Effective guarantee schemes are needed in order to support financing of green assets.
Kenya Bankers Association Chief Executive Officer Habil Olaka says this will minimize risks allowing financial institutions to increase lending to sectors such as agriculture and energy generation.
He was speaking during the Sustainable Finance Catalyst Awards where Cooperative Bank of Kenya emerged overall winner.
Sustainable Finance Catalyst Awards were created to recognize institutions that practice sustainable finance which has a direct positive impact on the financial sector, the economy, the environment and the society at large.
Cooperative Bank of Kenya beat 13 other applicants to emerge the Overall Winner of the award.
KCB emerged second overall and Equity Bank third.
In the individual categories, Cooperative Bank was the best in tier 1 commercial lending, operations and policy.
Safaricom was best in sustainability through policy and governance category, while KCB won in sustainable finance category.
DTB was the winner in SME financing, Equity Bank was awarded as the most improved bank and KWFT won in tier 2 best sustainable financing category.
The bankers say recent adjustments in banking regulations and financial technology has caused a massive overhaul in operations as institutions seek cost effective measures to sustain operations.
The financial sector has been identified as a key catalyst towards achieving a green economy with their priorities now aligned to the sustainable development goals.
However, lending to green assets such as agriculture and renewable energy sector is still wanting.