GREEN FINANCING AND PRODUCT INNOVATION IN ENTREPRENEURSHIP: EVIDENCE FROM MICRO AND SMALL ENTERPRISES IN NIGERIA

This study investigates the influence of green financing dimensions on product innovation among micro and small enterprises (MSMEs) in Nigeria. Specifically, it examines how renewable energy financing, technology financing, and green infrastructure financing contribute to innovative product development within MSMEs operating in Oworonshoki, Lagos State. A quantitative research approach and descriptive survey design were adopted, targeting owners and employees across retail, manufacturing, and service sectors. A sample size of 384 was determined using Cochran’s formula, and data were collected through a structured questionnaire validated through expert review and reliability testing, with Cronbach’s alpha values ranging from 0.623 to 0.743, indicating acceptable internal consistency. Data were analyzed using descriptive and inferential statistics, including regression analysis. Findings revealed that renewable energy financing has a strong and significant effect on product innovation (R = .832, R² = .692, p < .001), suggesting that investment in clean energy sources substantially enhances innovation. Technology financing also showed a significant positive influence (R = .593, R² = .352, p = .001), indicating that access to modern technologies fosters innovative capabilities within MSMEs. Additionally, green infrastructure financing significantly predicted product innovation (R = .587, R² = .345, p = .001), demonstrating its relevance in supporting sustainable innovation. Overall, the study concludes that green financing initiatives play a crucial role in enabling MSMEs to develop environmentally sustainable and competitive products. It recommends increased policy support and funding schemes to strengthen MSMEs’ adoption of green financing tools and enhance innovation-driven growth.