The role of green credit in improving financial performance Analytical study of commercial banks for the period (2010-2022)

Abstract

The current study aims to help the Iraqi banking system deal with this problem, which is research on knowing the reality of green credit and its role in improving the financial performance of Iraqi commercial banks, which necessitated stopping at this problem and presenting the best proposals that would contribute to enhancing the role of green credit. The study population included the Iraqi banking system, and the time limits of the study included the extended period (2010-2022). The Iraqi banking sector data related to the subject of the study was relied upon, which was used in the financial and standard analysis aspect to measure the variables of the study, as the main hypotheses related to correlation and influence relationships were tested. Among the variables of the study, relying on the statistical program (SPSS), the study reached a set of conclusions, the most important of which is that commercial banks do not distinguish between green credit and credit for projects that are harmful to the environment, as they provide credit of all types, in addition to the weakness of the role of the Central Bank, especially in the first years of the study period. In enacting laws to protect the environment, in addition to the weakness of incentives in this field, the most important recommendations were the need for banks to establish strict procedures and restrictions that limit financing for projects that are harmful to the environment by raising interest rates on financing these projects, and moving towards financing with green credit because of its impact on performance. Financial support for banks on the one hand and sustainable development on the other hand, and the need for the Central Bank to take credit measures to stimulate green and environmentally friendly investments, such as green loan installments and soft loans for priority sectors.