Green Finance as a Tool for Tribal Economic Empowerment: An Assessment of the Role of the Banking Sector in India

Abstract

Scheduled Tribes make up 8.6 per cent of India's population (Census 2011) and remain one of the most financially excluded groups in the country. Their livelihoods depend heavily on forest resources, subsistence farming and other activities tied to the natural resource base. Meanwhile, regulators and multilateral agencies have promoted green finance, including green loans, renewable energy financing, priority sector lending and sustainability-linked credit, to align economic development with environmental goals. This paper asks how far the Indian banking sector has turned these mechanisms into something that supports tribal economic empowerment. The study relies wholly on secondary sources: Reserve Bank of India and NABARD publications, government scheme documents, and peer-reviewed work on green banking and tribal financial inclusion. No primary data were collected. Using the Sustainable Livelihoods Framework and the financial inclusion literature as lenses, the analysis identifies the barriers that hold back green credit for tribal populations: thin banking infrastructure, documentation and collateral requirements that clash with informal land tenure, and weak convergence between tribal welfare policy and green finance policy. Green finance holds real promise where livelihood activities already match tribal economic practice, as with non-timber forest produce and solar irrigation, but that promise is only partly realized, largely because of design mismatches and not because policy intent is missing. The paper closes with policy directions for more context-sensitive green banking design and notes that primary research with tribal beneficiaries is needed to test its arguments.