Introduction on Green Inclusive Finance (GIF)
The Philippines has long been vulnerable to extreme weather events, having an average of 20 to 21 typhoons each year with 8 to 9 making landfalls. However, over the past few years these typhoons i.e Super Typhoon Haiyan, has struck the country more often with severe damages to lives and properties and such events are claimed to be caused by climate change.
While this phenomenon is seen as a threat to the country, it may also be seen as an opportunity for each stakeholder to initiate programs to minimize the impact of climate change and contribute to the 2-degree Celsius target – the initiative of keeping the global mean temperature rise below 2 degrees Celsius against pre-industrial temperature levels. This is also true for microfinance institutions (MFIs) as they have started programs to achieve their third bottom line or environmental sustainability.
Green Inclusive Finance is one of the emerging approaches in the financing sector that combines the triple bottomline. Based on the recent IFC report, the Green Inclusive Finance are financial services that support economic growth in a clean, resilient and sustainable manner, and focus on the base of the pyramid (BOP) including micro, small, and medium-sized enterprises in low-income countries or such subsets of population within other developing countries.
It has a multi-dimensional purpose: for economic development, for social inclusion and for environmental sustainability. It encompasses all traditional forms of Microfinance as well as SME finance, by specialized institutions, including Banks, Non-Bank Financial Institutions, Funds, etc. It focuses on all instruments, products and services that address climate change: mitigation and adaptation, solutions for waste, water and sanitation management, land management and ecosystem conservation, organic farming, access to clean and reliable energy, energy efficiency, etc.
Overview of Green Inclusive Finance under the MCPI Institutional Strengthening Program
In 2016, MCPI adopted Green Inclusive Finance (GIF) as one of the main components of the MCPI institutional strengthening program. A comprehensive training on green microfinance is being offered as a flagship capacity building program for MCPI members that are interested in implementing clean energy projects. This program builds on the expertise developed by from the Developing Sustainable Energy Access (DevSEA) project, implemented by MCPI in 2013-2016.
Hence, a project under the GIF is being implemented in partnership with ADA of Luxembourg and supported by Ministère du Développement durable et des Infrastructures (MDDI) of the Luxembourg Government.
The project has three key result areas:
- Result 1: The capacity of MFIs to provide green and renewable energy products is strengthened through comprehensive training on green inclusive finance provided by MCPI.
- Result 2: Selected MFIs have a well-defined strategy in place for piloting their green products and services thanks to MCPI’s coaching and mentoring support.
- Result 3: Green microfinance products are successfully tested by selected MFIs under MCPI’s supervision.
GIF Resource Materials
Green Microfinance Training Modules
Module 1: Clean Energy and Renewable Energy 101
This module introduces the fundamental concepts of Clean Energy Financing such as Climate Change, Clean Energy, and Renewable Energy Technology and other emerging trends on environmental preservation. It aspires to generate a better understanding on energy financing and its link to other development aspects among the participants.
Module 2: Energy Research: Introduction to Tools and Methodologies
This module focuses on the tools and methodologies used in identifying the client energy needs and gaps (for both household and livelihood application) and match it with appropriate renewable energy technologies available locally. Ultimately, it extensively discusses the process of conducting an Energy Needs Assessment (ENA) based on the experience from the Developing Sustainable Energy Access (DevSEA) project.
Module 3: Business Planning and Pilot Preparation
This module presents the entire process and preparations needed for the Business Planning and Pilot Implementation of a Clean Energy Financing Solution. It details the nitty-gritty of the Technology and Supplier Selection, as well as its set criteria and the key considerations required. It also shows how to effectively use the Business Model Canvas as a tool to design a plan on how to bring the selected green technologies to the target client-beneficiaries of the program.
Module 4: Monitoring and Evaluation System Design
This module establishes the significance of a Monitoring and Evaluation Plan for a Clean Energy Program which will systematically measure its progress and impact on the individuals it caters to. It also looks at the most important points to consider in the formulation of an M&E Framework and the setting of Key Indicators.
JMH goes SOLAR. The Sustainable Operations of Livelihood Activities and Residences (SOLAR) program of JMH Microfinance, Inc. addresses one of the four “K” areas of the institution’s 4K philosophy for its clients’ holistic well-being – Kabuhayan (livelihood), Kalikasan (environment), Kagalingan (social concern and wellbeing), and Kalusugan (health). The SOLAR program brought to the fore discussions on Kalikasan through renewable energy products.
SEDP-Simbag gets the Green Light. Green Light for Life (GLL) addresses SEDP-Simbag sa Pag-Asenso, Inc.’s environmental stewardship goals while doing its mission of improving the socio-economic conditions of clients.
Informative Videos on Climate Change
The Green Inclusive Finance informative videos aim to increase awareness and understanding on the effects of climate change in key development sectors. The four short, independent but interrelated learning videos were designed to present climate concepts in a simple and visually engaging manner.
What is Climate Change? – This video defines climate change and explains how greenhouse gas emission and other human activities contribute to Earth’s changing climate.
Climate Change and its Effects on Agriculture – This video shows how interrelated issues in the agriculture sector are worsened by extreme and unpredictable weather events due to climate change.
Climate Change and its Effects on Urban Communities – This video illustrates the different challenges brought about by climate change to people living in urban communities.
Climate Change and GIF – This video demonstrates how MCPI and its partner institutions work together in advocating and promoting environmental sustainability through the Green Inclusive Finance initiative.
Green Microfinance Toolkit
The Green Microfinance Toolkit (GMT) is a 5-part knowledge product developed for microfinance institutions (MFIs) to support them in effectively integrating environmental sustainability and mainstreaming green loans in their products and services. The GMT tackles climate change concepts, renewable energy and climate responsive technologies and services to improve MFI clients’ resilience to climate change. The modules also underscore the benefits and impacts of climate lens and the importance of a sustainability strategy in the MFIs’ operations.
The 5-module toolkit is comprised of:
- Toolkit No. 1 – Foundation Concepts: Climate Change Adaptation and Mitigation
- Toolkit No. 2 – Foundation Concepts: Renewable Energy and Renewable Energy Technologies
- Toolkit No. 3 – Climate-adaptive Microfinance Products and Services
- Toolkit No. 4 – Benefits and Impacts of Climate-adaptive Microfinance Products and Services
- Toolkit No. 5 – Integration of Climate Lens to Microfinance Products and Services and its Sustainability
Other Materials Related to MCPI’s Green Inclusive Finance (GIF) Initiative
- Financial Partner Tie Ups
- Financing for DRE – A Guide on End-User Financing
- SELCO Case Studies DRE Bank Financing
- SELCO Experience on Solar Access Program in India
For inquiries on the full version of the Green Microfinance Training Modules, please contact us. Thank you!