MicroLoan Malawi is taking a remarkable step towards environmental sustainability and social responsibility with its new initiative to create ESG (Environmental, Social, and Governance) compliant loan products. This exciting venture, in collaboration with consultants from the Franklin Business School and support from GIZ, aims to provide financial assistance to growth-oriented clients in Malawi while promoting eco-friendly and socially responsible business practices.
MicroLoan Malawi understands the importance of supporting businesses that not only drive economic growth but also prioritise environmental and social responsibility. Here are some of the key features of their innovative ESG compliant loan products:
One of the loan purposes is to fund solar-powered irrigation systems. These systems offer an eco-friendly alternative to fuel-powered pumps, reducing emissions and pollutants. Solar pumps come in various sizes and power options, making them accessible to a wide range of entrepreneurs. This initiative aligns perfectly with ESG compliance by promoting sustainable energy use.
MicroLoan Malawi is also supporting the adoption of improved and adapted seeds that are heat and drought-tolerant, particularly for crops like maize, cowpeas, and pigeon peas. This not only enhances agricultural productivity but also encourages climate-smart practices such as risk reduction, soil and water conservation, and efficient water management. It has positive effects on biodiversity and ecosystem services, ticking the ESG compliance boxes.
For rural butcheries and grocery stores, MicroLoan Malawi is introducing solar-powered fridges. These fridges are not only energy-efficient but also help reduce greenhouse emissions. They play a crucial role in preserving food items, thus reducing food loss.
Testing and Training
To ensure the success of these ESG compliant loan products, MicroLoan Malawi plans to test them with 50 clients. Furthermore, the loans will be paired with comprehensive training on how to manage ESG risks effectively. This holistic approach ensures that businesses not only benefit individual women and their families but also contribute positively to their communities and the global environment.
Addressing Climate Change
MicroLoan Malawi recognises the urgency of addressing climate change, both in terms of its causes and consequences. By integrating an ESG framework and developing ESG compliant loan products, the institution can assess and manage the environmental and social risks associated with financed projects.
Upskilling and Supporting
Understanding the unique needs of its target audience, MicroLoan Malawi is committed to upskilling and supporting clients for success. The introduction of specialised training programs covering financial literacy, business management, and ESG compliance ensures that entrepreneurs have the knowledge and skills to thrive in their ventures.
MicroLoan Malawi’s initiative to create ESG compliant loan products demonstrates its commitment to improving the livelihoods of smallholder farmers and promoting sustainable practices of natural resource use. By combining financial support with environmental and social responsibility, MicroLoan Malawi is shaping the next generation of entrepreneurs who are not only successful but also mindful of their impact on the planet and their communities. This initiative serves as a shining example of how finance and sustainability can go hand in hand for a brighter future.
Published on: 03/10/2023
