Effectiveness of Internal Control in Green Credit: Influential Factors in Vietnam's Commercial Banking Sector

Abstract

This study investigates the effectiveness of internal controls governing green credit operations in Vietnamese commercial banks. We employ regression analysis to identify key factors influencing control effectiveness. Six key areas emerge: Risk Management, Macroeconomic Factors, Monitoring Activities, Group Benefits, Work Motivation, and Information and Communication. Independent sample T-tests and one-way ANOVA tests reveal significant variations in control effectiveness based on employee age groups and positions within the banks. Further analysis categorizes these factors into strong and weak impact groups based on their Beta coefficients. Risk Management and Macroeconomic Factors emerge as strong influencers, highlighting the critical role of robust risk management practices and favorable economic conditions. Conversely, Monitoring Activities, Group Benefits, Information and Communication, and Work Motivation have weaker but still notable impacts, suggesting areas for improvement in internal supervisory practices, communication systems, and employee motivation strategies. The findings underscore the critical role of risk management and macroeconomic factors while highlighting opportunities for enhancing supervisory practices, internal communication, and employee motivation within Vietnamese commercial banks.