Why we invested in productive-use asset finance: Unlocking opportunity for Africa’s microenterprises

Co-authored by: Shivani Kotecha and Eliza Hogan

May 26, 2026

Climate ActionClimaFii

Electricity access is expanding across Africa. From newly commissioned mini-grids in rural communities to stronger national infrastructure connecting growing towns, clean and reliable power is reaching more homes and businesses each year. But access alone does not create opportunity. Consider Grace, a tailor in rural Uganda, who gained access to electricity two years ago, yet still cuts and sews by hand, spending hours on work a machine could finish in minutes, simply because she had no way to afford one. For the millions of microentrepreneurs who drive Africa’s local economies, carpenters, welders, tailors, shop owners, and agro-processors, electricity does not automatically translate into higher incomes. Without the right tools and equipment to power productivity, the economic benefits of electrification remain largely unrealized.

This is the gap productive-use asset finance is built to close, and the results speak for themselves. Over 85% of EnerGrow’s business customers report earning more money after receiving an asset loan, and 30% hire additional staff within six months of their purchase. Microenterprises account for more than 80% of Africa’s jobs, yet many operate below their economic potential because they cannot afford income-generating appliances such as fridges, welding machines, maize mills, carpentry tools, or solar-powered irrigation pumps. Traditional lenders rarely offer financing for these assets due to limited collateral and thin credit files. Indeed, there is a more than US $9B financing gap for MSMEs in Uganda alone. The result is a persistent productivity gap: energy access without energy use, electrification investments without financial viability, and businesses without growth.

Productive-use asset finance changes this dynamic. When microentrepreneurs gain access to appliances that help them produce more, serve more customers, and improve product quality, electricity becomes a direct pathway to income growth and resilience. Earnings rise. Repayments are strong. Local economies expand. Utilities benefit from increased power consumption and more reliable revenue streams. It is one of the clearest win-win-win equations in development and climate resilience.

This is why ClimaFii Alliance has invested in EnerGrow, a company reshaping how microenterprises unlock the value of electricity across Uganda. By combining flexible asset financing, business coaching, and data-driven performance tracking, EnerGrow strengthens livelihoods while helping energy providers realize the full economic impact of electrification.

Powering microenterprises through energy productivity

EnerGrow partners directly with power distribution companies like UEDCL in Uganda, mini-grid operators, and asset manufacturers such as Hisense to identify customers who stand to benefit most from productive-use appliances. Through a model that blends financing, customer support, and accountability, EnerGrow enables entrepreneurs to purchase assets that often double or even triple their income. For a tailor, an electric sewing machine reduces production time from hours to minutes. For a shopkeeper, refrigeration expands product offerings and boosts daily sales. For a metalworker, modern welding tools open the door to bigger and more profitable contracts.

Building on its productive-use asset financing model, EnerGrow is expanding into clean cooking through electric cookers and ethanol-based fuel solutions. This reflects a strategic shift toward addressing not only income generation but also one of the largest and most consistent expenses for households and microenterprises: cooking energy. Unlike traditional productive-use appliances, cooking solutions create high-frequency customer engagement and unlock recurring revenue streams through fuel distribution. By integrating both productive and everyday energy solutions, EnerGrow is deepening customer relationships, improving affordability, and strengthening the long-term sustainability of its model.

This model arrives at a pivotal time. As governments and development partners accelerate electrification efforts, utilities face pressure to stimulate demand and improve grid sustainability. EnerGrow solves this foundational challenge by turning new connections into new economic activity. With countries such as Kenya and Uganda receiving support from development partners to develop national productive-use of energy strategies, it is clear that this market segment is a priority and that supportive policies must be developed to encourage market development and investment scale up.

Why ClimaFii is leaning in

At ClimaFii, we believe climate solutions scale fastest when they strengthen microenterprise productivity. EnerGrow embodies this thesis. By aligning energy use with income growth, the company delivers benefits across multiple systems: businesses become more resilient, energy assets become more viable, and local economies become more dynamic.

What distinguishes EnerGrow is its end-to-end approach. Rather than treating financing as a standalone product, the company integrates business coaching, behavioral insights, and energy-use monitoring to ensure that appliances deliver real productivity gains. This reduces repayment risk, increases customer success, and supports long-term financial inclusion by strengthening credit histories and businesses.

EnerGrow is demonstrating that productive-use finance is not just impactful; it is also commercially investable and scalable across markets where energy access must go hand in hand with enterprise development.

Tackling the financing challenge

The biggest constraint to productive-use adoption has always been upfront cost. Even when appliances offer strong revenue uplift, few microentrepreneurs have the savings or collateral required by traditional banks. Electric appliances sit on shelves while demand for their economic benefits remains unmet. Utilities struggle to grow consumption. Energy access falls short of driving prosperity.

EnerGrow bridges this financing gap through asset-backed loans tied directly to business performance. Repayments are structured to match actual cash flow, with flexible terms informed by detailed customer income assessments. By leveraging utility partnerships, EnerGrow can evaluate payment histories and reduce onboarding friction for customers experiencing formal finance for the first time.

ClimaFii is supporting EnerGrow to expand this financial infrastructure with the rigor and scalability required for institutional capital. Together with partner Accion, we are strengthening the company’s financial model, optimizing pricing for portfolio sustainability, and preparing EnerGrow to raise blended debt facilities that will accelerate appliance deployment.

As repayment performance data grows, EnerGrow is building the track record needed to unlock commercial lending into productive-use asset portfolios, shifting the sector from grant dependency to market-ready financial structures. In doing so, the company is paving the way for millions of microentrepreneurs to access the tools they need to grow.

Beyond capital: Building for scale

ClimaFii’s partnership with EnerGrow extends beyond financing to venture-building collaboration that strengthens organizational and commercial readiness for scale. We have worked together to refine the company’s business model and go-to-market strategy, ensuring strong alignment between product offerings, unit economics, and operational delivery. As EnerGrow scales into new markets, clarity about how it expands and how that expansion is financed is essential.

Leadership is a critical part of scale-up success. Through targeted executive coaching and a supported recruitment process for new senior executives, we are helping EnerGrow navigate a transitional period with confidence and resilience. These investments in leadership enable the organization to grow not only in reach but discipline, structure, and accountability.

Operational systems are similarly essential. With enhanced data dashboards and reporting tools designed through our partnership, EnerGrow is now better able to track asset performance, repayment reliability, and portfolio quality in real time. These insights strengthen decision-making, improve customer success, and build credibility with lenders and investors who rely on consistent, verifiable performance indicators.

These foundational advances in leadership, strategy, systems, and finance ensure that EnerGrow is prepared not just to scale, but to succeed in scale.

A productive, inclusive energy future

Productive-use appliances are not simply machines. They are growth engines for the entrepreneurs who fuel Africa’s economies. With the right financing structure, they unlock higher incomes, stronger resilience to climate and economic shocks, and more sustainable utilization of clean energy infrastructure.

EnerGrow is showing what’s possible when microenterprises are empowered to fully harness electricity. Shops become thriving community anchors. Workshops expand into job-creating enterprises. Energy systems become economically viable. And local markets become more vibrant and self-sustaining.

Scaling this future will require partnerships among investors, utilities, financial institutions, and policymakers to unlock a new wave of enterprise productivity. If you are looking for where climate action and economic inclusion intersect, productive-use asset finance is one of the most powerful levers we have.

We are proud to support EnerGrow and invite others who share this vision to join us in expanding a future where every entrepreneur has the tools to thrive.