Challenges of internationalization of banking operations by Kenya commercial bank limited
Abstract
ternational trade has propelled the development of banks within the international financial
system. Therefore, the banking activities are increasingly becoming international. However,
internationalization of bank operations in Kenya and globally has been facing various
challenges. This study therefore sought to determine the challenges involved in the
internationalization process of banking operations by KCB. This research study used a case
study design as it only focused on Kenya Commercial Bank. The study used both primary and
secondary data. In the collection of primary data the study used interview guides. The interview
guide was administered to 3 international business managers and 3 operations managers from
KBC branches in Moi Avenue, Tom Mboya and Biashara Street. The secondary data was
collected from various sources like journals, internet, textbooks, and magazines and paper
presentations at conferences. The validity of the research instruments was established by
seeking opinions of experts in the field of study especially the supervisors. Since data that was
obtained in this study was qualitative, content analysis was used in the analysis. Data was then
presented in a prose form. The study established that the challenges that Kenya Commercial
Bank was facing include market risk as a results of stiff competition, poor information
communication technology, poor infrastructure, international fraud, legal challenges, liability to
foreignness, transparency and corruption, state of local economy, stability of currency, financial
resources, inflation level, taxation level, entry mode, timing of entry, language, religious belief,
organizational changes, availability of skilled labor, involvement of labor unions, employment
regulations and nature of legal system and laws. This study concludes that the most common
challenges facing Kenya Commercial Bank in its internationalization of operations can be
categorized into market challenges, political challenges, legal challenges, economic challenges,
geographical challenges internal challenges and cultural challenges. This study therefore
recommends that commercial banks should fully comply with the requirements of the host
country and engage with the regulators and other public bodies regularly. The study
recommends that managers of commercial banks be enlightened on the opportunities that exist
in untapped and prospective global markets for profit growth and satisfaction purposes. Further,
Through experience, research and statistics international commercial banks should evaluate
critically the market conditions to avoid being trapped in unfavorable market.
Publisher
University of Nairobi