Abstract: The effect of climate change on livelihood vulnerability has increased in developing countries and hence there is need for creative financing mechanisms that create resilience and sustainable development. The study looks into the associations between Green Microfinance (GMF), Financial Inclusion (FI), Climate Adaptation Capacity (CAC), Sustainable Livelihoods (SL), Climate Resilience (CR) and Institutional Support (IS) in vulnerable economies. Based on the Sustainable Livelihood Approach and Financial Inclusion Theory, a theoretical framework was developed and tested using the Structural Equation Modeling (SEM) method. Primary data was gathered from 533 survey participants using a structured questionnaire under a stratified random sampling technique. The measurement model showed very good psychometrics properties with high factor loadings, acceptable reliability and validity and good model fitness (χ²/df = 2.038, CFI = 0.982, TLI = 0.980, RMSEA = 0.044). The exploratory factor analysis yielded six separate constructs accounting for 88.73% of the total variance. But the structural model indicated that most of the assumed associations are statistically insignificant whereas the Climate Adaptation Capacity has a negative significant impact on Sustainable Livelihoods (β = −0.091, p < 0.05). The above discussion implies that climate adaptation projects are likely to incur initial costs for economic activities and produce livelihood gains over time, especially in economies where there are resource constraints. In addition, the findings imply that green microfinance and institutional approaches are not sufficient enough to improve financial inclusion and resilience to climate change without making additional investments in capacity building, good governance, financial education, and livelihood diversification. The current research makes an essential contribution to the literature since it brings together green finance, financial inclusion, and resilience to climate change in one research framework and develops a measurement tool to be used in future research studies. Keywords: Green Microfinance; Financial Inclusion; Climate Adaptation Capacity; Sustainable Livelihoods; Climate Resilience; Institutional Support; Sustainable Finance; Vulnerable Economies and Sustainable Development. Title: Green Microfinance and Climate Resilience: Evaluating the Role of Financial Inclusion in Building Sustainable Livelihoods in Vulnerable Economies Author: Kirubakaran Arumugam, Dr.N.Bharathi International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online) Vol. 14, Issue 1, April 2026 - September 2026 Page No: 684-697 Research Publish Journals Website: www.researchpublish.com Published Date: 22-July-2026 DOI: https://doi.org/10.5281/zenodo.21486230 Paper Download Link (Source) https://www.researchpublish.com/papers/green-microfinance-and-climate-resilience-evaluating-the-role-of-financial-inclusion-in-building-sustainable-livelihoods-in-vulnerable-economies
Arumugam et al. (Wed,) studied this question.