Operations Strategy Decisions and Financial Inclusion by Commercial Banks in Kenya
Abstract
Financial institutions are the catalyst in the economic growth and progress in the
modern era. In this respect, there is a rapid thrust for financial inclusion, more so in
emerging economies, such as Kenya. The objectives of the study were: To determine
operations strategy used by Commercial Banks in Kenya; to establish the extent of
financial inclusion in Kenya: to determine the relationship between operations
strategy and the extent of financial inclusion by commercial banks in Kenya. All the
44 licensed commercial banks that are recognized by Central Bank of Kenya were
involved in this study (Central Bank of Kenya annual report, 2012). Data was
collected from primary and secondary sources. The primary source was done using
questionnaires; semi structured questionnaire that has both open and closed ended
questions were used. Descriptive statistics were used; data was entered into SPSS and
presented in percentages, proportions and frequency distribution. Qualitative data was
checked and edited for completeness, uniformity, consistency and accuracy through
Content analysis. The study concluded that the failure of formal banks to be inclusive
is due to the high capital investments required, lack of FI strategic plans within the
banks, high illiteracy level amongst the targeted population, the regulations governing
the banking system in Kenya is not congruent with FI as CBK is yet to come up with
favourable steps and implement it. and under developed technology to support FI.
Based on the findings, the study recommended that policymakers should work with
market participants to eliminate barriers and identify gaps in the institutional
infrastructure relevant to small-scale supply. This includes ensuring that payments
and collateral systems and hard infrastructure elements for retail transactions are
available and have a low unit cost. In particular, collateral and information
infrastructures need modern supportive legislation and regulations. The state has a
central role in ensuring the availability and maintenance of much of this
infrastructure. While some permanent element of subsidy can in some cases be
necessary to foster access. the design of subsidies should, where possible, be timebound
and aimed at making institutions and access self-financing and sustainable. The
taxation of financial services should be access-friendly.
Citation
Amollo, Frank Omondi (2013). Operations Strategy Decisions And Financial Inclusion By Commercial Banks In Kenya. Master Of Business AdministrationPublisher
University of Nairobi