Green lending in Kazakhstan: Bank-level drivers, volumes, stability channels, and short-horizon forecasts (2015–2024)

Abstract

Green lending growth can support bank resilience and is therefore relevant to Kazakhstan’s pathway to carbon neutrality by 2060. The study created a panel of banking years (2015–2024) and assessed the relationships between banks’ regulatory compliance, digitalization, borrowers’ ESG performance, and green loan volumes using multivariate models. The research provides short-term forecasts using compressed ARIMAX and policy scenarios. Moreover, 20 purposively selected semi-structured interviews (commercial bank executives, SME owners, customers, and policy experts) and a national survey of 850 adult bank customers / SME owners led by the author were added. Across preferred specifications, regulatory eligibility and borrower ESG are consistently positive: policy support is associated with KZT 7-9 billion more green credit per bank year, and each one-point increase in borrower ESG is associated with KZT 0.34-0.38 billion higher volumes. Digitalization is positive but model-sensitive, strengthening within-bank variation; larger banks extend more green credit, consistent with capacity advantages. The results are interpreted through three stability channels: improved screening/asset quality, portfolio tilt toward taxonomy-aligned exposures, and funding access without making solvency claims. Scenario paths suggest aggregate green lending could reach KZT 80-96 billion by 2027 under aligned policy-ESG-digital conditions; under weak support, it may stagnate near KZT 49-55 billion. Findings motivate the development of a binding taxonomy with standardized disclosures, a national ESG scorecard registry, and inclusive digital rails to enhance SME and rural uptake.