Leveraging Green Finance to Improve SME Sustainability in Nigeria

In recent years, SMEs in African nations, particularly Nigeria, have faced significant challenges related to green financing, sustainability, and environmental compliance. This research examines the influence of various green finance dimensions on the environmental performance of SMEs, focusing on selected manufacturing SMEs in Lagos, Nigeria. A total of 250 surveys were distributed to participants, with 235 completed questionnaires successfully collected. Data analysis was conducted using Pearson Product Moment Correlation Coefficient (PPMCC) and Path Analysis-Structural Equation Modeling (PA-SEM). The results reveal a positive, though not statistically significant, relationship between green investment and green training with SMEs' environmental performance. This suggests that while green investment and training have potential as tools for improving SMEs' environmental outcomes, further research is necessary to confirm their effectiveness. However, the study finds a significant positive relationship between green loans, green technology, and environmental performance, highlighting the effectiveness of these measures in fostering environmental responsibility among SMEs. Based on these findings, the study recommends that government bodies, financial institutions, and other stakeholders provide financial incentives and support to encourage SMEs to adopt green technology and utilize green loans. Additionally, collaborative efforts to promote green training programs for SME employees are encouraged. This unified approach aims to foster a sustainable, environmentally conscious business environment, contributing to broader goals of environmental sustainability.