An Analysis of Impact of Climate Finance on MSMEs and Entrepreneurial Growth

Abstract

Improved development and better financing for economic growth may be achieved through sustainable Finance (SF).The natural system must be protected and restored to achieve sustainable development. SIDBI, NITI Aayog, and the WorldBank work together to make SF available to businesses of all sizes, from Microenterprises to Multinational conglomerates.Financial instruments such as climate funds, green bonds, impact financing, social bonds, microfinance, the SIDBI SF Schemefor funding, NABARD, and Make in India are the most important sources of sustainable financing for Small and Mediumsizedbusinesses enterprises (MSME). As part of its commitment to achieving net-zero emissions by the year 2070, Indiahas several MSMEs and SMEs involved in the Projects of solar power plants; renewable energy; green machinery; wastemanagement; electric vehicles (EV); clean energy; recycling; poverty alleviation; and energy conservation. As a way tohelp the green economy flourish and to satisfy the sustainable development goals (SDGs) and ESG (Economic, Social, andEnvironmental) fundraising requirements, the RBI has determined that eco-friendly and environmentally friendly initiativesshould be prioritized for priority sector lending (PSL). This article analyzes financial mechanics for green production andsustainable development using theoretical notions. Increasing the ESG to support long-term economic growth and thesustainability of small and medium-sized enterprises (SMEs) and large corporations (Government of India) through climatechange missions is essential.