As green transformation action plans accelerate, embracing micro, small, and medium enterprises (MSMEs) to drive the green transition is imperative. This chapter explores South Africa’s government-led green financing policies for MSMEs, assessing their effectiveness in bridging the finance gap. It recognizes the limitations of global financing mechanisms and emphasizes the importance of domestic resource mobilization in addressing the issue. The study is grounded in institutional, behavioural, market failure, and evolutionary economic theories. It examines how South Africa’s regulatory frameworks, support programs, and initiatives influence MSMEs’ adoption of carbon-neutral practices and shape their green financing behavior. Relying on document analysis of public organizational reports, surveys, and official records, South African policies were examined alongside Malaysia’s approach. Malaysia’s experience, particularly its integration of the ESG framework, financial support, and tax incentives, is a comparative reference for understanding effective strategies in promoting low-carbon practices within the MSME sector. Our findings indicate that South Africa’s structure is fragmented and decentralized, often diluting policy impact. The study recommends that South Africa establish a central coordinating platform to align mandates across government agencies, ensuring inclusive selection of the inter-agency committee members. Furthermore, we endorse that targeted financial and tax reliefs ensure efficient allocation of resources, making policy interventions more impactful. To bridge the MSME green finance gap, South Africa needs to develop a robust fiscal framework with tailored policies and initiatives designed to strengthen support for the sector.