Effects of Corporate Social Responsibility on Profitability of Commercial Banks in Kenya

Abstract

The changing business and societal environment promotes the adoption of business and company processes that place importance on the social and economic growth of the communities within the operational area of the businesses. The current study sought to find out the effect of corporate social responsibility on performance of commercial banks in Kenya. The research adopted a descriptive survey design which was essential in achieving the objectives of the study. The study’s population comprised of Kenyan commercial banks for the period 2013 -2017. Given the small size of the population, a census approach was adopted. The study relied entirely on secondary data. The statistical package for social sciences (SPSS) version 22 was used to analyze the data. The study demonstrates that all commercial banks in Kenya stand to benefit from being socially responsible. It is to the advantage of commercial banks in Kenya to consider creating a department for CSR. The number of environmental CSR activities and the number of health CSR activities were found to have a high significance on financial performance of commercial banks while liquidity was found to have a very weak significance on performance of commercial banks.