Consumer Credits - For Renewable?

Banking sector in Indonesia is not yet familiar with renewable financing, although recently some small renewable projects were also financed by banks (e.g. Mandir Syariah, Mandiri etc.). For banks, consumer loan or credit is the big business. One can find many advertisement about car loan, house loan, and credit cards offer. I believe most of the consumption in Indonesia, especially in urban areas (i.e. Jakarta) is financed by consumer credits via credit cards.

Credit card penetration is very high right now. People can easily have credit cards. As far as I remember, getting approval for a credit card is harder some years ago. Nowadays, photocopy of ID card and salary slip can give you access to credit card. This mode of marketing has made many people trapped in consumerism and debt.

To make people use their cards, credit card issuers create programs such as discount in special shopping places etc. They also create "zero interest" program for buying special items such as computers, handphone, watches, or other gadgets. This kind of program is a good deal for real shoppers and "life style" followers. This kind of program might also be used for renewable energy market penetration.

So, the target will be urban people. They need lifestyle and also need "pride" or "respect". Some people think that when you are able to buy expensive items, you will get respect from other people (although one gets it by credit...). Some renewable appliances for example solar water heater is still a "luxury" good. In the Indonesian tax regime, solar water heater is still classified as luxury good with higher tax rate. Only rich people buy solar water heater. I do not know their basic reason to buy it, but I believe trend and pride are two of the reasons.

Then, if it is expensive, why not bank credit pay it in front? The consumer then have to pay the installment to the bank? Why not make solar water heater as one of the "zero interest" goods in the marketing flyer of credit cards? I think this will work, especially when the cost of LPG and electricity is certainly rising. Why not making rich people use it more and let them have it easily via bank credits.

The application of this idea for renewables might still be limited now. I can only see solar water heater and solar home system for emergency lighting. Other form of renewable? I do not know. Maybe energy efficient home appliances can do...mmm that will be very cool if banks can give offer for energy efficient appliances. Let's hope that the banks hear this....