Research on World Agricultural Economy

Determinants of Green Finance and SMEs Performance: An Empirical Study in the Vietnamese Agricultural Sector

Hien Thanh Hoang

Business Department, FPT University, Da Nang campus, Da Nang 12014, Vietnam

Thuy Trang Pham

Business Department, FPT University, Da Nang campus, Da Nang 12014, Vietnam

Ngoc Hung Tran

Business and Management Research Group, School of Finance and Accounting, Industrial University of Ho Chi Minh City, Ho Chi Minh City 76107, Vietnam

DOI: https://doi.org/10.36956/rwae.v6i3.2031

Received: 6 May 2025 | Revised: 26 May 2025 | Accepted: 4 June 2025 | Published Online: 24 July 2025

---

Abstract

This study investigates how financial institutions, regulatory frameworks, and enterprise-level initiatives can collectively expand access to green finance for small and medium-sized enterprises (SMEs) in Vietnam’s agricultural sector. For financial institutions, three critical points emerge: (1) the development of tailored financial products that address collateral constraints, (2) the strategic adoption of digital finance solutions, and (3) active engagement in capacity-building partnerships with SMEs. Using SmartPLS software and a sample of 245 respondents, the findings show that addressing traditional collateral requirements through innovative financial instruments, such as cash-flow-based lending or guarantees, can significantly enhance SME access to capital for sustainable investments. Integrating digital finance tools, including mobile banking and online loan platforms, enables financial institutions to reduce transaction costs and extend their outreach to underserved rural areas. These innovations are vital in agriculture, where many SMEs lack fixed assets but demonstrate strong operational potential. Complementing the role of financial institutions, supportive regulatory frameworks—including targeted subsidies, green credit lines, and transparent eligibility guidelines—reinforce confidence in green lending. Moreover, SME-level factors such as environmental awareness and managerial capacity are pivotal in ensuring that green finance translates into real-world sustainability outcomes, improving operational efficiency and long-term competitiveness. By aligning financial offerings with sustainability goals, institutions manage risk more effectively and contribute to Vietnam’s national green growth and climate resilience agenda. This study highlights the transformative potential of green finance in achieving dual objectives: environmental sustainability and economic resilience. Future research should explore emerging digital finance models and collaborative financial mechanisms to empower SMES further and strengthen the green finance ecosystem.

Keywords: Green Finance; Performance; Financial Institutions; Collateral; Regulatory Framework; Environmental Awareness; SMEs; Agricultural Sector

---

References

[1] Nguyen, A.H., Do, M.H.T., Hoang, T.G., et al., 2023. Green financing for sustainable development: Insights from multiple cases of Vietnamese commercial banks. Business Strategy and the Environment. 32(1), 321–335. DOI: https://doi.org/10.1002/bse.3132

[2] Ferretti, T., 2023. Impact investing and sustainable global value chains: Enabling small and medium enterprises sustainability strategies. AIB Insights. 23(8). DOI: https://doi.org/10.46697/001c.88529

[3] Wang, X., Elahi, E., Khalid, Z., 2022. Do green finance policies foster environmental, social, and governance performance of corporate? International journal of environmental research and public health. 19(22), 14920. DOI: https://doi.org/10.3390/ijerph192214920

[4] Ma, Z., Liu, Z., Zhang, P., et al., 2024. Analysis of the Impact of Digital Inclusive Finance on the Development of Green Agriculture. Agronomy. 14(12), 2777. DOI: https://doi.org/10.3390/agronomy14122777

[5] Ribeiro, N., Duarte, A.P., Filipe, R., et al., 2022. Does authentic leadership stimulate organizational citizenship behaviors? The importance of affective commitment as a mediator. Sustainability Accounting, Management and Policy Journal. 13(2), 320–340. DOI: https://doi.org/10.1108/SAMPJ-11-2019-0423

[6] Liu, L., Tobias, G.R., 2023. Application of Green Finance in Promoting Low-carbon Transformation of Enterprises. Advance in Sustainability. 3(1), 1–6. DOI: http://dx.doi.org/10.26855/as.2023.06.001

