Reinforcing Microfinance to Encourage Green Investments in Small Businesses and Low-income Households in India
The Microfinance Initiative for Asia (MIFA) Debt Fund was co-funded by KfW, the German Development Bank and the International Finance Corporation and is being administered by BlueOrchard. With a net asset value of USD 175 million, the MIFA is the first microfinance initiative of its size to exclusively target Asian microfinance institutions (MFIs), reaching out to 33 MFIs across 9 countries.
The MIFA established a technical assistance facility of EUR 3 million, a portion of which is being used to hire Econoler to assist in carrying out the investment appraisal process and strengthening the MFIs’ green lending capacities.
The microfinance portfolio will target micro-borrowers, such as micro and small businesses and low-income households to purchase solar home systems, efficient cookstoves and efficient technologies (lighting, refrigeration, motors, and pumps).
The technical assistance is designed to support Indian MFIs in accomplishing their objectives regarding lending to green projects by micro-borrowers, such as solar systems to low-income households.
By promoting clean energy sources and expanding energy access among low-income households, this project is a prime example of how carbon reduction initiatives can meet international development objectives.