<p>The study focuses on the indirect effect of green lending products, green lending policies, environmental risk screening, and monitoring and reporting mechanisms through a mediation of risk management on perceived lending outcomes in banks and microfinance institutions in Ethiopia. We selected a sample of 384 from a total population of 1098 for this study. And structural equation modeling (SEM) using SPSS AMOS was applied. The findings show that the green lending product, green lending policies, environmental risk screening, and risk management have a direct effect on the perceived lending outcomes of these banks and microfinance institutions in Ethiopia. On the contrary, the monitoring and reporting mechanism has a positive but insignificant direct effect on the perceived lending outcomes. The indirect effect of green lending products, green lending policies, environmental risk screening, and risk management positively and significantly influences the perceived lending outcomes of banks and microfinance institutions in Ethiopia through effective risk management. The monitoring and reporting mechanisms did not show a significant indirect effect on perceived lending outcomes. The regulators and policymakers of financial institutions should encourage banks and microfinance institutions to expand green loan products and adopt structured lending policies. Besides that, banks and microfinance institutions should mandate policies that encourage environmental risk screening, as they directly improve loan quality and performance. Stronger compliance and supervision mechanisms will ensure that monitoring and reporting translate into better perceived lending outcomes.</p>