Green Finance Mechanisms and their Impact on Sustainable SME Development

Abstract

The objective of this research is to assess the impact green finance tools have on the sustainable
development of small and medium-sized enterprises (SMEs). Through a mixed methods approach, the study analyzes
the impact of green bonds, sustainability-linked loans, and climate risk insurance on the growth, environmental
performance, and resilience of SMEs. Results prove that the availability of green finance impacts the degree of
sustainability and business continuity in SMEs positively. The research highlights the gap in policy frameworks and
comprehensive financial systems that enable the integration of green financing into building sustainable ecosystems
around SMEs.