2024-09-19 11:00:21
The ecological transition policy aims for carbon neutrality by 2050. In this project, greenhouse gas emissions must decrease by 80% between 2018 and 2050. Green loans and Open Banking are levers for transformation towards a green and sustainable economy.
Understanding the green loan and its challenges
The green loan is also called “eco-loan” or “ecological loan”. This financial instrument was created following the Kyoto and Paris agreements for green and sustainable finance. The system is used to support projects or investments that have a positive impact on the environment. Individuals, companies or communities can apply for this financing solution. This credit finances:
- Energy renovation of buildings;
- Installation of solar panels or wind turbines;
- The purchase of electric or hybrid vehicles;
- The development of clean technologies;
- Establishing waste management systems.
The eco-loan encourages and facilitates the transition to a more sustainable economy. It accelerates the energy transformation of buildings by offering advantageous conditions to borrowers. In addition, the green loan contributes to the fight against climate change. Companies and consumers can invest in low-carbon solutions.
How does the green loan work?
The green loan works like a traditional loan. It is a amortizable loan, the repayment is made over several monthly payments spread over a defined period. The amount granted adapts to your project. You can thus finance your investment in leasing or long-term rental (LLD). The fixed or variable interest rate of the loan is lower than that of traditional loans. The major difference lies in the eligibility criteria, conditions to be met to obtain financing. The loan only concerns ecological projects. On the other hand, it applies to intangible expenses related to the project. The repayment period can be long and varies depending on the financial institution. The loan is flexible. The modulation must be stipulated in the contract to benefit from it. You can request an increase or a decrease in the installments. If your means allow it, early repayment is possible.
State aid and green loans from banks
The government has set up several aids for individuals and businesses. The eco-PTZ or zero-rate eco-loan refers to the system intended for the energy renovation of housing. Owners, tenants or co-owners benefit from an interest-free loan. The amount varies from 10,000 euros to 50,000 euros depending on the work.
You must entrust the work to an RGE professional (recognized guarantor of the environment). Since state aid is limited, banks participate by offering different loan offers. Bank loans are structured around the energy improvement of buildings and green mobility. These loans have a low APR (annual percentage rate). This percentage indicating the cost of the loan depends on the repayment period.
Open Banking, a disruptive technology for sustainable finance
The term Open Banking stands for open banking system. Open banking applies to many financial services. It allows banks to share customer data with an authorised third-party provider (TPP). The authorised third party can be an app, fintech, technology company or financial institution. This service provider must obtain approval from a regulatory authority. Data sharing is done with the customer’s consent.
This innovative concept is based on the principle that data belongs to customers. The Payment Services Directive (PSD2) governs Open Banking. These regulations aim to stimulate competition, innovation and transparency in the banking sector. Sharing is achieved through the use of application programming interfaces (APIs). Users thus connect to multiple services visible on a single interface. This innovation optimizes the customer experience by focusing on decentralization, personalization and security.
Open Banking for Green Lending
Open Banking transforms access to loans by simplifying the application and assessment process. Lenders can quickly and accurately analyze applicants’ financial situation. This approach speeds up loan approvals. With more detailed risk assessments, lenders can offer more favorable rates.
In addition, service providers like Younited use API technology to design personalized offers. Open Banking also facilitates real-time monitoring of the use of funds. The system thus ensures that the green loan actually fulfills its ecological mission. This innovative method relies on secure and encrypted connections. Banking data always passes through protected channels. The reinforced protocols reduce the risks of hacking or information theft.
The traditional customer journey and the online customer experience
In a physical bank, the customer journey begins with making an appointment with an advisor. You must provide numerous paper documents to justify your financial situation. The processing of the application can take several days or even a few weeks. This delay comes from the analysis of your project and the financial risks. It often involves several back and forths to complete the file. Online platforms are available 24/7.
Applicants submit their application at any time, without any business hours constraints. The application begins with a credit simulation. The eligibility criteria and loan conditions are clearly displayed online. You easily understand the terms of your commitment. The application and approval process can be completed in a few hours or even minutes. You can manage your loan directly from your online space.
Necessary supporting documents
Open Banking has reduced the need for physical documents. Bank statements and transaction history are accessible through shared databases. However, legislation requires the provision of certain supporting documents. Proof of identity is still required.
The online platform usually requires a valid passport or ID card. You must also provide proof of address such as an electricity bill or tax notice. Employees send their pay slips. Self-employed workers give their tax returns. For specific green loans, a quote or pro forma invoice is required. For the purchase of an electric car, the registration document or purchase invoice will prove the use of the loan.
The alliance between green finance and Open Banking has democratized access to green loans. Enhanced data security, speed of transactions and transparency make green loans attractive to a wide audience.
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