THE SYSTEMATIC LITERATURE REVIEW OF THE IMPACT OF FINTECH IN ENCOURAGING GREEN INNOVATION IN MSMEs
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Royanti Sinaga(1*)
Department of Digital Business, Faculty of Economics and Business, University of Satya Terra Bhinneka
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Fayeno Yunanda(2)
Department of Digital Business, Faculty of Economics and Business, University of Satya Terra Bhinneka
(*) Corresponding Author
Keywords:
Fintech, Green Innovation, MSMEs
Abstract
This study investigates the role of fintech in promoting green innovation among Small and Medium Enterprises (SMEs) worldwide. This paper analyses various research studies and highlights key aspects of fintech’s contributing to sustainable business practices. Firstly, fintech supports access to finance through digital platforms and innovative financing models such as peer-to-peer lending (P2P), enabling SMEs to invest in environmentally friendly technologies. Secondly, green financing mechanisms such as crowdfunding and blockchain technology facilitate transparent and accountable investments in sustainable projects. Thirdly, fintech promotes the digitalization of business operation processes, increasing efficiency and reducing carbon footprints. Furthermore, fintech contributes to developing financial literacy, empowering SMEs to make better decisions about sustainable investments. The study also explores how fintech incentives, such as rewards for eco-friendly purchases, could drive consumer demand for sustainable products. To sum up, fintech plays a vital role in fostering green innovation among SMEs by providing better access to finance, promoting transparency, introducing eco-friendly technologies, and expanding market access.
Keywords: Fintech; Green Innovation; MSMEs
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References
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Rao, S., Pan, Y., He, J., & Shangguan, X. (2022). Digital finance and corporate green innovation: quantity or quality? Environmental Science and Pollution Research, 29(37), 56772-56791.
Sanga, B., & Aziakpono, M. (2023). FinTech and SMEs financing: A systematic literature review and bibliometric analysis. Digital Business, 1-12.
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Saputra, R. M., & Darmawan, H. (2023). Effects of Urbanization and the Growth of Micro, Small, and Medium Enterprises (Msmes) As Supports for the Economy of Indonesia in an Urban Context. Journal of Social Political Sciences, 4(2), 201–214.
Shao, L., & Chen, J. (2023). Digital finance and regional green innovation: the perspective of environmental regulation. Environmental Scienceand Pollution Research, 30(36), 85592-85610.
Suparji. (2021). Investment climate for MSMEs towards a green economy. International Journal Of Research In Business And Social Science , 153-158.
Tian, H., Siddik, A. B., Raja, T. P., & Rahman, M. N. (2023). Does fintech innovation and green transformational leadership improve green innovation and corporate environmental performance? A hybrid SEM−ANN approach. Journal of Innovation & Knowledge, 1-14.
Ullah, R., Ahmad, H., Rehman, F.U. and Fawad, A. (2023), "Green innovation and Sustainable Development Goals in SMEs: the moderating role of government incentives", Journal of Economic and Administrative Sciences, Vol. 39 No. 4, pp. 830-846.
Wang, C., Wang, L., Zhao, S., Yang, C., & Albitar, K. (2023). The impact of Fintech on corporate carbon emissions: Towards green and sustainable development. Business Strategy and the Environment, 5776-5796.
Zheng, G.-W., Siddik, A. B., Masukujjaman, M., & Fatema, N. (2021). Factors affecting the sustainability performance of financial institutions in Bangladesh: the role of green finance. Sustainability, 13(18), 10165.
Zhou, X., & Chen, S. (2021). FinTech innovation regulation based on reputation theory with the participation of new media. Pacific-Basin Finance Journal, 67, 101565.
Zulkarnaen, W., Fitriani,I., & Yuningsih,N. (2020). Development of Supply Chain Management in the Management of Election Logistics Distribution that is More Appropriate in Type, Quantity and Timely Based on Human Resources Competency Development at KPU West Java. MEA Scientific Journal (Management, Economics, & Accounting), 4(2), 222-243.
