You are here:Home / ESG & Carbon / Newsletter / Topic of the month February 2012: Green Microfinance

Topic of the month February 2012: Green Microfinance

green microfinance


Green Microfinance - linking Microfinance and Carbon

The concept of Microfinance provides small loans of approximately USD 50 to USD 1000 to so-called Micro-Entrepreneurs, who were traditionally excluded from financial markets. Especially in developing and emerging countries these loans have already helped millions of people to build up their own business and escape from poverty.

Today, this concept is being  extended by a new dimension: “Green Microfinance” additionally seeks for an ecological benefit. It supports Micro-Entrepreneurs to invest in a new technology such as efficient cook stoves or small solar stations which are generating a return and reducing spending for resources such as petroleum or fire wood. The herewith related reduction of carbon emissions is generating returns from CO2 emission certificates which can be used to subsidize the Micro-Entrepreneur to make the investment affordable.

However, this approach also involves additional challenges and risks. The approval of CO2 certificates is a protracted and costly process which needs to be financed and also includes increased monitoring requirements. There is also the risk of offering consumer credits which could lead to over indebtedness and credit default of Micro-Entrepreneurs.

Nevertheless, this approach can provide philanthropists with a possibility to reach an even deeper impact of their investments and Green Microfinance will certainly face an increased importance in the near future.


Long version
If you are interested in detailled information about this topic, please contact the yourSRI team to provide you with the long version of this article.

The long version includes:

    • latest statistics from Microfinance
    • detailled descriptions of challenges in Green Microfinance
    • possibilities for risk management in Green Microfinance
    • sources for further information

Free of charge for all subscribed yourSRI members (yourSRI Membership). All other can get a copy of the long version for a fee of EUR 80.00.

Contact us to get long version



Q1/2012 - Preview of upcoming "Topics of the month":

February 2012: Green Microfinance - linking Microfinance and Carbon

March 2012:Responsible Investing for Foundations

April 2012:Transparency Survey 2012 - Responsible Investing & Philathropy Services




Filed under: hotTopic