Determinants of growth of Kenya Commercial Banks in Kakamega Central sub-county, Kenya
Abstract
This research investigated some of the key determinants of commercial banks' growth in
Kakamega central Sub-County. The following study objectives guided the study: to examine
how macroeconomic factors influence the growth of Kenya Commercial Banks in Kakamega
Central Sub-County; to establish how capital adequacy influence the growth of Kenya
Commercial Banks in Kakamega Central Sub-County; to determine how asset quality
influence the growth of Kenya Commercial Banks in Kakamega Central Sub-County and to
establish the influence of management efficiency on the growth of Kenya Commercial Banks
in Kakamega Central Sub-County. Conceptual framework guided the study illustrating how
the various variables were interrelated. The study adopted a descriptive survey design. The
target population consisted of 10 commercial banks, 10 supervisors, 10 branch managers and
225 employees. Simple random sampling techniques was used to select 68 employees while
purposive sampling technique was used to select supervisors, human resource managers and
branch managers. Data was collected by use of questionnaires and interview schedules.
Validity was checked during piloting to ensure all the items in the main study were
functioning. Moreover, to ensure validity of the instruments, content validity was established
Pilot testing process was used to test reliability comparing with a Cronbach's Alpha
Coefficient of which yielded an alpha of 0.84. The following were the study findings: The
study findings indicated that there was therefore, a marginal weak association between
macroeconomic factors and growth of Kenya Commercial Banks. Therefore, addressing
factors like return on equity, return on asset, net interest margin and number of employees
adequately could lead to enhanced growth of Kenya Commercial Banks. Correlational results
between capital adequacy and the growth of Kenya Commercial Banks had a weak positive
association; an indication that increases in capital adequacy could improve the growth of
commercial banks. Capital adequacy had a marginally weak but positive association on the
growth of Kenya Commercial Banks. There was a weak positive relationship between
management efficiency and growth of Kenya Commercial Banks in Kakamega Central Sub-
County. The following recommendations were made based on the findings and the
conclusions of the study: The government should ensure that the interest rates suggested by
the Central Bank of Kenya are adopted by both commercial banks and micro financial
institutions so as to encourage the business owners to access micro credit facilities. There
should be clear loaning policies to avoid misunderstanding on expectations on repayment
period and the interest rate on the borrowed loan should be subsidized by the lending
institutions. The government should reduce the tax rate for Kenya Commercial Banks. The
researcher then analysed the data and presented the results in form of frequency tables. The
findings of this study may be useful to the Ministries Trade, academicians and researchers in
their improvement of pol icies and practices on Kenya Commercial Banks
Citation
Master Of Arts In Project Planning And ManagementPublisher
University of Nairobi
Collections
- Faculty of Education (FEd) [5964]