THE EFFECT OF SUSTAINABLE FINANCE IN CREDIT RISK MANAGEMENT PRACTICES AMONG RURAL COMMERCIAL BANKS IN CHINA

Abstract

This study examines the impact of sustainable finances (economic, social, governance, environment and corporate social responsibility) on credit risk management among rural commercial banks in China. A questionnaire was distributed and collected 109 respondents (rural commercial banks employees) provided their responses. The empirical evidence suggests that environmental sustainable finance and corporate social responsibility are statistically significant to credit risk management. The economic, social and governance sustainable finances are found to be insignificant in influencing credit management. The result of this study allows the regulators, government and practitioners to examine the impact of adopting sustainable finance in commercial banks and the factors that can contribute to better credit risk management.