Per Loan $292.95 $60.12
  Average Loan Term 21.44 months 10.98 months

Journaling Performance on Kiva

    This Field Partner All Kiva Partners
  Total Journals 7 402,368
  Journaling Rate 4.48% 40.51%
  Average Number of Comments Per Journal 0.00 0.06
  Average Number of Recommendations Per Journal 0.00 1.38

Borrowing Cost Comparison (based on 2011 data)

    This Field Partner Median for MFI's in Country All Kiva Partners
  Average Cost to Borrower 20% APR 27.00% PY 28.54% PY
  Profitability (return on assets) -16.3% 0.9% -0.70%
  Average Loan Size (% of per capita income) N/A 40.00% 19.50%

Country Fast Facts

Field Partner Staff

Alfonso Barquero
Jonny Castillo
Jairo Cuadra
Vladimir Delagneau
Noelia Ortez
Hector Urbina