Influence Of Banking Practices On Development Green Finance In Kenya
MetadataShow full item record
The pressure for the government and private institutions to play a role in reducing the carbonprint has been on the rise in recent years. taking various steps, the Kenyan financial industry has been lagging behind in the adoption and development of green finance initiatives. This study sought after the influence of banking institutions on the development of green finance initiatives. The specific goal was to assess how banking regulations, green banking policies and banking institutions incentives impact the development of green finance initiatives. The institutional theory, stakeholder theory and resource dependence theory formed the study’s basis. A positivism research philosophy with a cross-sectional research design were adopted. The study’s unit of analysis was 41 commercial banks operating in Kenya, with the unit of observation being 3-senior level managers within the banks. The respondents were sampled through census sampling. The drop and pick method were adopted in collecting questionnaires which were the study’s main data collection tools. Analysis involved use of descriptive and inferential analysis techniques and presentation was in the form of charts and tables. A 72% response rate was obtained with findings showing that most respondents were either branch managers or strategy managers, with most being male staffers with considerable experience in the banking industry. The analysis showed that commercial banks have witnessed improvement in green credit, green mortgages, green bancassurance products and green project financing. The correlation tests showed that banking regulations and green policies positively affect the development of green finance while banking incentives only moderately improved green finance development. Regression analysis revealed that 76.3% of changes in the development of green finance development are results of initiatives started by banking institutions. Conclusions were that while green banking policies and banking regulations have significant positive effects on development of green finance, banking incentives haven’t had a strong positive influence. Recommendations were for the government to become more proactive in their incentive programs and tax exemptions since this would help to increase investment towards green finance. Further, banks are recommended to form strategic alliances with development agencies since this would improve the banks’ capacity to push their partners to develop green finance initiatives.