The Relationship Between Risk Management Practices And Financial Distress Among Commercial Banks In Kenya

Abstract

The reason for the study was to decide the relationship between hazard administration hones and monetary misery in business banks in Kenya. The study was an expressive review concentrate on and used auxiliary information on budgetary execution from the 43 Commercial banks in Kenya with the time of study being the year 2015. The information was investigated by utilizing enlightening measurements and also inferential insights. Enlightening insights was valuable for thinking of a comprehension of the information and in this manner helped in sorting out and compressing of the information while inferential measurements was to help in making of substantial conclusions from the information. Connection and relapse examination was utilized as a part of request to discover the level of relationship and consequently help in satisfying the motivation behind the study. The study set up that there is a solid relationship between budgetary trouble and hazard management practices. This implies that financial distress of commercial banks is highly influenced by risk management practices. These practices account for 18.5% of the changes in financial distress. The study further concludes that credit risk and interest rate risk have a positive effect on financial distress while capital risk and liquidity risk have a negative effect of financial distress.