What’s stopping small businesses going green? Cash

(Context, 27 Jan 2023) How could small enterprises – which create 7 in 10 jobs in emerging economies - get the cash they need for a green shift?

Oliver Greenfield is convenor of the Green Economy Coalition.

Small businesses are the backbone of developing economies. According to the World Bank, micro, small and medium enterprises (MSMEs) account for at least 40% of GDP and create 7 in every 10 jobs in emerging economies.

These businesses have huge potential to drive development and catalyse national and global transitions to a fairer, green economy, but they can’t access the finance they need to grow.

The gap between the finance these businesses can access and what they actually need – the so-called ‘MSME financing gap’ in developing countries – was estimated at $5.2 trillion in 2017, 40% more than they currently have access to.

This is a big problem. Not being able to access finance stifles economic growth, meaning fewer jobs and lost revenues for businesses, communities and governments. Lack of finance also leaves MSMEs exposed to risk.