Scaling climate-smart agriculture through MSC’s 3R framework for smallholder farmers in India

• Mar 27, 2026
• 2 min

India’s smallholder farmers struggle with growing exposure to climate risks driven by erratic rainfall, prolonged droughts, and unseasonal weather patterns. These challenges lead to yield losses, which increase input costs and reduce incomes. Climate-smart agriculture (CSA) practices, such as drip irrigation, solar pumps, and biodigesters, offer a pathway to resilience. However, adoption remains constrained due to high upfront costs, limited access to affordable financing, and perceived risks among regulated financial institutions.

MSC was engaged to unlock microfinance and regulated lending for CSA and address these challenges. We were tasked 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 solutions to priority crops and geographies. The team identified suitable borrower segments, aligned them with relevant CSA technologies, and assessed associated credit and operational risks for financial service providers.

MSC adopted our repurpose, rejig, and reinvent (3R) framework to transform existing microfinance products into climate-smart financing solutions. We conducted rapid institutional assessments to onboard four microfinance institutions (MFIs), helped align program objectives, and supported the execution of memorandums of understanding. This was followed by portfolio and value chain analyses, along with field visits to assess borrower demand. These insights informed the development of CSA financing product notes, operational processes, and service-level agreements between MFIs and CSA solution providers.

MSC also enabled partnerships between the MFIs and technology providers and conducted focus group discussions and key informant interviews for demand-side assessment and document insights. The project helped pilot the CSA financing products and laid the foundation for standardization and wider adoption across regulated financial institutions.

The initiative enabled scaling CSA lending through evidence generation and integration into MFI systems. The project generated a consolidated knowledge base on CSA financing practices. It highlighted 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.

The International Sustainable Energy Foundation (ISEF) commissioned this project.