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close this bookPhotovoltaic Household Electrification Programs - Best Practices (WB)
close this folderAttaining financial sustainability
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View the documentTerms and conditions
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View the documentEnforcing repayments
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Enforcing repayments

6.13 Disconnects for extended non-payment of fees can be an effective tool for cost recovery. Even though the need for a strong disconnect policy is recognized in theory, in practice, it is difficult to disconnect households in arrears, unless an external agency takes responsibility for such an unpopular action. The ADESOL program in the Dominican Republic has yielded a high loan recovery rate since its loan fees are collected by local representatives and societal pressures to honor one's debt are high. Societal pressures might not always function this way, and local solar home systems organizations might not always be the most effective fee collectors. In the Philippines, an impartial outside organization had to be hired for fee collection tasks, while the local solar home systems company continued to provide solar home systems service and maintenance. In Tuvalu, fee collection was undertaken by a national organization to avoid problems due to patronage and family ties (Conway and Wade, 1994). The Pansiyagama Project in Sri Lanka originally had no local organization for fee collection. This was a major issue until the government agency contracted with a private company to provide maintenance services and collect fees.