Barriers to Green Financing for Micro, Small, and Medium Enterprises: Perspectives of Bank Lending Officers in the Philippines
DOI:
https://doi.org/10.65339/ijsis.V1.I3.227Keywords:
Bank Lending Officers, Credit Accessibility, Green Financing, Information Asymmetry;, Institutional Capacity, Micro, Small, and Medium Enterprises, Philippines, Sustainable FinanceAbstract
This study examined the barriers to green financing for micro, small, and medium enterprises (MSMEs) in the Philippines from the perspective of bank lending officers, focusing on financial constraints, information asymmetry, regulatory compliance, institutional capacity, financing-product availability, and perceived opportunities. Although MSMEs represent 99.63% of Philippine business establishments, their loans accounted for only 3.9% of total bank lending in 2024, even as 90.3% of banks responding to a national banking survey planned to finance sustainable projects. Anchored in information asymmetry, institutional and regulatory perspectives, and organizational lending capacity, the research adopted an exploratory–descriptive, cross-sectional survey of 15 purposively selected personnel from Philippine banking and financial institutions. Questionnaire responses were analyzed descriptively using frequencies, percentages, and Wilson 95% confidence intervals. Informational barriers were among the most frequently endorsed: 13 respondents (86.7%) cited the lack of reliable sustainability documentation among MSMEs and 12 (80.0%) cited difficulties verifying environmental benefits, alongside conventional concerns about repayment capacity (80.0%) and collateral (73.3%). Regulatory uncertainty (66.7%) and insufficient personnel training (60.0%) were also widely reported, although only five respondents (33.3%) had evaluated or processed a green financing application. Despite these constraints, 14 respondents (93.3%) regarded green financing as an opportunity for MSME development, and most supported simplified sustainability documentation, specialized personnel training, tailored financing products, digital assessment systems, and stronger government–financial institution collaboration. The findings are consistent with the view that green eligibility adds a second verification task to conventional credit appraisal, one that respondents perceived MSMEs and lending staff as not yet fully equipped to complete. Because the sample was small and nonprobabilistic, the results are exploratory rather than generalizable. The study contributes officer-level evidence from an emerging Association of Southeast Asian Nations (ASEAN) economy and is relevant to Sustainable Development Goals 7, 8, 9, 12, 13, and 17 because it identifies practical routes to more inclusive and responsible green credit.
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