Commercial banks ESG integration and MSMEs support: Evidence from Kenya

David Ndwiga

No 100, KBA Centre for Research on Financial Markets and Policy Working Paper Series from Kenya Bankers Association (KBA)

Abstract: The paper examines the effects of commercial banks' adoption of Environmental, Social and Governance practices on Micro, Small and Medium-sized Enterprises support in Kenya. The study is underpinned on the growing demand for sustainable financing by entreprises in the wake of need for sustainable businesses. The study focused on commercial banks that have adopted ESG practices and report their sustainability progress. Using panel data analysis study found that environmental, social and governance practices integration significantly increases the number of Micro, Small and Medium-sized Enterprises trained. Conversely, banks' ESG adoption was found to positively but insignificantly affect MSME lending. The results conclude that banks' training to MSMEs is necessary but not sufficient for increased MSME lending.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:kbawps:340179

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