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Green Recovery: COVID-19 has exposed our economic system as unjust and unsustainable.
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Financing local green enterprises

Our report on closing the funding gap for sustainable micro, small and medium sized enterprises in developing countries

By GEC GEC · 27th September, 2022
Bird Small Green
Photo by Shlomo Shalev, Unsplash

Small is powerful.

Micro, small and medium sized enterprises, often referred to as MSMEs, represent the backbones of developing and emerging economies. Whilst they comprise a significant proportion of countries productivity and employment, we see time and time again that they are largely neglected in terms of financial regulations and support.

The potential these MSMEs have in greening our economy is huge.

The case for investment in MSMEs has been made but this hasn’t resulted in action. Our report with Finance Watch sets out the experiences mapped by Green Economy Coalition hubs and the barriers that exist. We have concluded that:

  • MSMEs have a great potential to conduct sustainable activities but often lack supportive legislation
  • Informality has mixed impacts and varies in intensity from one country to another
  • Informality is a reality that needs to be taken into account in building more environmentally sustainable and resilient economies.
  • Access to formal sources of finance varies among countries but is the most stringent issue for green MSMEs and LGEs
  • A set of internal and external barriers explain the persistence of these financing gaps
  • Whilst many of these barriers can be overcome by improving national regulations, the unequal and challenging integration of developing and emerging countries in the global economy also plays a significant role.

Read the report now or join the debate on Twitter, Facebook and LinkedIn. You can also access the national papers that contributed to this report in our footnotes section below.

Footnotes

1

CANARI Technical Report № 405: Enhancing financing for Local Green-blue Enterprises in Trinidad and Tobago: Challenges and opportunities

2

The European Green Deal: Context, challenges and opportunities for South African SMEs operating in the green economy

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