Effect of Green Loan and Green Mortgage on Climate Change Mitigation in Nigeria

Abstract : Green loans and green mortgages can provide huge opportunities to tackle climate change in Nigeria by providing finance for energy efficient housing and sustainable infrastructure; supporting renewable energy uptake; and creating jobs in the green economy. However, in Nigeria there are still limited examples of green loans and green mortgages due to a lack of empirical evidence; lack awareness from stakeholders, and the necessity to develop stronger policies and regulations to improve the effectiveness of green loans and green mortgages. Therefore, the aim of this paper is to determine the impact of green loans and green mortgages as a great way of addressing climate change in Nigeria; the study explains the effect in a ex-post facto study covering the 2012 to 2024 period. The study relied on time series secondary data, and the data was collected on a quarterly basis and secondary data was obtained directly from the Statistical Bulletin provided by a number of agencies including the Central Bank of Nigeria, Nigerian Stock Exchange, National Bureau of Statistics, World Bank and International Monetary Fund, United Nations Framework Convention on Climate Change and the use of an econometric technique of the Autoregressive Distributed Lag model to analyse the data. The study found that green loans and green mortgages have positive and statistically significant effects on Nigeria’s emissions of greenhouse gases. In conclusion, the study says that green loans and green mortgages have a positive impact on climate change mitigation in Nigeria. The study puts forward a number of ways to strengthen outcomes. Policymakers should implement more robust screening and monitoring processes. The requirements for loan approvals should put emphasis on verifiable reduction of emissions targets of borrower’s projects, with the borrower to be required to report on environmental outcomes periodically.