Climate Smart Financing for Rural MSMEs: Enabling Policy Frameworks

Climate change increases risks and presents significant challenges as well as potential opportunities for rural Micro, Small and Medium Enterprises (MSMEs.) However, financing is crucial for enabling these MSMEs to adopt needed practices and investments in technologies and approaches that are climate smart. This is particularly challenging for those MSMEs in the rural and agricultural setting which are most vulnerable and already have the most difficulties accessing finance.

This document presents a synthesis of the key lessons and implications of climate change needs and solutions for MSMEs in developing countries with an emphasis on the implications for governments and development agencies to consider. It is enriched with many case examples of practices implemented around the world. Based on this analysis, evidence from the case studies and the modeling of climate smart MSMEs, this paper elaborates policy options for G20 policy makers.