Addy, W. A., Ofodile, O. C., Adeoye, O. B., Oyewole, A. T., Okoye, C. C., Odeyemi, O., & Ololade, Y. J. (2024). Data-Driven Sustainability: How Fintech Innovations Are Supporting Green Finance. Engineering Science & Technology Journal, 760 - 773.
Agrawal, R., Surendra Yadav, V., Majumdar, A., Kumar, A., Luthra, S., Arturo GarzaReyes, J., 2023. Opportunities for disruptive digital technologies to ensure circularity in supply Chain: A critical review of drivers, barriers and challenges. Comput. Ind. Eng. 178, 109140.
Ali, E. B., Anufriev, V. P., & Amfo, B. (2021). Green economy implementation in Ghana as a road map for a sustainable development drive: A review. Scientific African, 12, e00756. https://doi.org/10.1016/j.sciaf.2021.e00756.
Allahham, M., Sharabati, A. A., Almazaydeh, L., Shalatony, Q. M., Frangieh, R. H., & Al-Anati, G. M. (2023). The impact of fintech-based eco-friendly incentives in improving sustainable environmental performance: A mediating-moderating model. International Journal of Data and Network Science, 415-430.
Bayram, O., Talay, I., & Feridun, M. (2022). Can Fintech Promote Sustainable Finance? Policy Lessons from the Case of Turkey. Sustainability, 1-25.
Bhat, M.A., Khan, S.T., Alkhwaldi, A.F. and Abdulmuhsin, A.A. (2024), "Investigating the critical drivers of Fintech adoption to promote business sustainability of SMEs", Global Knowledge, Memory and Communication, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/GKMC-02-2024-0096.
Doghan, M. A., & Chong, K. W. (2023). Fintech Adoption and Environmental Sustainability: Mediating Role of Green Finance, Investment and Innovation. International Journal of Operations and Quantitative Management, 296-315.
Frost, J. (2020). The economic forces driving fintech adoption across countries (No. 838,. Bank for International Settlements.
Guo, J., Jia, F., Yan, F., & Chen, L. (2024). International Journal Of Logistics: Research And Applications. E-commerce supply chain finance for SMEs: the role of green innovation, 27, 9, 1596-1615.
Hariram, N. P., Mekha, K. B., Suganthan, V., & Sudhakar, K. (2023). Sustainalism: An Integrated Socio-Economic-Environmental Model to Address Sustainable Development and Sustainability. Sustainability (Switzerland), 15(13). https://doi.org/10.3390/su151310682.
Huang, S. (2022). Does FinTech improve the investment efficiency of enterprises? Evidence from China's small and medium-sized enterprises. Economic Analysis and Policy, 74, 571–586.
Mai, T. N. (2023). Renewable Energy, GDP (Gross Domestic Product), FDI (Foreign Direct Investment) and CO2 Emissions in Southeast Asia Countries. International Journal of Energy Economics and Policy, 13(2), 284–289. https://doi.org/10.32479/ijeep.14022.
Muhammad, H., Fitriani, L., Chalong, T., & Prattana, S. (2025). Government Support, Business Environment, and Entrepreneurial Intent: A Cross-National Study of MSMEs in Indonesia and Thailand.
Nguyen, M. H & Pham, A. N & Nguyen, V. L & Nguyen, M. T, 2024. "Impact of green innovation on environmental performance and financial performance," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Spinger, 26(7), 17083-17104
Khan, I. H., & Urooj, S. F. (2023). The Nexus of Green Fintech and Corporate Financial Performance: A Catalyst for Sustainable Corporate Growth and Financial Success. Journal of Business and Management Research, 2(2), 1-3.
Kubi, E. A., Koranteng, F. O., Dura, C. C., Mihail, A. A., Drig, I., & Preda, A. (2024). Green financing and sustainability reporting among SMEs: The role of pro-environmental behavior and digitization. Journal of Cleaner Production, 1-11.
Lee, C. C., Li, X., Yu, C. H., & Zhao, J. (2021). Does fintech innovation improve bank efficiency? Evidence from China's banking industry. International Review of Economics and Finance, 74, 468–483.
