Location Decisions Among Commercial Banks in Kenya
Abstract
Much of the previous research into the factors that influences the choice of location among
commercial banks mechanism has concentrated generally on developed countries. Not much
known local study has focused on the factors that influences the choice of location among
commercial banks in Kenya. This study therefore sought to fill the existing research gap by
carrying out a survey study on the factors that influences the choice of location among
commercial banks in Kenya. The main purpose of the study was to investigate into the factors
that influences the choice of location among commercial banks in Kenya and determining the
models used in location decision among commercial banks in Kenya. This research was
conducted through a survey study among commercial banks in Kenya. The target population of
this study were the managerial staff working among these commercial banks in Kenya. The
study focused particularly on the departmental heads. This paper utilized a questionnaire as used
in various previous research projects.
This study collected both quantitative and qualitative data. The response received was analyzed
descriptively. From the findings, the study established from the majority of respondents that the
various influences the choice of location among commercial banks in Kenya and are better
adhered to for performance to be effective in a very great extent. The survey sought to establish
the factors that influenced the bank’s on its facilities location decision. The main factors that
influenced the banks on its facilities location decision were; total cost factors, proximity to
customers, business climate, infrastructure, and competitive advantage. The study further
established that the following factors to less extent influence the bank’s on its facilities location
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decision; quality of labor, suppliers, free trade zones, trading blocs, and environmental
regulation.
The survey established that cost of land and cost of construction to a great extent influence
location decision. Commercial banks consider distance and access to service to great extent. The
study further found that business climate is mainly determined by other banks. The commercial
banks put into consideration of highly industrial concentration, existence of reliability utilities,
and availability of parking area and existence of modes to transportations when they are making
location decision. Finally commercial banks consider distance of the other banks and service
offered by the other banks when they their facilities location decision.