Sustainable Value Chain for Sustainable Lending of State-Owned Banks in Indonesia

Kepas Antoni Adrianus Manurung (), Hermanto Siregar, Idqan Fahmi and Dedi Budiman Hakim
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Kepas Antoni Adrianus Manurung: School of Business, IPB University, Bogor 16151, Indonesia
Hermanto Siregar: Department of Economics, Faculty of Economics and Management, IPB University, Bogor 16680, Indonesia
Idqan Fahmi: School of Business, IPB University, Bogor 16151, Indonesia
Dedi Budiman Hakim: Department of Economics, Faculty of Economics and Management, IPB University, Bogor 16680, Indonesia

Sustainability, 2024, vol. 16, issue 12, 1-21

Abstract: Banks have enormous potential to support the achievement of sustainable development goals (SDGs) in accordance with their function as financial intermediaries through sustainable lending. However, the average national financing growth for the sustainable business activity category over the past four years is still 12%. The aim of this research is to identify the conditions of sustainable lending at state-owned conventional banks and analyze the influence of the value chain, economic performance, and ESG performance on sustainable lending. The research was conducted at state-owned commercial banks in Indonesia. The research utilized structural equation modeling (SEM). The SEM results of this study describe value chain, ESG performance (environmental, social, and governance), and economic performance and have direct and positive influences on sustainable lending, of which ESG performance has the biggest influence. As per each individual aspect, social orientation makes the biggest contribution toward sustainable lending.

Keywords: commercial bank; value chain; sustainable lending; ESG performance; economic performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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