13.07.2017 · Category: SWITCH-Asia Network Facility

Green Finance Opportunities for Micro, Small and Medium-Sized Enterprises in Asia

(Right to left) Representatives of the Asian Development Bank, European Bank for Reconstruction and Development, ADFIAP and European Commission speaking at a panel on blended finance during the SWITCH-Asia workshop in Bangkok in May 2017. (Source: SWITCH-Asia Network Facility)

To date, the SWITCH-Asia grant projects have engaged more than 30 000 micro, small and medium-sized enterprises (MSMEs) in developing Asian countries.
During the implementation of SWITCH-Asia grant projects, many of these companies became convinced that investing in resource and energy-efficiency as well as other environment-friendly technologies would benefit their business via enhanced competitiveness and improve the livelihoods of the communities where these MSMEs operate.

This could be a particular success story on its own, were it not because of the notorious difficulties for Asian MSMEs to access credit for such investments. These difficulties have many well-known causes, ranging from the informal set-up of many companies to insufficient or inadequate bookkeeping records, from missing collaterals to the lack of skills within companies and banks to formulate and assess the technical and financial viability of environment-related investments.

In the last decades, development institutions and projects have started reacting to these shortfalls by providing technical assistance to companies and banks, supporting them to understand, formulate and assess business plans and investment proposals that contribute to enhanced environmental performance. Noteworthy examples are the efforts undertaken by the SWITCH-Asia project SMART Myanmar II and the comprehensive Green Finance Studies published by the SWITCH-Asia Network Facility.

To further enhance access to credit for MSMEs, the EU contributed around EUR 9 Million to the Blue Orchard managed Microfinance Initiative for Asia (MIFA).
At the recent SWITCH-Asia Networking Event in Bangkok, Blue Orchard presented this fund to the audience, with a presentation also available here. The MIFA Fund provides loans at market rates, coupled with technical assistance, to MIFA Institutions (MIFIs) in the SWITCH-Asia target countries, and beyond. These loans enable MIFIs to expand their credit portfolio and on-lend to local MSMEs that propose environment-related investments.

Such MIFIs are ideal contact points for MSMEs affiliated to SWITCH-Asia projects, which are planning small investments to enhance their environmental performance. To view the financing opportunities offered, the Network Facility publishes here the MIFIs hitherto contracted, together with links to their websites, so that interested SWITCH-Asia projects and MSMEs can identify and contact relevant MIFI counterparts in their countries.