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HARNESSING FINANCIAL INNOVATION AND GREEN FINANCE MECHANISMS TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS IN EMERGING ECONOMIES

Pages: 14-28
DOI: 10.70102/PS/V9/02

Abstract

Emerging markets today have a severe financing paradox, with enormous
renewable energy growth potential, but are plagued by high capital costs and a 2.5 trillion a
year Sustainable Development Goal (SDG) financing gap. The present work covers the
structural need of the green economy by suggesting a multi-layered and harmonized Green
Credit Efficiency (GCE) system that could help harmonize the incentives of the private sector
with the 2030 Agenda. The architecture employed in the implementation of the methodology
is a four-tier solution consisting of Data Acquisition, Blockchain Verification, GCE Core
Optimization, and Financial Deployment layers, to convert the traditional manual reporting
into a transparent and digital verification system. It applies a mathematical model to the
panel data of 1,200 observations in 15 major emerging economies (2015-2024) in order to
estimate the synergy of Fintech, AI-based risk modeling, and green instruments using a
Technological Innovation Multiplier (TI). The statistical findings confirm that the presented
GCE model works significantly better than the traditional ones, with the Efficiency Index (EG)
of 0.89 and Sustainability Return on investment (SROI) of 5.2:1, in contrast to only 0.28 and
1.1:1 of the traditional finance. Moreover, a study establishes that the efficiency reduction of
32% is found when Fintech integration is abolished, and digital de-risking is shown to lower
capital cost by 15%. It is concluded that the fusion of Green Fintech and AI has become a
prevalent aspect in the execution of the financing gap, and is a reliable tool that can be used
to create a more systemic opportunity in economic resiliency and more rapid development
toward the SDGs.

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