Regional economic growth is the primary driver of sustainable business financing in Central Kalimantan, according to a recent study covering the period from 2011 to 2025. Researchers Tabitaria Pandu Mau, I Wayan Budiasa, and Widhianthini from Universitas Udayana analyzed how macroeconomic dynamics shape the region's green financing landscape. Their findings offer critical insights into how financial sectors in resource-dependent regions effectively navigate the transition toward an environmentally conscious economy.
Indonesia’s financial architecture is shifting toward sustainability, with the Financial Services Authority (OJK) mandating that banks integrate environmental, social, and governance (ESG) factors into their operations. However, implementing these policies in regions like Central Kalimantan—where the economy relies heavily on natural resources—presents unique challenges due to varying institutional capacities, local economic structures, and project readiness.
The research team evaluated quarterly data from 2011 to 2025 to track how interest rates, inflation, and regional economic growth influence sustainable financing. By mapping how funds flow into environmentally friendly business categories, the study provides a clear view of how macroeconomic conditions influence bank lending decisions in the region.
The research identifies three key findings regarding the financing patterns:
- Economic Growth as the Catalyst: A one percent increase in regional economic growth corresponds to a 1.11 percent rise in sustainable financing within the same quarter. Stronger regional growth boosts borrower cash flow and collateral value, making banks more confident in extending "green" credit.
- Limited Impact of Interest Rates: While higher interest rates generally tend to dampen financing—causing a 0.65 percent decline per percentage point—the effect is not statistically significant. This suggests that sustainable financing in Central Kalimantan possesses a degree of resilience against short-term capital cost fluctuations.
- Inflation’s Nominal Effect: Inflation does not have a major long-term impact but forces short-term nominal adjustments. Rising costs for materials, transport, and labor force businesses to seek additional working capital, which appears as an increase in the nominal volume of financing rather than a genuine shift in real investment.
This study highlights that sustainable financing policies must look beyond simple interest rate incentives. Regional governments and financial institutions must focus on building a robust pipeline of investment-ready projects and maintaining consistent classification standards. Ultimately, the success of green finance depends not just on the volume of funds, but on the quality of project preparation and the verifiable environmental performance of the businesses involved.
Author Profiles
- Tabitaria Pandu Mau: Postgraduate student in the Master’s Program in Sustainable Development and Finance at Universitas Udayana.
- Prof. Dr. Ir. I Wayan Budiasa, S.P., M.P., IPU, ASEAN Eng.: Lecturer and expert in sustainable development at Universitas Udayana.
- Dr. Widhianthini, S.P., M.Si.: Lecturer and expert in agricultural economics and finance at Universitas Udayana.
Research Source:
Mau, T. P., Budiasa, I. W., & Widhianthini. (2026). "Macroeconomic Determinants of Sustainable Business Financing in Central Kalimantan". International Journal of Integrated Science and Technology (IJIST), 4(7), 517-530. DOI:
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