This systematic review investigates the role of financial instruments provided by the banking sector in facilitating Small and Medium-sized Enterprises (SMEs) participation in the cleaner vehicles market. With increasing environmental concerns and legislation favoring cleaner energy sources, there is a growing trend towards the adoption of cleaner vehicles. As pivotal players in this transition, SMEs require substantial financial support to meet the capital-intensive demands of this sector, such as procuring cleaner vehicles, developing infrastructure, and promoting adoption among consumers. The review provides an in-depth examination of the key financial instruments, including credit facilities, loans, grants, and other forms of financial assistance. It delves into their role in supporting SMEs’ entry and sustenance in the cleaner vehicles market, analyzing their impact through multiple case studies. The paper uncovers the extent to which these financial instruments have affected SMEs’ ability to promote, sell, or service cleaner vehicles. Moreover, it identifies the factors influencing the success of these financial instruments, shedding light on the potential hurdles and how they might be mitigated. The implications for various stakeholders – SMEs, banking institutions, and policymakers – are also thoroughly discussed. The review underlines the necessity for more supportive policies, tailored financial products, and cooperative strategies between banks and SMEs for a successful transition towards cleaner vehicles. This comprehensive analysis yields valuable insights into how financial mechanisms can further be optimized to support SMEs, stimulate the cleaner vehicles market, and ultimately contribute to environmental sustainability. It points to critical areas for future research, notably in the direction of understanding the unique needs of different types of SMEs, assessing the long-term impact of these financial instruments, and exploring innovative financing models. The findings from this review have significant implications for shaping financial policies and strategies in the banking sector, informing governmental support mechanisms, and guiding SMEs in leveraging financial instruments effectively. As such, it contributes to the ongoing discourse on fostering sustainable practices in the automotive sector and supports the global transition to a green economy.