The AltFi Lending Summit.
The biggest help to green lending? Incentivisation.
Three experts joined us at the AltFi Lending Summit to weigh in on whether ‘green lending’ could be the solution that moves the world to a net zero economy.

Billions of pounds of investment are needed over the coming decades if the world is going to transition to a net zero economy.
Often, ‘green lending’ is put forth as the solution for this funding gap.
At the AltFi Lending Summit, we asked the experts to weigh in and share their thoughts.
Funding Options CEO Simon Cureton,Tandem Bank CEO Susie Aliker and Oxbury Bank co-founder and chief customer and regulatory officer Tim Coates joined us to discuss their thoughts on whether green lending is the solution, and what more needs to be done to make it so.
“I think one of the most encouraging things is that interest has been very good,” Cureton said.
“So on average, around 20 per cent of our demand is from businesses that self-identify as either being green themselves or having a green need or a need for green finance.”
In the asset finance product class, roughly around the same proportion of businesses want to finance an asset that has lower carbon emissions, he explained, which is what brings companies to Funding Options.
The lending marketplace launched its green finance marketplace just over a year ago, and while it is positive that a lot of businesses are looking for the “competitive choice”, Cureton said, this is where the challenge lies.
“Whilst the demand has been strong, and very encouraging, we are still faced with quite limited supply on the lender side,” Cureton said.
“But it's all about how you incentivise not just the SMEs themselves to reduce their carbon emissions, but how do you incentivise the lenders to bring products to the market that can actually satisfy that demand?”
For Oxbury, the UK’s only specialist agricultural bank, the need for incentivisation is also key.
“It's important for us to be incentivising our current and prospective customer base,” Coates said.
“And this is where fintech I think is really involved, because clearly that is about quality information, data transmission between customer and lender, which enables us to derisk what's going on. Better information means lower risk.”
For Oxbury at the moment, it also means a path for the bank that sees it set to break even by the end of the year, with an optimistic outlook for full profitability next year.
At Tandem, Aliker, who is set to shortly hand over the reins of the bank to Alex Mollart, has played a key role in pushing the company into the green lending space.
She noted the struggles for consumers in the current climate, particularly stressing that while the energy price hikes can make some of the ‘greener’ options more compelling, and an easier sell now, it is still a real challenge.
“I think we obviously have to accept the current situation. It is very, very difficult out there,” Aliker said.
“The payback of green lending can now be more compelling, but costs are significant.
“This is not cheap, for individuals to make that transition, and so I do think we need to look at incentives, information and education to help to encourage it.”
On a positive note, Funding Options CEO Simon Cureton said that while the cost-of-living crisis obviously affects SMEs as well, over the last few years of instability in the broader economic climate, demand has stayed “very strong”.
In fact, over the last few years, it has even increased.
“The resilience of businesses and business owners is an incredible thing,” Cureton said.
“And I have no doubt actually that the demand will be at least sustained.”
The question will be, he said, how do you incentivise all six million SMEs, which account for a significant portion of all carbon emissions?
While there will be some sectors that naturally look towards finding a solution, how do you make sure that choice is extended to all of them?
Cureton’s answer?
“I think there needs to be a lot more done by the various public bodies, government, etc. to really support this,” he said.
“We've seen a lot of the stick, and not a lot of the carrot. And I think you absolutely need to have a balance between the two.”