Exploring Motivation and Barriers to Green Banking Practices in Khyber Pakhtunkhwa

Abstract

Abstract

The primary objective of this research endeavor was to investigate the underlying factors that motivate and barriers that hinder the implementation of environmentally sustainable banking practices within the Khyber Pakhtunkhwa Province of Pakistan. The Primary data was collected using exploratory research interviews with various bank personnel, including branch managers, operational managers, credit managers, and environmental risk analyst. A comprehensive set of 26 interviews were conducted, encompassing bank officials from both public and commercial sectors and representatives from Islamic and conventional banking institutions based on saturation of data. Subsequently, the interview data was transcribed and analyzed through a thematic analysis approach. Upon conducting a comprehensive examination of the data for codes and themes, the findings indicated that various factors motivate the implementation of green banking practices. These factors are risk of default, reputational risk, environmental risk, competitive advantage, social responsibility, customer demand, sustainability, cost-effectiveness, innovation and digitalization, and regulatory compliance. The barriers hindering the adoption of green banking practices encompass several factors, including lack of awareness, regulatory hurdles, high costs, infrastructure investments, resistance to change, a limited range of green products, economic conditions, and a lack of collaboration among various stakeholders involved in the implementation of green banking practices. The study further recommends several factors to reduce barriers to green banking including, regulatory support, awareness campaigns, collaboration among stakeholders, financial support, training and development of employees, and the introduction of green financial products. This study holds significance for various stakeholders, such as regulators, policymakers, and academics. This research made a valuable contribution to the theory and practice of green banking practices by investigating the underlying reasons that motivate and obstacles that hinder the widespread adoption of environmentally sustainable banking practices.

    Keywords: green banking practices, motivations, barriers, thematic analysis, Khyber Pakhtunkhwa