Client:
International Finance Corporation (IFC)
Implementation date:
2021-2022
project Description:
Gender and climate are strategic priorities for the International Finance Corporation (IFC) Financial Institutions Group (FIG). These issues are addressed through FIG Banking on Women and Climate Finance programs. Micro, small, and medium enterprises (MSMEs), especially those owned by women (WMSMEs), play a major role in developing economies as well as in greening economies. However, there is a lack of actionable data about climate finance directed at WMSMEs, which may be a barrier to bank investments in this area. To close this data gap, IFC contracted Econoler as a research partner to undertake a comprehensive assessment to understand the following: (1) The enabling environment for gender finance and climate action; (2) the green and WMSME sectors; (3) demand for climate finance among MSMEs, especially from WMSMEs; and (4) the supply of climate finance for MSMEs, especially WMSME. The scope of this research is limited to two markets, Cote d’Ivoire and Mexico.
The objective of this research project is to identify and assess the business and impact cases for investing at the nexus of gender and climate finance for banks and non-bank financial institutions. It is focused on two segments:
(1) WMSMEs in the value chains of green sectors such as renewable energy, green buildings, affordable housing, green transport, and climate-smart agriculture; and
(2) Support for climate change mitigation and adaptation efforts by WMSMEs across all sectors (e.g. resource/energy efficiency improvements in their facilities/operations, the circular economy, and disaster management).
Description of services:
Econoler conducted a comprehensive assessment of:
- The enabling environment for gender finance and climate action: Provided an overview on the financial inclusion of WMSMEs and financing of green sectors, including but not limited to renewable energy, energy efficiency, green buildings, green affordable housing, green transport, and climate-smart agriculture;
- The green and WMSME sectors: Identified key sectors with WMSME potential and greening potential in terms of number and size of enterprises as well as the size of opportunities for: (1) Green sectors where there is a concentration of WMSMEs in the value chains and/or a green subsector with potential WMSME participation; and (2) traditional sectors for WMSMEs that are ripe for climate change mitigation and adaptation;
- The demand for climate finance among MSMEs, especially WMSMEs: Designed and conducted a demand-side assessment for climate finance among WMSMEs to establish the demand for climate finance in the sectors identified above;
- The supply of climate finance for MSMEs, especially WMSMEs: Designed and conducted a supply-side assessment, identified a representative sample of financial institutions (and other relevant providers e.g. solar pay-go companies), especially those intentionally targeting WMSMEs, and engaged with them on offering finance to MSMEs to establish the supply of climate finance to WMSMEs through stakeholder interviews. The team also conducted a portfolio review of interested financial institutions.
Econoler provided IFC with two reports that included research findings, recommendations, and conclusions that IFC can use for stakeholder engagement activities in Côte d’Ivoire and Mexico.