MSMEs & Green Transition: Skilling and Loans Key to Success, Says WRI India CEO

Madhav Pai, CEO of WRI India, emphasized that skilling programs and access to loans through schemes like Mudra will be essential for Micro, Small, and Medium Enterprises (MSMEs) to successfully navigate the green transition. Speaking on Wednesday, Pai noted that MSMEs are highly vulnerable to climate shocks, making the shift toward environmentally sustainable practices crucial for their survival.

“MSMEs need to make the green transition to survive in the face of growing climate challenges,” Pai said in an interview. He pointed out that economic viability and incentive programs, combined with capacity building and skilling initiatives, are essential to encourage MSMEs to embrace sustainable practices.

Pai cited an example from the textile industry, stating that it can no longer rely on pet coke due to increasing environmental regulations. “With 13 of the world’s 20 most polluted cities located in India, there are now stringent measures in place to prevent such practices,” he explained.

According to Pai, the green transition requires increased capital and capacity building for MSMEs. Speaking at Connect Karo, WRI India’s annual event that brings together global and Indian leaders to tackle environmental challenges, he stressed the need for financial instruments that offer longer-term loans and skilling programs designed for the MSME sector.

“Many MSMEs are struggling with their ability to borrow funds,” Pai noted, adding that programs similar to the Mudra loan scheme are needed to help MSMEs access credit. The Mudra loan scheme, launched in 2015 under the Pradhan Mantri Mudra Yojana (PMMY), aims to provide financial support to micro and small enterprises.

Despite these challenges, Pai emphasized that MSMEs must make the green transition to remain competitive. “The green transition is not only necessary for MSMEs to become resilient to climate disasters but also to ensure that they produce market-acceptable products,” he said.

Pai also highlighted the potential for significant job creation in the green sector, predicting that one to three million green jobs could be generated annually in the construction and MSME sectors over the next few years. “This represents a substantial decarbonizing opportunity for both MSMEs and the construction industry,” Pai added.

WRI India, a legally registered charity under the India Resources Trust, is committed to promoting environmentally sound and socially equitable development by providing objective information and practical proposals.

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