THE ROLE OF DIGITAL INNOVATIONS IN ADVANCING GREEN FINANCE IN INDIA

The role of green finance in pursuing sustainable development has become ever more important, particularly as global concerns about environmental sustainability have grown. The time to wait, however,  has already been short, as digital innovations are playing an enormous role in the development of green finance in India, helping with efficiency, accessibility, and scale. The objective of this empirical study was to describe the influence of emerging digital technologies (i.e. blockchain, artificial intelligence (AI), big data analytics, and fintech platforms) in the direction of shaping India's green finance landscape in particular the green project financing with an emphasis on increasing transparency in green investments. The research used a mixed-methods approach consisting of qualitative interviews of relevant industry players and a quantitative analysis of the flows of green finance, digital financial services, and the policies around them in India. The meta-analysis revealed that within the green finance sector, critical barriers such as transparency gaps, high transaction costs, and limited access to financing for small and medium-sized enterprises (SMEs), could significantly be addressed through digital innovations. Using blockchain technology, tracking green bonds and other sustainable investments became more precise and increased investors’ confidence while minimizing extreme risks. Also using AI-powered tools resulted in more accurate credit scoring which improved risk assessment on green projects and helped channel funding towards such projects. Additionally, fintech platforms and mobile-based applications expanded access to green financial products, making them more attainable to retail investors, low-income communities, and rural regions,  where such offerings were frequently scarce through conventional financial services. Innovative financing models, like peer-to-peer lending and crowdfunding, were enabled by these platforms, which were effective in mobilizing capital towards green projects. Digital innovations also enabled a more inclusive green finance ecosystem by giving people tools to include in sustainable investments, through access to options such as digital wallets, robo-advisors, and online trading platforms. However, there remained several challenges in the form of lackluster regulatory frameworks, low levels of digital literacy in rural India, and anxiety surrounding data privacy. These aspects created obstacles to the widespread deployment of digital solutions in the green finance domain. The study found that digital innovations had indeed accelerated the growth of green finance in the Indian market; however, the government should work towards developing a clement regulatory environment,  expanding digital literacy, and tackling data privacy issues to facilitate the long-term success of green finance initiatives.