[7] Wang, Y., Liu, H., Zhou, J., et al., 2023. The Impact of Green Finance on China’s Agricultural Trade. Sustainability. 15(9), 7688. DOI: https://doi.org/10.3390/su15097688

[8] Huang, Q., Chen, X., Zhou, M., et al., 2019. How Does CEO's Environmental Awareness Affect Technological Innovation? International Journal of Environmental Research and Public Health. 16(2), 261. DOI: https://doi.org/10.3390/ijerph16020261

[9] Karaeva, A., Tolkou, A., Cioca, L.-I., et al., 2023. Family ISO 14000 standards as a tool of achieving environmental sustainability of enterprises. IOP Conference Series: Earth and Environmental Science. 1126(1), 012036. DOI: https://doi.org/10.1088/1755-1315/1126/1/012036

[10] Tingbani, I., Salia, S., Hussain, J.G., et al., 2021. Environmental tax, SME financing constraint, and innovation: evidence from OECD countries. IEEE Transactions on Engineering Management. 70(3), 1006–1025. DOI: https://doi.org/10.1109/TEM.2021.3110812

[11] Hong, J., Zheng, R., Deng, H., et al., 2019. Green supply chain collaborative innovation, absorptive capacity and innovation performance: Evidence from China. Journal of Cleaner Production. 241, 118377. DOI: https://doi.org/10.1016/j.jclepro.2019.118377

[12] Ye, T., Xiang, X., Ge, X., et al., 2022. Research on green finance and green development based eco-efficiency and spatial econometric analysis. Sustainability. 14(5), 2825. DOI: https://doi.org/10.3390/su14052825

[13] Xue, L., Dong, J., Zha, Y., 2023. How does digital finance affect firm environmental, social and governance (ESG) performance? — Evidence from Chinese listed firms. Heliyon. 9(10), e20800. DOI: https://doi.org/10.1016/j.heliyon.2023.e20800

[14] Irfan, M., Razzaq, A., Sharif, A., et al., 2022. Influence mechanism between green finance and green innovation: Exploring regional policy intervention effects in China. Technological Forecasting and Social Change. 182, 121882. DOI: https://doi.org/10.1016/j.techfore.2022.121882

[15] Sun, G., Feng, Q., Wu, S., et al., 2025. The impact of China’s green credit policy on the innovation of manufacturing enterprises. Journal of Innovation & Knowledge. 10(3), 100714. DOI: https://doi.org/10.1016/j.jik.2025.100714

[16] Siregar, A.A., Afiff, A.Z., Halim, R.E., 2023. Linking agile leadership and business sustainability through the mediation of political and social capabilities. Journal of Open Innovation: Technology, Market, and Complexity. 9(4), 100153. DOI: https://doi.org/10.1016/j.joitmc.2023.100153

[17] Elidjen, Hidayat, D., Abdurachman, E., 2022. The roles of gamification, knowledge creation, and entrepreneurial orientation towards firm performance. International Journal of Innovation Studies. 6(4), 229–237. DOI: https://doi.org/10.1016/j.ijis.2022.07.002

[18] Darvishmotevali, M., Altinay, L., 2022. Green HRM, environmental awareness and green behaviors: The moderating role of servant leadership. Tourism Management. 88, 104401. DOI: https://doi.org/10.1016/j.tourman.2021.104401

[19] Farrukh, M., Rafiq, M., Raza, A., et al., 2024. Beyond the surface: understanding the mechanism between green HR practices and employees’ green creative behavior through mixed-methods exploration. Journal of Hospitality and Tourism Insights. 7(5), 3055–3072. DOI: https://doi.org/10.1108/JHTI-05-2023-0357

[20] Nivedha, E., Prabadevi, M., 2023. Green entrepreneurial leadership style. Available from: https://www.atlantis-press.com/proceedings/icetbm-23/125986531. (cited 15 April 2025).

