Should an MSME choose a green loan or a sustainability-linked loan?
Choose a green loan when the money is for a specific project such as solar, efficient motors or a cleaner boiler. Choose a sustainability-linked loan when you want general funding tied to company-wide targets like emissions intensity. Many MSMEs start with a green loan.
Green loan
- Money used only for named green projects.
- Reporting on how the money was spent and the impact.
- Easier to start with one clear project.
Sustainability-linked loan
- Money for general purposes.
- Interest linked to KPIs such as emissions per tonne.
- Needs a baseline, yearly reporting and usually external verification.
What decides it
If you do not yet track emissions monthly, a sustainability-linked loan is hard to run. A green loan for one project builds the records you would need later.
What Senseible does here
Senseible turns invoices and bills into dated, fingerprinted emission records, the evidence a lender usually asks to see first.
Sources: Loan Market Association, Green Loan and Sustainability-Linked Loan Principles, Reserve Bank of India
Last reviewed 2026-10-22.