Perceived Barriers among SMEs in Banyuwangi to Engage in Green Entrepreneurship

Abstract

The transition towards sustainable business practices is critical for addressing environmental challenges and ensuring long-term economic resilience. However, small and medium-sized enterprises (SMEs), particularly in developing regions, often face substantial barriers to adopting green entrepreneurship. This study investigates the perceived barriers that hinder SMEs in Banyuwangi, East Java, from implementing environmentally friendly business models. A quantitative approach was employed, with data collected from 88 SME owners through structured questionnaires across key sectors such as food processing, handicrafts, and tourism services. The analysis identifies four dominant categories of perceived barriers: (1) limited financial resources and access to green financing; (2) inadequate knowledge and technical skills regarding sustainable practices; (3) weak market demand and unclear economic benefits of green products; and (4) regulatory and institutional constraints, including insufficient local government support and unclear policy guidelines. Additionally, cultural attitudes and traditional business mindsets were found to subtly influence the adoption process. The findings emphasize the need for targeted policy interventions, capacity-building programs, and market incentives to overcome these barriers and foster a supportive ecosystem for green entrepreneurship in Banyuwangi. These insights contribute to the growing body of literature on sustainability in SMEs and offer practical recommendations for policymakers and development agencies aiming to accelerate the green transition at the local level.