Green microfinance strategy for entrepreneurial transformation: validating a pattern towards sustainability

Thursday, 16 February, 2017
This paper by Shahidullah and Emdad Haque (2016), published in Enterprise Development and Microfinance, illustrates a shifted microfinance modality that adopted greening principles towards sustainability. The empirical context of the research was a green microfinance programme implemented by an NGO microfinance institution at two study sites in Bangladesh. The research conceived and tested a microfinance model underpinned by ‘ecological modernization’ and ‘innovation and entrepreneurship’ theories. Field studies were carried out between January 2012 and June 2013 in order to match the ‘theoretical realm’ with the ‘observational realm’. A case study and participatory methods were the primary means of studying the modality and operations of the green microfinance strategy. The study compared the ecological outcomes of green microfinance-assisted enterprises and traditional microcredit-assisted enterprises and measured their greenhouse gas (GHG) emissions. Cool Farm Tool software was used to quantify GHGs. Comparison with a designed experiment shows that micro-enterprises employing green strategies emit less GHGs than the ones with traditional strategies. The research revealed that the microfinance-based greening interventions help to ensure ecological outcomes for micro-enterprises; thus, the combination of the embedded economic and social elements of the classic microfinance model with the new ecological elements supports sustainability.