IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i18p7901-d1475193.html

Sustainable Finance Meets FinTech: Amplifying Green Credit’s Benefits for Banks

Author

Listed:
  • Zhitao Li

    (Lingnan College, Sun Yat-Sen University, Guangzhou 510275, China
    Postdoctoral Research Workstation, Guangzhou Yuexiu Holdings Limited, Guangzhou 510623, China)

  • Ping Chen

    (Lingnan College, Sun Yat-Sen University, Guangzhou 510275, China)

Abstract

In recent years, green credit has significantly supported the development of the sustainable economy. However, the existing literature presents differing views on the impact of green credit on bank performance, which is crucial for the sustainability of green credit business. Meanwhile, FinTech is comprehensively empowering green credit business. This paper investigates whether FinTech influences the effect of green credit on bank performance. Based on an analysis of data from 127 Chinese commercial banks from 2007 to 2022, we find that green credit significantly enhances bank performance, and FinTech further amplifies this positive effect. This finding partially explains the conflicting views in the existing literature, as the impact of green credit on bank performance varies under different levels of FinTech. We believe that FinTech exerts its influence through three mechanisms: cost reduction, reputation enhancement, and risk mitigation. Heterogeneity analysis reveals that the impact of FinTech is more pronounced in city commercial banks, in samples with better green credit development, and during banking industry downturns. Finally, we recommend that banks actively develop FinTech and apply it to green credit businesses to maximize the positive effects of green credit. Simultaneously, regulators and governments should provide necessary support for banks.

