Sustainable Financial Practices in Kerala’s small business enterprises Sector: Pathways for Growth and Resilience

Abstract

Small business enterprises (SBEs)—primarily micro and small firms operating across manufacturing, services, and trade—are central to Kerala’s employment generation and local value creation. Yet many such firms remain financially vulnerable due to constrained access to formal credit, weak financial planning, and exposure to market and climate-related shocks. This study examines the adoption and effects of sustainable financial practices among SBEs in Kerala. Primary data were collected from 300 owners and financial managers using a structured questionnaire. The analysis assesses practices including cost optimisation, responsible borrowing and credit management, basic environmental investments (energy efficiency and resource conservation), digital accounting, and financial transparency. Descriptive statistics, Pearson correlation, and chi-square tests indicate a positive association between sustainable financial practices and both financial resilience and growth performance. The findings underline the importance of financial literacy, digital integration, and access to sustainability-linked finance. The study concludes with actionable recommendations for policymakers, financial institutions, and enterprise support agencies to strengthen the financial and environmental sustainability of Kerala’s small business enterprises.