Financial Sector Credit Facility for micro, small and medium enterprises (MSMEs) in 4 African Countries

Effective development of the micro, small and medium-sized enterprises (MSMEs) sector is crucial for long-term sustainability and economic growth for emerging markets. Scaling climate action through MSMEs has revealed that there is evidence of climate risks and opportunities for MSMEs in the climate change response landscape as well as a potential for MSMEs making green investments.

Having identified access to affordable finance for African MSMEs as a key challenge in the African private sector’s participation in Nationally Determined Contributions (NDC) implementation, the climate change and green growth department (PECG) and the Financial sector development department (PIFD) joined forces to create a credit facility to support African financial institutions and SMEs to access climate finance and promote green investment in the continent as well as support Youth led businesses.

OneWorld, with Natural Eco Capital, developed the design for a green credit facility that will provide capacity support to MSMEs, assist in the de-risking and development of bankable green projects and support MSMEs to access climate finance.

The project facilitated bridging the gap for accessing climate finance and increasing alignment with countries’ NDCs as well as crowd-in private sector investments as climate investments become more common. The assignment included the development of a funding proposal to the Green Climate Fund to support the development of the green credit facility and related capacity building.