| dc.description.abstract | Various
profit making firm and institutions would s
eek the investment that have lower
risk and uncertainties wit
h a large magnitude of returns. In Kenya, f
inancial
institutions encounter major risks in rendering their services.
The study adopted
descriptive research design. In seeking to establish the
effe
cts of financial innovations
on credit risk management of commercial
banks in K
enya
, t
his study utilised the
population
of which
comprises of 43 Commercial banks in Kenya.
This study sought
to collect secondary data for the period between 2003
-
2013. The d
ata
was
collected
from the relevant documentations and official records like the Financial Products
Report and the Risk Manuals of the selected commercial banks. The measure for
credit risk management
was
Non
-
Performing Loans Ratio (NPLR).
The data collect
ed
from the annual reports of the banks was analyzed using multiple regression analysis
.
The regression output
was
obtained using Statistical Package for Social Sciences
(SPSS version 18). In this study, multiple regression model with three ind
ependent
var
iables.
Financial innovation
was
measured and quan
tified in term of its variables.
F
indings revealed that
financial
innovations h
ave
a positive effect
on credit risk
management of commercial banks
. Among the bank financial
innovations:
institution,
produc
t and process
innovations. This finding is supported by the coefficient of
determination which shows that the
40.4% of the
variations in bank
nonperforming
loan ratio
are explained by bank
s’ financial
innovations. The influence of bank
financial
innovation
s on income are also statistically significant
(p < .001)
hence
justifies the aforementioned relationship
. This means that
the influence is not by
chance | en_US |
