Arc Finance provides financial support to microfinance and other finance institutions, in addition to energy/water enterprises, to both spur product innovation and to support business incubation for energy and water lending.
Despite recent progress, a clear need exists for innovation in products and business models to reach significant scale in energy lending. Small, local businesses in both the energy and water sectors often lack the resources to experiment with products and processes that will be more affordable or accessible to their customers. A lack of appropriate financing mechanisms forces most energy and water enterprises to use scarce working capital to innovate products that will meet the needs of lower-income populations.
Arc Finance provides innovation funding, or seed capital, to microfinance institutions and energy/water enterprises to develop new products, business models, distribution, and payment mechanisms that will increase access to clean energy and water. This innovation funding is aimed at developing and testing new approaches that have both the potential for rapid scale and are replicable.