Suggested Citation

  • Zhitao Li & Ping Chen, 2024. "Sustainable Finance Meets FinTech: Amplifying Green Credit’s Benefits for Banks," Sustainability, MDPI, vol. 16(18), pages 1-30, September.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:18:p:7901-:d:1475193
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/18/7901/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/18/7901/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Qian Liu & Yiheng You, 2023. "FinTech and Green Credit Development—Evidence from China," Sustainability, MDPI, vol. 15(7), pages 1-23, March.
    2. Luo, Sumei & Yu, Shenghui & Zhou, Guangyou, 2021. "Does green credit improve the core competence of commercial banks? Based on quasi-natural experiments in China," Energy Economics, Elsevier, vol. 100(C).
    3. Anagnostopoulos, Ioannis, 2018. "Fintech and regtech: Impact on regulators and banks," Journal of Economics and Business, Elsevier, vol. 100(C), pages 7-25.
    4. Kayenaat Bahl & Ravi Kiran & Anupam Sharma, 2022. "Impact of Drivers of Change (Digitalization, Demonetization, and Consolidation of Banks) With Mediating Role of Nature of Training and Job Enrichment on the Banking Performance," SAGE Open, , vol. 12(2), pages 21582440221, May.
    5. Gao, Yihong, 2022. "Green credit policy and trade credit: Evidence from a quasi-natural experiment," Finance Research Letters, Elsevier, vol. 50(C).
    6. Nariman Abuatwan, 2023. "The Impact of Green Finance on the Sustainability Performance of the Banking Sector in Palestine: The Moderating Role of Female Presence," Economies, MDPI, vol. 11(10), pages 1-21, October.
    7. David Mathuva & Samuel Kiragu & Dulacha Barako, 2020. "The determinants of corporate disclosures of anti-money laundering initiatives by Kenyan commercial banks," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 23(3), pages 609-635, March.
    8. Asish Saha & Lim Hock-Eam & Siew Goh Yeok, 2018. "Deciphering drivers of efficiency of bank branches," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 13(2), pages 391-409, April.
    9. Xiaoling Song & Huizhi Yu & Zehai He, 2023. "Heterogeneous Impact of Fintech on the Profitability of Commercial Banks: Competition and Spillover Effects," JRFM, MDPI, vol. 16(11), pages 1-17, November.
    10. Zhou, Guangyou & Sun, Yongkun & Luo, Sumei & Liao, Jiayi, 2021. "Corporate social responsibility and bank financial performance in China: The moderating role of green credit," Energy Economics, Elsevier, vol. 97(C).
    11. Fikri Ali Fata & Zaenal Arifin, 2024. "The impact of green credit distribution on bank performance and influencing factors: a case study of Indonesian banks," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(1), pages 323-332, January.
    12. Xiaoyan Gao & Yiyang Guo & Jianxu Liu, 2022. "The Green Credit Policy Impact on the Financial Performance of Commercial Banks: A Quasi-Natural Experiment from China," Mathematical Problems in Engineering, Hindawi, vol. 2022, pages 1-16, November.
    13. Shang, Xiaoting & Niu, Huayong, 2023. "Does the digital transformation of banks affect green credit?," Finance Research Letters, Elsevier, vol. 58(PB).
    14. Gregor Dorfleitner & Diana Braun, 2019. "Fintech, Digitalization and Blockchain: Possible Applications for Green Finance," Palgrave Studies in Impact Finance, in: Marco Migliorelli & Philippe Dessertine (ed.), The Rise of Green Finance in Europe, chapter 0, pages 207-237, Palgrave Macmillan.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Murè, P. & Giorgio, S. & Antonelli, V. & Bittucci, L., 2025. "Environmental credit products: Where do we stand? A response from an academic content analysis," The Quarterly Review of Economics and Finance, Elsevier, vol. 100(C).
    2. Yamin Li & Guo Wu, 2025. "The green advantage: mapping the profit power of green credit in commercial banks," Economic Change and Restructuring, Springer, vol. 58(2), pages 1-29, April.
    3. Zhou, Guangyou & Zhu, Jieyu & Luo, Sumei, 2022. "The impact of fintech innovation on green growth in China: Mediating effect of green finance," Ecological Economics, Elsevier, vol. 193(C).
    4. He, Zuojing & Ge, Fangting & Ban, Shengxi & Min Du, Anna & Sheehan, Maura, 2024. "Fintech's influence on green credit provision: Empirical evidence from China’s listed banking sector," Research in International Business and Finance, Elsevier, vol. 70(PB).
    5. William Gaviyau & Athenia Bongani Sibindi, 2023. "Global Anti-Money Laundering and Combating Terrorism Financing Regulatory Framework: A Critique," JRFM, MDPI, vol. 16(7), pages 1-21, June.
    6. Luqi Yuan & Shihong Zeng, 2023. "An Empirical Study on the Impact of Green Credit on Financial Performance of China’s Listed Banks," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(2), pages 1-5.
    7. Zhang, Yujin & Ye, Shujun & Liu, Jie & Zhang, Lulu & Li, Jiayi, 2025. "Can digital transformation of commercial banks reduce green credit risks?," International Review of Financial Analysis, Elsevier, vol. 99(C).
    8. Lee, Chien-Chiang & Xiao, Qian & Zhang, Xiaoming, 2025. "Green credit and systemic risk: From the perspectives of policy and scale," The North American Journal of Economics and Finance, Elsevier, vol. 77(C).
    9. Chen Jiaxu, 2025. "Impact of Green Credit on the Performance of Commercial Banks: Evidence from 42 Chinese Listed Banks," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 19(1), pages 1-15.
    10. Liyun Liu & Yefan Liu & Mingming Zhang & Xinyu Zhou & Jia Huang, 2025. "How Does Green Credit Affect Corporate Green Investment Efficiency? A Test Based on Listed Corporations in China’s Heavy Pollution Industry," Sustainability, MDPI, vol. 17(8), pages 1-24, April.
    11. He, Dongwei & Wu, Yifan & Wang, Yifan & Xing, Xueyan, 2023. "Prudential regulation and bank performance: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    12. Ma, Yong & Chen, Diandian, 2025. "How green credit policies drive green innovation: evidence from a natural experiment in China," Journal of Economic Behavior & Organization, Elsevier, vol. 239(C).
    13. Zhang, GuanJie & Song, Fei & Liu, Xi, 2025. "The impact and mechanism analysis of bank digital transformation on green credit," Finance Research Letters, Elsevier, vol. 85(PC).
    14. Xianghua Yuan, 2025. "Integrating Fintech, CSR, and green finance: impacts on financial and environmental performance in China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-15, December.
    15. Tian, Gary & Wang, Kun Tracy & Wu, Yue, 2025. "Does the market value the green credit performance of banks? Evidence from bank loan announcements," The British Accounting Review, Elsevier, vol. 57(5).
    16. de Moraes, Claudio Oliveira & Cunha, Leonardo Vieira & Galvis-Ciro, Juan Camilo, 2024. "Banking sustainability in a large emerging economy: Focus on Brazilian banks," Journal of Economics and Business, Elsevier, vol. 132(C).
    17. Yu Bai & Xinshan Zhong, 2026. "Topics of green credit policy in China based on text mining and their impact on the stock returns of heavily polluting enterprises," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 28(2), pages 4741-4777, February.
    18. Raymond Kwong & Man Lung Jonathan Kwok & Helen S. M. Wong, 2023. "Green FinTech Innovation as a Future Research Direction: A Bibliometric Analysis on Green Finance and FinTech," Sustainability, MDPI, vol. 15(20), pages 1-27, October.
    19. Kingsley E. Dogah & Presley K. Wesseh & Samuel Adomako, 2025. "Green credit policy, technological innovation, and corporate financial performance: Evidence from the energy industry," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 1171-1188, January.
    20. Li, Jingyu & Guo, Xiangyuan & Xie, Qiwei & Sun, Xiaolei, 2024. "Green credit efficiency of commercial banks in China: Evidence from a multi-period leader-follower model with preference," International Review of Financial Analysis, Elsevier, vol. 96(PA).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:18:p:7901-:d:1475193. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.