Increasing MSME access to climate finance

The document outlines barriers to climate finance for MSMEs in developing countries and proposes solutions focused on improving the enabling environment, increasing awareness, and tailoring financial products. It specifically recommends that the GCF's MSME Program target the informal sector and high-impact sectors like agriculture and manufacturing, using the pilot phase to test efficiency and reach.

• MSMEs represent 90% of private businesses in developing countries, meaning small operational changes across this group have significant potential for climate impact.
• Access to climate finance for MSMEs is hindered by three primary barriers: weak policies and financial infrastructure, a lack of knowledge and awareness regarding opportunities, and financial products that are poorly suited to MSME needs due to high risks and costs.
• To increase finance flow, the GCF can implement solutions such as supporting national green incentives and standards, creating matchmaking platforms to link investors with MSMEs, and using risk-sharing instruments like grants and first-loss investments.
• High transaction costs associated with small ticket sizes necessitate that finance providers work through local financial institutions and MSME aggregators to ensure efficiency.
• Because nearly 300 million MSMEs in developing countries operate in the informal sector, the GCF must test alternative collateral approaches and credit worthiness assessments to reach them.
• The trade, agriculture, and manufacturing sectors have the highest concentration of MSMEs, while wastewater, small hydropower, and water technologies are projected to support the highest number of MSMEs in climate technology.

APA

Climate and Development Knowledge Network (2015). Increasing MSME access to climate finance. https://cdkn.org/sites/default/files/files/20150924-MSME-Policy-Brief-vF-2.pdf

Chicago

Climate and Development Knowledge Network. Increasing MSME access to climate finance. 2015. https://cdkn.org/sites/default/files/files/20150924-MSME-Policy-Brief-vF-2.pdf.

Wikipedia

{{cite report |author=Climate and Development Knowledge Network |title=Increasing MSME access to climate finance |date=September 2015 |url=https://cdkn.org/sites/default/files/files/20150924-MSME-Policy-Brief-vF-2.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climateanddevelopmentknowledgenetwork2015increasing, author = {{Climate and Development Knowledge Network}}, title = {{Increasing MSME access to climate finance}}, institution = {Climate and Development Knowledge Network}, year = {2015}, month = sep, url = {https://cdkn.org/sites/default/files/files/20150924-MSME-Policy-Brief-vF-2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }