DETERMINANT OF GREEN FINANCING ADOPTION BY SMALL AND MEDIUM SIZED ENTERPRISES IN MANUFACTURING SECTOR AT NAIROBI CITY COUNTY, KENYA

GREEN FINANCING ADOPTION BY SMES

Abstract

The general objective of this study was to determine the factors influencing the uptake of green financing by small and medium-sized enterprises in Nairobi, Kenya. It was guided by the following specific objective: to assess the effect of technology on the uptake of green financing by SMEs in Nairobi, particularly those in the Manufacturing sector. The theories used in this study were, the Positive signaling theory of sustainable finance, and the Priority theory of sustainable finance. The study utilized descriptive research design and the population was the management of registered small and medium-sized enterprises in Nairobi, Kenya. The target population for the study was the 134 small and medium-sized enterprises in Nairobi, Kenya. Census of all the SMEs was done. Questionnaires included questions on background and constraints to adoption of green financing which were used as the main tool to collect primary data. Data collected was then analyzed using SPSS through inferential statistics i.e., regression analysis, hypothesis testing, and confidence intervals where measurements drawn from the samples were used to make generalizations about the larger population of SMEs. Tables and graphs were used to present data and further interpret the results. The regression analysis showed that technology had a positive and significant beta coefficient meaning that use of better technologies by SMEs could lead to improved uptake of green financing.  Based, on these findings, this study concludes that use of better technologies by SMEs could lead to improved uptake of green financing. Based on these findings, this study recommends that the management of SMEs come up with policy of auditing their financial statement s as to increased their chances of accessing green financing from banks. Lastly, this study recommends that management sponsor most of their employee to attend green financing trainings and seminars so as to create more awareness of the available green financing projects for the SMEs.