School of Business
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Item Effect Of Banking Regulations On Commercial Banks’ Credit Availability In Kenya(KCA University, 2017) Omondi, Paul O.Banks perform various functions and one of these functions is the bank credit. Bank credit is very vital because it provides funding for various sectors in the economy hence contributing to the development of the economy. This study aimed at determining the effect of banking regulations on commercial banks credit availability in Kenya. To investigate the effect of capital requirement regulation on credit availability by commercial banks in Kenya, to examine the effect of interest rate regulation on credit availability by commercial banks in Kenya and to determine the effect of liquidity regulation ratio on credit availability by commercial banks in Kenya. The following theories provided guidance to the study; agency theory, signalling theory and financial information theory. Under this study descriptive research design was adopted in analysing the effect of banking regulations on commercial banks credit availability in Kenya. Descriptive research acts as a forerunner to quantitative research designs with the general provision on some guidelines on the variables that need to be tested quantitatively. The target population were all the 43 commercial banks that have been operating in Kenya for the last 5 years that is from 2012 to 2016 as provided in the CBK list of 2016. The study used census method of sampling and sampled all 43 commercial banks in Kenya. A census provides a study of the whole population and it’s sometimes referred to as absolute enumeration or absolute count. In the current study, published literature and financial reports formed secondary source of data collection for capital requirement, interest rates, liquidity and credit availability of commercial banks in Kenya for the study period, 2012 to 2016. Descriptive statistics was used in the analysis of the data collected. The use of descriptive statistics helped in data presentation and organization. The techniques include use of tabulation, diagrams and graphs; the quantitative data was analysed using the SPSS software. Based on the results, the study revealed that increasing capital regulation results to a positive increase in credit availability, thus the study concludes that capital requirement regulation had positive influence on credit availability by commercial banks in Kenya. On interest rate, the study found that interest rate regulation have positive influence on credit availability by commercial banks in Kenya. The research revealed a strong positive correlation between liquidity regulation and credit availability. The study noted that enforcing liquidity regulation ratio can lead to credit availability by commercial banks in Kenya; hence the study infers that standard liquidity regulation ratio has positive influence on credit availability by commercial banks in Kenya. The study recommends that reforms on the capital regulation should be strengthened to encourage more enhanced competition within the banking industry with an aim of boosting credit availability. On the other hand, it is advisable for the policymakers and the Government to draw better interest rate policies that will enhance the performance of commercial Banks in Kenya.Item Effect Of Islamic Finance On Performance Of Commercial Banks In Kenya(Kca University, 2020) Akongo, Fredrick O.The main aim of this study was to establish the effect of Islamic finance on the performance of commercial banks in Kenya. The study was guided by three specific objectives which are to; establish the effect of Mudaraba loans on commercial banks’ financial performance in Kenya, assess the effect of Ijara products on commercial banks’ financial performance in Kenya and assess the effect of Murabaha contracts on commercial banks’ financial performance in Kenya. This study used a descriptive research design. The study was undertaken in the two completely established Islamic commercial banks in Kenya as well as the 5 conservative banks offering partial Islamic commercial banking. Secondary data was used for this study. This means that the data used was quantitative in nature. The researcher used financial performance data for the years 2015-2019. Descriptive statistics was utilized to organize Data. To scrutinize the data, descriptive analysis such as standard deviation, frequencies, mean, as well as percentages were utilized. Additionally, Pearson correlation as well as multiple regressions which are inferential statistics were utilized. So as to come up with a reliable model for this survey the researcher carried out appropriate diagnostic tests. The study established that Murabaha is the most common Islamic finance products though the Ijara was also significant. The findings also showed strong positive relationship between Murabaha and bank performance. From the study findings it was evident that there was a positive effect of Ijara on bank performance. Mudaraba had a positive insignificant effect on bank performance. Based on the findings, the study concluded that the Islamic finance affected bank performance with some having a positive significant effect and others insignificant effect. The study recommended that commercial banks in Kenya should sensitize its customers on the need to promote partnership through financing business ideas. Also, among the most recommended measures put in place is by selecting key financial and other indicators to monitor programs based on the statutory requirements on Islamic banking products. Developing systems for managing future performance based on the statutory requirements are also highly recommended.Item Relationship Between Asset Structure And Financial Performance Of Commercial Banks In Kenya(KCA University, 2019) Wandai, James M.Commercial banks are very important components of any economy globally. When the bank management are making decision must bear in mind the effect that the decision will have on the financial performance of the bank. A proper asset allocation and distribution should be undertaken to ensure optimum and efficient utilization of these assets. Efficient utilization of assets translates to high income to the banks. This study sought to determine the relationship that commercial banks assets structure have on the on their financial performance in Kenya. The study had sought to attain the following specific objectives; examine the relationship of investments in government securities, loans to customers and investment in fixed assets on financial performance of commercial banks in Kenya. The theory is based on balance portfolio theory, efficient structure hypothesis and the black litter man theory. Descriptive study design was applied in this study. The population target for this study is 42 commercial banks in Kenya and after census, the result of the study covered 32 commercial banks. The study used secondary data from each banks published financial statements. The study applied descriptive statistics analysis, correlation statistical analysis and regression statistical analysis to analyze the balanced panel data collected during the period 2008 to 2017. STATA was used to conduct the analysis. Results were presented in graphs and tables. The study used random effect model which was found to be appropriate after carrying out Hausman test. Various diagnostic test were done for the study. From the study, correlation analysis results showed that loans to customer had a positive relationship with financial performance with a coefficient estimate of .0631. There was negative relationship between investment in government securities and fixed assets as correlation results gave coefficient estimates of -.443 and -.0238 respectively. Various diagnostic tests were carried out including multicollinearity test, autocorrelation, stationarity test and heteroscedasticity. The regression model indicated that 18.56% of financial performance of commercial banks in Kenya is explained by the variables in the study leaving 81.44% as unexplained. The study findings indicated an intercept of .62 for the period under review which meant that the performance of commercial banks holding all other factors constant, that is, loans to customers, investments in government securities and fixed assets at zero, was .62 units. The results found coefficients of the variables where loans to customer had .28, investment in government securities had -.28 and the fixed asset had a coefficient of -.89. The study found significant relationship between investment in government securities and fixed assets and the commercial banks financial performance while the relationship with loans to customers were inconclusive. The study recommends that managers and decision makers in banking industry should ensure the assets are properly distributed and efficiently utilized to ensure they generate revenue to the banks.