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Strengthening access to inclusive finance for local green entrepreneurs in South Africa

A new Policy Brief from our South African partners looks at barriers to local green enterprise face and highlights solutions

By Elize Hattingh Member · 27th January, 2023
Ansie Potgieter Unsplash

In South Africa, Local Green Enterprises are vital to level up and decarbonise the nations’ economy. While there are ambitious plans to reduce greenhouse gas emissions by 2030, small local green enterprises (LGE) remain at the fringe of the debate despite rhetoric to the contrary. They have huge potential to make this happen. They are highly innovative, boost local economies, reduce inequality, build economic empowerment, foster a sense of community and are important drivers of new-era social green business.

But at the heart of this lies money, or rather the lack of it. Small enterprises and green enterprises find it almost impossible to access loans or investment. Financiers are wary of risk to the point that they avoid small green enterprises. While banking sees the need for green investments, this is only through the lens of regulatory compliance. They seem not to see the opportunity.

Climate change is raising red flags that should not be ignored. The need for the world to move rapidly towards more sustainable, low carbon and inclusive economies is urgent.”

This Policy Brief from GEC member TIPS looks at barriers that LGEs face and highlights areas that policymakers are best placed to address. One of the most critical barriers that this brief will examine is access to inclusive finance, including recommendations and examples of innovative finance mechanisms. It provides clear guidance that we recommend for donor and sustainable finance policy makers in South Africa, and indeed everywhere. This story is indeed a story of everywhere.

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