Promoting green technology financing: political will and information asymmetries

Malaysia’s allocation of about USD1 billion, for the green technology financing scheme (GTFS), was beset with low uptake rates. This chapter posits that information asymmetries, wherein the regulators, bankers and GTFS-based loan applicants had different perceptions regarding the objectives of GTFS, and the requirements for obtaining these loans, led to the poor uptake. These information asymmetries contributed to the submission of incomplete documentation and information sets by the GTFS-based loan applicants, which led to low bank approval rates. Pertinent information asymmetries are identified, and relevant recommendations are presented, for boosting the GTFS uptake rates, which will in turn promote the adoption of green technology in the Malaysian economy and other emerging economies that are contemplating similar financial incentives for promoting green economic growth.