Green loans and energy-efficient technology adoption: Evidence on sectoral heterogeneity in SMEs

Indonesia’s heavy dependence on coal continues to challenge its national climate targets and the broader sustainability transition. Small and Medium Enterprises (SMEs) play a pivotal role in driving energy-efficiency innovation, yet limited access to affordable finance constrains their capacity to adopt clean technologies. This Study investigates how green loans enable SME adoption of energy-efficient technologies across Indonesia’s key sectors, including agriculture, transportation, and construction. Drawing upon the Technology–Organization–Environment (TOE) framework and the Green Loan Principles (GLP), a structural equation modeling approach was used to analyze the interrelationships among technological, organizational, environmental, and financial factors. The findings reveal that technological factors—particularly relative advantage and compatibility—are the strongest predictors of adoption, while organizational readiness exerts its influence indirectly through GLP. Green loans emerge as a critical mediating mechanism that translates readiness and policy signals into bankable, auditable projects. Sectoral Analysis reveals that while the finance-enabled adoption pathway (TOE → GLP → AET) is structurally consistent across sectors, its economic relevance varies according to sector-specific characteristics. business revenue is found to play a contingent moderating role, strengthening the effectiveness of green loans in capital intensive sectors, particularly transportation. These findings contribute theoretically by clarifying the mediating role of green finance in technology adoption and provides clear implications for policymakers and financial institutions seeking to design inclusive green finance schemes that reduce information asymmetry, de-risk SME investments, and accelerate low-carbon transitions across emerging Asian economies.