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    <title>EconStor Community:</title>
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        <rdf:li rdf:resource="https://hdl.handle.net/10419/340180" />
        <rdf:li rdf:resource="https://hdl.handle.net/10419/340174" />
        <rdf:li rdf:resource="https://hdl.handle.net/10419/340178" />
        <rdf:li rdf:resource="https://hdl.handle.net/10419/340175" />
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    <dc:date>2026-04-28T11:40:02Z</dc:date>
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  <item rdf:about="https://hdl.handle.net/10419/340180">
    <title>The mediating role of ESG on the interaction between green banking and financial performance of commercial banks in Kenya</title>
    <link>https://hdl.handle.net/10419/340180</link>
    <description>Title: The mediating role of ESG on the interaction between green banking and financial performance of commercial banks in Kenya
Authors: Maru, Lucy
Abstract: Green banking practice involves the bank's internal operations, external operations and lending decisions which are environmentally, socially and governance (ESG) compliant and sustainable. In Kenya, green banking practice is influenced internally and externally and is context based. Adverse weather patterns such as drought and floods have recently influenced income in sectors such as agriculture, transport and manufacturing. The adverse effects have affected GDP and livelihoods and as a trickle down influenced savings and investments. From the year 2012, conversation on sustainable financial institution was tabled through a CEO round table targeting players in the banking sector. The aim was to transform the banking industry to be more resilient and sustainable. One way of greening the banking sector was by embracing green banking practices and incorporating ESG in banks' processes and products. This paper aims to investigate how green banking interacts with ESG performance to shape the financial outcomes of commercial banks in Kenya. The paper looks at profitability assessed through ROA and credit risk assessed through NPLs. Anchored on the stakeholder theory, the resource-based view theory and the institutional theory, the paper goes further to test the role of ESG as a mediator on the interaction between green banking and financial performance of commercial banks in Kenya. The paper uses panel data collected from commercial banks in Kenya. Secondary data on GBI, ESG and financial performance was collected for a period of 13 years. ESG and GBI measures were obtained, measured and scored using existing literature. The study analysed a total of 25 commercial banks applying balanced panel data regression with firm fixed effects and controls per year. Mediation analysis was used to test the indirect effect of green banking (independent variable) on financial performance (dependent variable) through the mediating variable (ESG). The findings of the study indicate that green banking positively influences financial performance The findings also indicate that green banking reduces credit risk. As a mediator, ESG shows a statistically strong association with green banking. However, from the mediator, there is a limited mediating effect on performance and risk. The findings indicate that as commercial banks embrace ESG practices, they become greener and this has a positive and statistically significant relationship with financial performance. Therefore, this paper aims at proposing measures that policy makers and banks as heads of the supply chain can adopt in driving climate risk mitigation and adaptation, and incorporating ESG in banking practice, while safeguarding financial performance. The paper encourages commercial banks to embrace green banking and ESG practices in order to draw short term, medium term and long-term benefits that accrue.</description>
    <dc:date>2026-01-01T00:00:00Z</dc:date>
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  <item rdf:about="https://hdl.handle.net/10419/340174">
    <title>Cost of credit, digital finance and bank capital: Implications for MSME lending and performance in Kenya</title>
    <link>https://hdl.handle.net/10419/340174</link>
    <description>Title: Cost of credit, digital finance and bank capital: Implications for MSME lending and performance in Kenya
Authors: Tiriongo, Samuel; Mulindi, Hillary; Nyagaka, Hesborn; Milimo, Davis
Abstract: The study examines how cost of credit, digital finance and bank capital shape MSME lending and performance in Kenya. Using FinAccess 2024 microdata and bank-level panel data (2011-2024), we estimate a control-function Probit, Mundlak Random Effects Logit and System-GMM model. Results show that perceived high borrowing costs are endogenous to loan access, but become insignificant once corrected. Firm age, size, formalization and female ownership significantly improve loan access. Digital finance usage for business transactions increases approval probabilities, while urban location widens access gaps. On the supply side, capital adequacy significantly anchors sustainable loan growth. Overall, MSME performance is driven more by structural firm characteristics and credit supply conditions than by cost perceptions alone.</description>
    <dc:date>2026-01-01T00:00:00Z</dc:date>
  </item>
  <item rdf:about="https://hdl.handle.net/10419/340178">
    <title>Unlocking MSME credit: Sector specific insights from Kenya</title>
    <link>https://hdl.handle.net/10419/340178</link>
    <description>Title: Unlocking MSME credit: Sector specific insights from Kenya
Authors: Kimani, Stephanie
Abstract: This study investigates the sector-specific determinants of MSME credit in Kenya across three dominant sectors-real estate, trade, and transport &amp; communication-that collectively account for nearly 70% of bank MSME lending. Using quarterly data from 2012 to 2024, we apply sectoral Autoregressive Distributed Lag (ARDL) models to capture both short-run dynamics and long-run equilibrium relationships. The analysis integrates supply-side indicators (non-performing loan ratios, lending interest rates, and banking sector liquidity) with demand-side proxies (sectoral GDP), while also introducing a structural policy shock through the 2016-2019 interest rate cap as a dummy variable. Findings reveal significant sectoral heterogeneity: MSME credit in real estate is decoupled from GDP growth and more sensitive to liquidity; trade credit strongly follows sectoral GDP but is vulnerable to NPL shocks; and transport &amp; communication lending exhibits the fastest adjustment to equilibrium, shaped by both demand conditions and borrowing costs. The results provide novel empirical evidence on the differentiated nature of MSME credit drivers in Kenya and highlight the importance of sector-sensitive credit policies, robust risk-sharing frameworks, and targeted liquidity support mechanisms.</description>
    <dc:date>2026-01-01T00:00:00Z</dc:date>
  </item>
  <item rdf:about="https://hdl.handle.net/10419/340175">
    <title>MSME partial credit guarantees in Kenya: What 28.000 loans reveal about risk and pricing</title>
    <link>https://hdl.handle.net/10419/340175</link>
    <description>Title: MSME partial credit guarantees in Kenya: What 28.000 loans reveal about risk and pricing
Authors: Ochenge, Rogers
Abstract: Partial Credit Guarantees (PCGs) are central to MSME finance, yet their pricing impact is uneven. Using loan-level evidence from 28,356 guaranteed MSME loans issued in Kenya between 2013 and 2024, this paper examines whether PCGs reduce defaults and borrowing costs, and separately benchmarks Kenya's treasury-run Credit Guarantee Scheme (CGS) against international standards. The results show that higher coverage reduces default rates, especially in high-risk sectors such as agriculture and community services, and modestly lowers interest rates. However, when loans are already collateralized, the marginal benefit of guarantees is limited, and sectoral pricing disparities persist, suggesting that banks do not fully transmit risk-sharing gains to MSMEs. The comparative review highlights several design gaps in Kenya's treasury CGS: coverage is fixed rather than risk-based, allocation of guarantees is largely bank-driven, fees do not reflect borrower risk. These features contrast with leading international models such as the U.S. SBA 7(a) program, Korea's KODIT, and Chile's FOGAPE, which use tiered coverage, risk-based pricing, and stronger governance mechanisms. Overall, while PCGs in Kenya expand credit and reduce lender risk, they have not consistently lowered borrowing costs. Reforms that introduce flexible, risktiered coverage, risk-based fees and transparent allocation would align Kenya's system with global best practice and enhance its role in supporting MSME finance under Vision 2030.</description>
    <dc:date>2026-01-01T00:00:00Z</dc:date>
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