Scaling climate-smart agriculture through standardized financing for smallholder farmers in India

• Mar 27, 2026
• 2 min

Erratic rainfall, prolonged droughts, and unseasonal weather patterns exposed smallholder farmers in India to growing climate risks, driving yield losses, rising input costs, and falling incomes. Climate-smart agriculture (CSA) offered a viable pathway to resilience through technologies such as drip irrigation, solar pumps, and biodigesters. However, adoption remained constrained by high upfront costs, limited access to affordable finance, and perceived risks among regulated financial institutions. 

To unlock microfinance and regulated lending for CSA, the International Sustainable Energy Foundation (ISEF) engaged MSC to develop standardized financing products, build feasibility evidence, and support financial institutions to lend for prioritized CSA practices. 

As the lead technical partner, MSC conducted a comprehensive landscaping of CSA technologies and mapped key technology categories to priority crops and geographies. The team identified and aligned borrower segments with suitable CSA solutions and assessed associated credit and operational risks for financial service providers.  

We conducted rapid institutional assessments to shortlist and onboard four microfinance institutions (MFIs), facilitated alignment on program objectives, and supported the execution of memorandums of understanding. Portfolio and value chain analysis followed, alongside field visits to assess borrower demand, which informed the development of CSA financing product notes, operational processes, and service-level agreements between MFIs and CSA solution providers. 

Partnerships between MFIs and technology providers were established with MSC’s support.  

We also facilitated focus group discussions for demand side assessment of the technologies and key informant interviews to prepare a comprehensive report documenting outcomes, learnings, and recommendations. The project aimed to pilot CSA financing products with select MFIs and culminate in the standardization and wider adoption of CSA financing products and reporting systems across regulated entities.  

The project resulted in documentation of financing products. It generated a consolidated knowledge base on CSA financing practices, highlighting scalable models and institutional pathways for wider adoption. In addition, dissemination engagements enabled stakeholder alignment on practical pathways for mainstreaming climate-smart agriculture financing across regulated financial institutions.  

ISEF commissioned the project.