Impact of Green financing, FinTech, and financial inclusion on energy efficiency

Abstract

In modern times, enhancing energy efficiency is one of the core agenda items for the economies to progress the world. United Nations general assembly has recommended increasing energy efficiency by considering the SDG-7 guidelines. In the contemporary period, E7 economies are deficient in producing the financial resources to ensure the availability of funds for the acquisition of energy efficiency. COVID-19 crises, lack of resilience in economies, devastating fiscal burdens, and tight monetary conditions of E7 economies are the major barriers. To resolve such issues, some innovative financing techniques, such as green financing, financial inclusion, and FinTech, were suggested to investigate. However, this research tested the empirical role of financial inclusion, green financing, and FinTech on the energy efficiency of E7 economies. Study findings have shown a significant role of such financing techniques on energy efficiency. Comparatively, green financing is found most fitting and highly supportive financing tool for energy efficiency among the three. The differences in attributes, financing mechanism, funds flow system, transection systems, and variation in support by the financial institution are the main reasons that lessen the role of financial inclusion and FinTech for energy efficiency. However, theorists must revisit the transaction system of FinTech and financial inclusion parameters like green bonds for energy efficiency attainment. Policymakers are suggested to develop viable and energy system-friendly policies to grant green finance to the energy systems of E7 economies, as conveniently as possible.

Keywords: E7 economies; Energy efficiency; FinTech; Financial inclusion; Green finance.