Challenges of Implementing Corporate Social Responsibility Strategies by Commercial Banks in Kenya

Abstract

The study sought to determine the challenges faced by commercial banks in Kenya in implementing corporate social responsibility strategies. The objectives of the study were; to establish the challenges commercial banks in Kenya face in the implementation of CSR strategies; and to determine how commercial banks in Kenya counter the challenges they face in implementation of CSR strategies. The research design was descriptive survey design. The population was 43 commercial banks in Kenya. Study was a census that is all the 43 duly licensed and operational commercial banking institutions within the country were used. The data collection instrument was a questionnaire. The data analysis method was quantitative in nature. Descriptive statistics was used. The particular descriptive statistics used were means scores and percentages. The software for analysis was SPSS Version 20. Results indicated that a the macro-environment challenges affecting the implementation of corporate social responsibility strategies by commercial banks were overwhelming poverty, culture of a community and high tax rates. Results also indicated that the industry specific challenges affecting the implementation of corporate social responsibility strategies by commercial banks were: ability of customers to bargain for particular CSR projects and bargaining power of suppliers. Results also indicated that the other challenges affecting the implementation of corporate social responsibility strategies by commercial banks were incompetent human resources and lack of clear guidelines in the bank. The study concluded that challenges affecting the implementation of CSR strategies by commercial banks could be classified into three broad groups which include macro-environment challenges, industry specific challenges and other challenges. It was concluded that among the strategies to counter the macro economic challenges they face in implementation of corporate social responsibility strategies were: community participation strategy before CSR implementation and that the bank understands the culture of a community. The strategies to counter the industry specific challenges they face in implementation of corporate social responsibility strategies were: that the bank ensures it has structures and the budgets on CSR are made to facilitate effective resource allocation. The strategies to counter the industry specific challenges they face in implementation of corporate social responsibility strategies were: high clientele participation which provides diversity of ideas in CSR implementation and market analysis on the CSR project. Recommendations are that that in order to tackle the challenges faced by commercial banks in Kenya in implementing corporate social responsibility strategies then, the banks should ensure community participation before CSR implementation and the banks should understand the culture of a community. Bank should also ensure that it has structures on CSR implementation and the budgets on CSR should be made to facilitate effective resource allocation. Banks should carry out thorough market analysis on the CSR project. For effective implementation of CSR the government should tackle the problem of overwhelming poverty and high tax rates. The banks should employ competent human resources and give clear guidelines of CSR implementation.