[21] Song, M., Tao, W., Shen, Z., 2022. Improving high-quality development with environmental regulation and industrial structure in China. Journal of Cleaner Production. 366, 132997. DOI: https://doi.org/10.1016/j.jclepro.2022.132997

[22] Wang, H., Zhang, R., 2022. Effects of environmental regulation on CO2 emissions: An empirical analysis of 282 cities in China. Sustainable Production and Consumption. 29, 259–272. DOI: https://doi.org/10.1016/j.spc.2021.10.016

[23] Gan, Q., Yang, L., Liu, J., et al., 2021. The Level of Regional Economic Development, Green Image, and Enterprise Environmental Protection Investment: Empirical Evidence from China. Mathematical Problems in Engineering. 2021(1), 5522351. DOI: https://doi.org/10.1155/2021/5522351

[24] Zeng, Y., Wang, F., Wu, J., 2022. The impact of green finance on urban haze pollution in China: a technological innovation perspective. Energies. 15(3), 801. DOI: https://doi.org/10.3390/en15030801

[25] Kashav, S., Cerchione, R., Centobelli, P., et al., 2018. Sustainability Orientation, Supply Chain Integration, and SMEs Performance: A Causal Analysis. Benchmarking An International Journal. 26(4). DOI: https://doi.org/10.1108/BIJ-08-2017-0236

[26] Taghizadeh-Hesary, F., Yoshino, N., 2020. Sustainable solutions for green financing and investment in renewable energy projects. Energies. 13(4), 788. DOI: https://doi.org/10.3390/en13040788

[27] Qin, C., Hong, Y.-T., 2023. Quadripartite Evolutionary Game of Sustainable Development of Supply Chain Finance with Government Participation. Sustainability. 15(4), 3788. DOI: https://doi.org/10.3390/su15043788

[28] Ozili, P.K., 2022. Green finance research around the world: a review of literature. International Journal of Green Economics. 16(1), 56–75. DOI: https://doi.org/10.1504/IJGE.2022.10048432

[29] Tran, Q.H., 2022. The impact of green finance, economic growth and energy usage on CO2 emission in Vietnam–a multivariate time series analysis. China Finance Review International. 12(2), 280–296. DOI: https://doi.org/10.1108/CFRI-03-2021-0049

[30] Cecere, G., Corrocher, N., Mancusi, M.L., 2020. Financial constraints and public funding of eco-innovation: empirical evidence from European SMEs. Small Business Economics. 54(1), 285–302. DOI: https://doi.org/10.1007/s11187-018-0090-9

[31] Gaglio, C., Kraemer-Mbula, E., Lorenz, E., 2022. The effects of digital transformation on innovation and productivity: Firm-level evidence of South African manufacturing micro and small enterprises. Technological Forecasting and Social Change. 182, 121785. DOi: https://doi.org/10.1016/j.techfore.2022.121785

[32] Calabrese, R., Girardone, C., Sclip, A., 2021. Financial fragmentation and SMEs’ access to finance. Small Business Economics. 57(4), 2041–2065. DOI: https://doi.org/10.1007/s11187-020-00393-1

[33] Rahman, A., Jaroslav, B., Tomas, K., et al., 2017. Collateral requirements for SME loans: empirical evidence from the Visegrad countries. Journal of Business Economics and Management. 18(4), 650–675. DOI: https://doi.org/10.3846/16111699.2017.1357050

[34] Naili, M., Lahrichi, Y., 2022. The determinants of banks' credit risk: Review of the literature and future research agenda. International Journal of Finance & Economics. 27(1), 334–360. DOI: https://doi.org/10.1002/ijfe.2156

[35] Du, Y., Wang, Q., Zhou, J., 2023. How does digital inclusive finance affect economic resilience: Evidence from 285 cities in China. International Review of Financial Analysis. 88, 102709. DOI: https://doi.org/10.1016/j.irfa.2023.102709

[36] Zhang, W., Yan, S., Li, J., et al., 2022. Credit risk prediction of SMEs in supply chain finance by fusing demographic and behavioral data. Transportation Research Part E: Logistics and Transportation Review. 158, 102611. DOI: https://doi.org/10.1016/j.tre.2022.102611

[37] Cohen, J., 1992. Statistical power analysis. Current directions in psychological science. 1(3), 98–101. DOI: https://doi.org/10.1111/1467-8721.ep10768783

[38] Hair, J.F., Risher, J.J., Sarstedt, M., et al., 2019. When to use and how to report the results of PLS-SEM. European business review. 31(1), 2–24. DOI: https://doi.org/10.1108/EBR-11-2018-0203