Adopting Dual Financing Approach To Boost MSMEs' Contribution In Renewable Energy Transition: IREDA CMD
Amid the ongoing COP28 climate summit, Pradip Kumar Das, Chairman and Managing Director (MD), Indian Renewable Energy Development Agency (IREDA) has said that a dual financing approach is being adopted to elevate the contribution of micro, small and medium enterprises (MSMEs) in renewable energy transition.
While emphasising both MSMEs' economic and environmental contributions, he reiterated IREDA's commitment to promoting environmental sustainability. The commitment involves increasing the participation of MSMEs in the renewable sector through accessible loan facilities, reinforcing the organisation's dedication to a sustainable future.
The CMD stressed the pivotal role that MSMEs play in environmental sustainability and informed that MSMEs currently constitute approximately two per cent of the company's total loan assets in FY22. He added, "IREDA is dedicated to continuously addressing the challenges faced by MSMEs and is actively working towards enhancing their participation in the renewable energy sector."
He also underlined that the agriculture sector and MSMEs are the largest contributors to gross domestic product (GDP) growth.
Das acknowledged that a significant obstacle for MSME entrepreneurs is securing loans at reasonable interest rates. However, IREDA has made substantial progress in improving the ease of doing business.
This includes the implementation of faceless loan sanctions and disbursements, a reduction in the documentation involved in the loan sanction and disbursement cycle, as well as an expansion of geographical reach across the country.
Highlighting a successful case study involving lending to e-rickshaws through Mufin Green Finance, Das shared that IREDA intervened to lower existing interest rates ranging from 30-36 per cent to 18 per cent. Leveraging its track record of making previously unbankable sectors bankable, he expressed confidence that the company’s initiatives would result in increased MSME participation in the green energy sector.
The CMD also underscored IREDA's unwavering commitment to encouraging farmers nationwide to reduce their carbon footprint through financing under the PM-KUSUM scheme.
