Standard Chartered Eyes Partners for Green Loans
In a promising move toward inclusive climate finance, Standard Chartered Bank has announced its intent to introduce green loans for small and medium-sized enterprises (SMEs) in India. The British banking giant is actively seeking partners who can help track the use of these loans and measure their carbon footprint, setting the stage for a new chapter in green finance targeting India’s vast SME sector.
The announcement was made by Xie Wen, Global Head of SME Banking at Standard Chartered, during her visit to India. Drawing from successful pilot projects in Singapore, Wen shared the bank’s plan to replicate and scale green lending initiatives across India—one of its top three SME markets globally, alongside Hong Kong and Singapore.
The Green Finance Vision
Green loans are financial products specifically designed to fund environmentally sustainable projects, such as clean energy adoption, pollution reduction, or sustainable manufacturing practices. They form a critical component of the bank’s broader Environmental, Social and Governance (ESG) strategy, aligning with global goals to combat climate change and support low-carbon business models.
Standard Chartered already offers green deposits and structured sustainability-linked products, but this is the first time the bank is actively expanding into green lending for SMEs in India. According to Wen, partnering with credible data providers who can track loan utilization and verify carbon footprint reductions is essential to ensure transparency and accountability.
“Tracking the environmental purpose of each green loan is essential. While this data is often available for large companies, it’s far more difficult for small businesses,” Wen noted, highlighting the challenge of verifying sustainability claims in India’s fragmented SME ecosystem.
Seeking Collaboration: Data is Key
Wen emphasized that effective carbon tracking and impact assessment are foundational to responsible green financing. The bank is now scouting for Indian startups, fintech firms, and ESG data providers that can develop tools to monitor environmental metrics tied to SME lending.
These partnerships will help ensure that green loans are directed toward genuinely sustainable initiatives, aligning with international climate frameworks like the Paris Agreement and the United Nations Sustainable Development Goals (SDGs).
Why India? Why Now?
India presents a unique opportunity—and an urgent need—for green SME financing. The country is home to over 59.3 million registered MSMEs, employing more than 250 million people. According to government data, MSME-related products contributed 45.7% of India’s exports in FY24, underlining their economic importance.
Yet, access to climate-aligned capital remains a challenge for these businesses, especially amid rising regulatory pressure and global sustainability benchmarks. Standard Chartered’s initiative is timely, aligning with the Indian government’s own push for a green MSME transformation.
In December 2023, the Ministry of MSME launched the MSE-GIFT (Green Investment Financing for Transformation) scheme to facilitate discounted financing for the adoption of clean technologies. Standard Chartered’s move could complement and extend this scheme with a global banking perspective.
Banking on Impact
Standard Chartered’s green portfolio already stands at $17.39 billion globally, covering sectors like clean transportation, energy efficiency, green buildings, and renewable energy. The bank now aims to scale this impact to the SME level, starting with India.
In addition to offering financial products, the bank is taking steps to educate SME clients on ESG. Wen mentioned that the bank has begun integrating a simplified ESG questionnaire during onboarding to raise awareness and help SMEs align with sustainable business practices from day one.
“It’s about awareness and accessibility,” Wen said. “We can’t expect every SME to have a sustainability consultant. So, we’re simplifying the process, making it educational and enabling.”
India Leads in SME Financing Growth
India has emerged as the top market in terms of asset and financing growth within Standard Chartered’s 18-market SME business portfolio. The bank has around 27,000 SME clients in India and is focused on expanding its presence after divesting from its personal loan business in favour of wealth management, SME lending, and affluent banking.
This growth aligns with the government’s broader mission to strengthen financial inclusion and green entrepreneurship, particularly in Tier 2 and Tier 3 cities where SMEs are flourishing.
A Global Mandate with Local Relevance
Globally, institutions like the OECD have emphasized the critical role of public-private partnerships in enabling the green transition for SMEs. Standard Chartered’s initiative aligns with this guidance, offering scalable, finance-led solutions for an inclusive green economy.
While global banks have largely focused on big-ticket sustainability investments, this move marks a strategic pivot toward grassroots climate action, ensuring small businesses aren’t left behind in the energy and sustainability transition.
Building an Ecosystem for Green SMEs
Standard Chartered’s approach reflects a systems-level thinking—beyond just lending capital. By integrating carbon tracking, ESG onboarding, impact validation, and ecosystem partnerships, the bank is setting a new benchmark for green lending credibility.
If successful, this initiative could not only mainstream green finance for SMEs, but also serve as a replicable model for other emerging markets with similar economic profiles.
Greening Growth for India’s Small Businesses
As India pursues a net-zero future, initiatives like Standard Chartered’s green lending push are critical in ensuring the country’s small business backbone isn’t left out of the clean energy transition.
By combining global best practices with on-the-ground partnerships, Standard Chartered is poised to create a high-integrity, impactful green lending program that meets the dual goals of growth and sustainability.
With the right partners, tools, and policy synergy, green loans for SMEs can become a driving force in India’s climate-smart development journey—proving once again that small businesses can lead big change.
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