FINANCING THE TRANSITION: A SYSTEMATIC REVIEW OF BANKING STRATEGIES SUPPORTING SMES IN ADVANCING CLEANER VEHICLE ADOPTION

Abstract

This paper systematically reviews banking strategies that support Small and Medium-sized Enterprises (SMEs) in advancing cleaner vehicle adoption. While cleaner vehicles are acknowledged as key in addressing environmental concerns, their uptake among SMEs is often hindered by financial barriers. This study examines how the banking sector helps to bridge this gap through various financial products, services, and incentives. The study analyses multiple strategies including low-interest loans, green bonds, and carbon credits, assessing their effectiveness in fostering SME-driven cleaner vehicle initiatives. Findings highlight the significant role of banks in accelerating cleaner vehicle adoption among SMEs and underscore the need for the continued evolution of these strategies to cater to SMEs’ unique needs and constraints. Policymakers are also found to play a crucial role in shaping an enabling environment for these banking strategies to thrive. The study concludes with implications of these findings for SMEs, banks, and policymakers, and offers recommendations for future banking strategies, policies, and research directions in cleaner vehicle financing. By providing a comprehensive view of the financial dimensions of cleaner vehicle adoption among SMEs, this research contributes to our understanding of sustainable transition processes in the business sector and the critical role of financial institutions therein.