Li, H., Lu, Z., & Yin, Q. (2023). The Development of Fintech and SME Innovation: Empirical Evidence from China. Sustainability, 1-14.
Li, B., Du, J., Yao, T., & Wang, Q. (2023). FinTech and corporate green innovation: An external attention perspective. Finance Research Letters, 58, 104661.
Parums, D. V. (2021). Review articles, systematic reviews, meta-analysis, and the updated preferred reporting items for systematic reviews and meta-analyses (PRISMA) 2020 guidelines. Medical science monitor: international medical journal of experimental and clinical research, 27, e934475-1.
Pizzi, S., Corbo, L., & Caputo, A. (2020). Fintech and SMEs sustainable business models: reflections and considerations for a circular economy. Journal of Cleaner Production, 1-30.
Qin, L., Aziz, G., Hussan, M. W., Qadeer, A., & Sarwar, S.(2024). Empirical evidence of fintech and green environment: Using the green finance as a mediating variable. International Review of Economics & Finance, 89, 33-49.
Rao, S., Pan, Y., He, J., & Shangguan, X. (2022). Digital finance and corporate green innovation: quantity or quality? Environmental Science and Pollution Research, 29(37), 56772-56791.
Sanga, B., & Aziakpono, M. (2023). FinTech and SMEs financing: A systematic literature review and bibliometric analysis. Digital Business, 1-12.
Santos, D. M., Oliveira, M. A., & Moreira, A. P. (2022). Fintech Services and the Drivers of Their Implementation in Small and Medium Enterprises. MDPI, 1-25.
Saputra, R. M., & Darmawan, H. (2023). Effects of Urbanization and the Growth of Micro, Small, and Medium Enterprises (Msmes) As Supports for the Economy of Indonesia in an Urban Context. Journal of Social Political Sciences, 4(2), 201–214.
Shao, L., & Chen, J. (2023). Digital finance and regional green innovation: the perspective of environmental regulation. Environmental Scienceand Pollution Research, 30(36), 85592-85610.
Suparji. (2021). Investment climate for MSMEs towards a green economy. International Journal Of Research In Business And Social Science , 153-158.
Tian, H., Siddik, A. B., Raja, T. P., & Rahman, M. N. (2023). Does fintech innovation and green transformational leadership improve green innovation and corporate environmental performance? A hybrid SEM−ANN approach. Journal of Innovation & Knowledge, 1-14.
Ullah, R., Ahmad, H., Rehman, F.U. and Fawad, A. (2023), "Green innovation and Sustainable Development Goals in SMEs: the moderating role of government incentives", Journal of Economic and Administrative Sciences, Vol. 39 No. 4, pp. 830-846.
Wang, C., Wang, L., Zhao, S., Yang, C., & Albitar, K. (2023). The impact of Fintech on corporate carbon emissions: Towards green and sustainable development. Business Strategy and the Environment, 5776-5796.
Zheng, G.-W., Siddik, A. B., Masukujjaman, M., & Fatema, N. (2021). Factors affecting the sustainability performance of financial institutions in Bangladesh: the role of green finance. Sustainability, 13(18), 10165.
Zhou, X., & Chen, S. (2021). FinTech innovation regulation based on reputation theory with the participation of new media. Pacific-Basin Finance Journal, 67, 101565.
Zulkarnaen, W., Fitriani,I., & Yuningsih,N. (2020). Development of Supply Chain Management in the Management of Election Logistics Distribution that is More Appropriate in Type, Quantity and Timely Based on Human Resources Competency Development at KPU West Java. MEA Scientific Journal (Management, Economics, & Accounting), 4(2), 222-243.
Published
2025-07-03
How to Cite
Sinaga, R., & Yunanda, F. (2025). THE SYSTEMATIC LITERATURE REVIEW OF THE IMPACT OF FINTECH IN ENCOURAGING GREEN INNOVATION IN MSMEs. Journal of Management : Small and Medium Enterprises (SMEs), 18(2), 1053-1063. https://doi.org/10.35508/jom.v18i2.20274
Section
Articles
