International Journal of Applied Finance and Business Studies
Vol. 11 No. 3 (2023): December: Applied Finance and Business Studies

The impact of green finance on profitability with credit risk as an intervening variable

Afifah Afifah (Universitas Tanjungpura, Indonesia)
Erna Listiana (Universitas Tanjungpura, Indonesia)
Wendy Wendy (Universitas Tanjungpura, Indonesia)
Mustarudin Mustarudin (Universitas Tanjungpura, Indonesia)
Giriati Giriati (Universitas Tanjungpura, Indonesia)



Article Info

Publish Date
30 Dec 2023

Abstract

Sustainable Development Goals (SDGs) have become a global concern and have touched various industrial sectors. Through the application of green finance in the financial industry, green credit is provided by banks to support the sustainability of business projects based on environmental sustainability as determined in the Sustainability in the Sustainable Business Activity Category (KKUB) by OJK. On the other hand, as profit-oriented companies, banks need to consider how it impacts credit risk and banking profitability. Using credit risk as an intervening variable, this study seeks to establish the correlation between green finance and profitability of banks listed on the Indonesia Stock Exchange. This research uses the path analysis method and a quantitative study using the financial statements of banks that apply green finance for 2018-2022. The result shows that green lending (green finance) positively affects credit risk and negatively impacts bank profitability. Other result shows that credit risk can mediate the development of green lending on profitability.

Copyrights © 2023






Journal Info

Abbrev

ijafibs

Publisher

Subject

Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

Description

International Journal of Applied Finance and Business Studies is published with both online and print versions devoted to provide the publication of research finding in finance and business research studies. Objectives The main goal of ijafibs is to present outstanding, high quality research ...