Eco-microcredit as a catalyst for rural sustainability

Rural households continue to face persistent challenges related to income instability, limited access to finance, and increasing exposure to environmental risks. Phenomena such as climate change, soil degradation, and natural resource scarcity further exacerbate rural vulnerability, particularly in agriculture-dependent communities. While conventional microcredit has been widely promoted as a poverty alleviation instrument, its ability to support environmentally sustainable livelihoods remains mixed (Phan et al., 2019; Shahidullah & Haque, 2014). In response to these constraints, the concept of eco-microcredit has emerged as an innovative financing approach that integrates microfinance with environmental sustainability objectives. Eco-microcredit prioritises financing for environmentally responsible activities such as sustainable agriculture, conservation technologies, and renewable energy investments (Lal & Israel, 2006; Liu, 2024). As argued by Mohamed Isa et al. (2025), eco-microcredit represents a strategic shift from purely income-focused lending towards sustainability-oriented rural finance. Accordingly, this paper aims to distil and discuss the concept of eco-microcredit as a standalone construct, focusing on its definition, theoretical grounding, and contribution to rural sustainability.