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 World
Bank 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 Scheme
for funding, NABARD, and Make in India are the most important sources of sustainable financing for Small and Mediumsized
businesses enterprises (MSME). As part of its commitment to achieving net-zero emissions by the year 2070, India
has several MSMEs and SMEs involved in the Projects of solar power plants; renewable energy; green machinery; waste
management; electric vehicles (EV); clean energy; recycling; poverty alleviation; and energy conservation. As a way to
help the green economy flourish and to satisfy the sustainable development goals (SDGs) and ESG (Economic, Social, and
Environmental) fundraising requirements, the RBI has determined that eco-friendly and environmentally friendly initiatives
should be prioritized for priority sector lending (PSL). This article analyzes financial mechanics for green production and
sustainable development using theoretical notions. Increasing the ESG to support long-term economic growth and the
sustainability of small and medium-sized enterprises (SMEs) and large corporations (Government of India) through climate
change missions is essential.