Factors affecting green banking practices: exploratory factor analysis on Vietnamese banks

Abstract

This paper aims at studying the factors affecting green banking practices in Vietnam and the role of green banking in sustainable development of the Vietnamese economy. A large scale survey con-ducted with 32 banks and financial organizations in Vietnam to obtain 329 questionnaire forms in the period from May to July 2016 provides evidence for the research. By using EFA analysis and the regression model, we find that understanding the definitions of green banking, the current activities of green banking, the advantages in developing green banking, and the focused sectors have positive relationships with the willingness of Vietnamese banks to adopt green banking practices, whereas the barriers have negative relation-ships with the willingness to utilize green banking services among Vietnamese banks. From the research findings, we suggest some solutions to not only enhance the understanding of the importance of green banking in economic development but also improve the willingness to follow green banking practices among Vietnam’s banking institutions.