Green Credit Guarantee Schemes for MSMEs

Climate change and environmental degradation pose a significant risk to the performance, competitiveness and sustainability of MSMEs in developing countries.

Contributing significantly to a country's gross domestic product, MSMEs can play a significant role in strengthening a country’s resilience to climate change. This report elaborates on policy considerations for the implementation of credit guarantee schemes (CGSs) that can be used to support green lending to MSMEs. 

The global experience of CGSs to support the financing of green initiatives of MSMEs is very limited, but several AFI members have implemented MSME CGSs with varying design approaches, as highlighted in this report. 

AFI's Inclusive Green Finance workstream is part of the International Climate Initiative (IKI), supported by the German Federal Ministry of the Environment, Nature Conservation and Nuclear Safety (BMU), based on a decision by the German Bundestag.