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Purpose This study aims to use 67 developing countries to examine the role of financial inclusion as an “empowering tool” for renewable energy uptake and to improve environmental sustainability in developing countries. Design/methodology/approach Using a battery of econometric models, including the generalized method of moment-panel vector autoregression (GMM-PVAR), impulse response function, Granger causality, fully modified ordinary least squares and dynamic ordinary least squares, the study proposed and tested three hypotheses. Findings The results from various estimations indicate that financial inclusion has a positive effect on renewable energy consumption and environmental sustainability improvement in developing countries. The findings suggest that financial inclusion can improve environmental sustainability by increasing access to financing to fund renewable energy projects, support sustainable businesses and promote sustainable practices. Originality/value This study suggests that policymakers prioritize financial inclusion to promote renewable energy consumption and environmental sustainability. Policies should enhance access to financial services, offer financial incentives and subsidies, provide affordable loans through microfinance institutions and fintech companies and promote sustainable businesses and green technologies.
Ababio et al. (Tue,) studied this question.