ASSESSING THE IMPACT OF GREEN FINANCE ON SUSTAINABLE DEVELOPMENT AMONG NEPALESE BANKS: CHALLENGES AND OPPORTUNITIES

Abstract

The thesis titled "Assessing the Impact of Green Finance on Sustainable Development Among Nepalese Banks: Challenges and Opportunities" explores how green finance initiatives influence sustainable development in Nepal. Green finance, which supports environmentally sustainable projects, is increasingly recognized as a key driver of sustainable growth globally and in Nepal, where banks are pivotal in promoting these initiatives. This study adopts a qualitative research design, focusing on banks in major urban centers like Kathmandu, Lalitpur, and Pokhara, where green finance practices are most prominent. The research reveals that green finance initiatives, such as electric vehicle (EV) loans, green home loans, and hydropower project financing, have significantly contributed to reducing carbon emissions and promoting energy efficiency. EV loans have particularly supported the adoption of sustainable transportation, while green home loans have encouraged energy-efficient construction. Hydropower financing, although a critical component of Nepal’s renewable energy strategy, faces regulatory and environmental challenges. The study also highlights the role of green finance in supporting climate smart agriculture and promoting financial inclusion by extending loans to Micro, Small, and Medium Enterprises (MSMEs) for sustainable practices. However, several challenges hinder the widespread adoption of green finance in Nepal. These include limited financial and technological resources, regulatory complexities, and a lack of awareness among key stakeholders. Despite these challenges, the study identifies numerous opportunities, such as the development of green bonds and sustainable loans, and the alignment of financial products with national and global sustainability goals. Overall, the findings suggest that green finance has immense potential to drive sustainable development in Nepal. With improved regulatory frameworks, increased stakeholder awareness, and targeted financial products, Nepalese banks can play a significant role in advancing the country’s environmental and economic sustainability goals.