Green Financing and the Financial Performance of Commercial Banks Listed on the Nairobi Securities Exchange: Empirical Evidence from Sustainable Financial Innovations

Authors

  • Duncan Owino Sino Jaramogi Oginga Odinga University of Science and Technology
  • Dr. Edwins Baraza Jaramogi Oginga Odinga University of Science and Technology
  • Dr. Fronica Monari Jaramogi Oginga Odinga University of Science and Technology

DOI:

https://doi.org/10.47604/ijfa.3578

Keywords:

Green Financing, Sustainable Banking, Financial Performance, ESG Integration, Nairobi Securities Exchange, Corporate Governance

Abstract

Purpose: This study examines the influence of green banking defined as green lending, green bonds, ESG-aligned lending standards, and sustainable finance adoption on the financial performance of commercial banks listed on the NSE.

Methodology: The study applies a positivist philosophy and correlational design using secondary data (2021–2023). Regression, diagnostic tests, and hypothesis testing were conducted using bank-level audited financial and sustainability reports.

Findings: Green banking shows a positive but statistically insignificant effect on ROE (β = 0.114; p = 0.103). Diagnostic tests reveal non-normality, weak linearity, and low R², indicating immature adoption and inconsistent ESG reporting.

Unique Contribution to Theory, Practice and Policy: Strengthen regulatory incentives, standardize ESG reporting, develop green-lending capacity, expand green bond markets, and embed climate-risk assessments into lending operations.

 

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References

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Lindenberg, N. (2014). Definition of green finance (Discussion Paper). German Development Institute.

Mangwa, L., & Jagongo, A. (2022). Green financing and financial performance of listed commercial banks in Kenya. International Journal of Finance and Accounting, 11(2), 45–59.

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Rogers, E. M. (2003). Diffusion of innovations (5th ed.). Free Press.

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Published

2025-11-26

How to Cite

Sino, D., Baraza, E., & Monari, F. (2025). Green Financing and the Financial Performance of Commercial Banks Listed on the Nairobi Securities Exchange: Empirical Evidence from Sustainable Financial Innovations. International Journal of Finance and Accounting, 10(7), 57–64. https://doi.org/10.47604/ijfa.3578

Issue

Vol. 10 No. 7 (2025)

Section

Articles

License

Copyright (c) 2025 Duncan Owino Sino, Dr. Edwins Baraza, Dr. Fronica Monari

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.