Green banking involves financing practices by commercial banks, which are environmentally compliant and sustainable. Empirical studies reveal that financial institutions have adopted green banking policies in Kenya, Africa, and other developing countries worldwide. However, the adoption of green financing policies is still shallow compared to their industrialized counterparts. Therefore, the main aim of this study is to establish the relationship between green banking and the performance of commercial banks in Kenya. The specific objective of this study is to determine the relationship between electronic transaction volumes and profit before tax of commercial banks in Kenya using quantitative research paradigm and longitudinal time series research design.
The study is anchored on the CAMEL model, CAMPARI framework and 5Cs lending model. Results of the study reveal that electronic transaction volumes significantly influence profit before tax of commercial banks in Kenya ((β =.64, p =0.000<0.05). Therefore, it is concluded that green banking influences the performance of commercial banks in Kenya. This study is essential to scholars, regulators and commercial bank managers.
Authors:Dr. Ondiwa Simon Oluoch, Dr. Fredrick Onyango Aila, Wicklife Odhiambo Okinda
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