Green finance opportunities: Karandaaz chief explains how SMEs can be successfully persuaded

ISLAMABAD: Dr Shamshad Akhtar, Chairman, Karandaaz Pakistan, Wednesday emphasised that the government should provide a holistic framework, policy development, incentives and linkages around climate, sustainability and finance to persuade small and medium enterprises (SMEs) to take green finance opportunities.

She was speaking at the Global SME Finance Forum which held its virtual edition of the 2021 Global SME Finance Forum on Wednesday. Global SME Finance is the largest, technically in-depth, and geographically diverse conference on SME financing hosted around the world each year.

Dr Akhter, while speaking to the international audience in one of the sessions related to “Climate Finance: Views from South Asia and Middle East” pondered upon how Pakistan can create a holistic financial structure around climate. Considering Pakistan’s vulnerability to climate change, the government and other stakeholders should work on strengthening and preparing SMEs to take their place in a potential green energy revolution, she emphasized.

Dr Akhter, while profiling Pakistani SME sector, explored why greening SMEs is critical for the country. The sector contributes 30 percent in the GDP, responsible for a large chunk of exports and 80 percent of the non-agricultural labor force belongs to SMEs.

She was of the view that SMEs should be the centre of innovation as the sector was responsible for substantial employment generation. While explaining about Karnadaaz’s work, she said, “Karandaaz is working on a framework for SMEs to promote their access to the right mix of financial and physical resources. Organisation is working towards making SMEs realise the significance of resource efficiency and developing a nexus between green finance and financial inclusion to understand the true potential of a circular economy.

Momina Aijazudin, Global head of Financial Inclusion was hosting the session and reemphasized issues flagged by the speaker. “15 percent energy usage could be saved in Pakistan through conservation and adopting energy efficiency measures,” she concluded the session with these recent findings of IFC regarding Pakistan’s energy sector.

The conference this year, invited global thought leaders, climate finance advocators, leading experts, and practitioners in the field of SME finance to share their visions, insights, and experiences in promoting green finance for SMEs. This year’s Global SME Finance Forum focused not only on the importance of greening SME finance and its role in promoting a more resilient and sustainable growth of the SMEs post-COVID-19 but also addressed some of the key issues and challenges especially on greenwashing, data benchmarking, and verification and misalignment between supply and demand.

Copyright Business Recorder, 2021