Digitalisation and sustainable finance in SMEs: unpacking the causal mechanisms through a systematic review and integrative framework
Satish Kumar, Shubhangi Verma, Purnima Rao, Sachin KamblePurpose
Digitalisation has emerged as an important enabler of sustainable finance for small- and medium-sized enterprises (SMEs). While prior studies have examined the roles of digital technologies, financial access and sustainability in SMEs, limited attention has been devoted to understanding the causal mechanisms through which digitalisation facilitates sustainable finance and contributes to sustainability outcomes. This study systematically reviews the literature to develop an integrated understanding of the pathways linking digitalisation, financial capability and sustainable firm performance.
Design/methodology/approach
A systematic literature review of 63 peer-reviewed articles published in Scopus-indexed journals between 2015 and 2026 was conducted. The review employs the theory-context-characteristics-methodology (TCCM) framework and the antecedents-decisions-outcomes (ADO) approach to synthesise the intellectual structure of the field, identify dominant research themes and develop an integrative conceptual framework.
Findings
The review demonstrates that digitalisation enables sustainable finance through several interrelated mechanisms, including enhanced information transparency, reduced transaction costs, improved risk assessment, greater financial inclusion and access to alternative financing channels. These mechanisms strengthen SMEs’ financial capability and digital readiness, thereby facilitating sustainable investments and improving sustainability performance. However, the effectiveness of these relationships depends on institutional support, regulatory environments, technological infrastructure, owner characteristics and firm-level capabilities. Based on these findings, the study proposes an integrative framework linking digital readiness, financial capability, sustainable finance and sustainability outcomes in SMEs.
Originality/value
This study advances the literature by unpacking the causal mechanisms connecting digitalisation and sustainable finance in the SME context. By integrating insights from diverse theoretical perspectives through the TCCM and ADO frameworks, the study develops a testable conceptual framework that explains how digitalisation influences sustainable finance and sustainability performance. The findings provide a future research agenda and offer practical implications for policymakers, financial institutions and SME managers seeking to foster digitally enabled sustainable development.