FROM GREEN BANKING TO GREEN MICROFINANCE SUSTAINABLE FINANCE PRACTICES OF BANKS AND MFIS IN PUNE

Green banking and green microfinance are increasingly recognized as complementary instruments for aligning financial intermediation with India’s sustainability and inclusion goals. This paper develops a conceptual pathway linking bank-level green banking practices to green microfinance, framing green microfinance as a downstream channel through which green finance reaches low-income households, micro-entrepreneurs, and rural communities. Grounded in the Sustainable Livelihoods Approach and Triple Bottom Line perspectives, the study synthesizes secondary data on green banking, green finance, and green microfinance in India, with particular reference to public and private sector banks, regional rural banks, and leading microfinance institutions (Abda, 2025; Kumar & Prakash, 2019; Gidage & Bhide, 2025; Kumar et al., 2024).

The analysis shows that robust green banking practices—across operations, policies, and employee engagement—significantly enhance environmental sustainability performance and expand the supply of green finance, with green finance mediating the relationship between bank practices and sustainability outcomes (Gidage & Bhide, 2025; Gulzar et al., 2024; Kumar et al., 2024). When these capabilities are strategically linked to microfinance channels, they support small-ticket investments in renewable energy, climate-resilient agriculture, clean cooking, and waste management that strengthen household assets, reduce vulnerability, and conserve natural capital (Abda, 2025; Devi & Uma, 2025; Ansari et al., 2025).

However, diffusion of green microfinance is constrained by high upfront costs, limited technical capacity, regulatory gaps, and challenges in measuring environmental impacts (Abda, 2025; Mohanty et al., 2025; Upadhyay & Kurmi, 2025). The paper proposes a Green Banking–Green Microfinance (GB–GMF) transmission model that highlights the role of policy incentives, public–private partnerships, and fintech in overcoming these barriers and scaling inclusive green lending. The study concludes that integrating green banking and green microfinance can accelerate progress toward India’s Sustainable Development Goals and climate commitments by building low-carbon, climate-resilient, and financially inclusive local economies.

Keywords: “Green Banking(GB)”, “Green Microfinance(GMF)”, “Sustainable Livelihood Approach (SLA)”, “Triple Bottom Line (TBL)”, “Financial Inclusion and Environmental Sustainability”.