Financing Mitigation and Adaptation Projects (FMAP) in Indian MSMEs

Micro, Small, and Medium Enterprises (MSMEs) are a major contributor to GDP and employment in India. The MSME sector is also a significant emitter of greenhouse gases and at the same time faces high vulnerability to extreme weather events. Barriers such as a lack of affordable financing and limited technical know-how severely restrict the urgent adoption of low emission and climate-resilient practices among Indian MSMEs.
The Small Industries Development Bank of India (SIDBI) intends to address these barriers through low-interest local currency MSME loans and capacity building. By leveraging the last-mile connectedness of local financial institutions, SIDBI also helps local financial institutions integrate climate finance into their lending practices. The MSME loans target mitigation investments in energy-intensive clusters and adaptation investments in agriculture and water sectors in climate-vulnerable regions.

The programme aims to extend loans to around 10,000 MSME beneficiaries and is expected to contribute to the creation of around 420,000 jobs in the related supply chains.