An Analysis of Financial Innovations in the Kenyan Banking Sector
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Date
2010Author
Kinuthia, Beatrice W
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The business environment has changed and it has been characterized by stiff
competition among the players and the banking industry in Kenya is no exception.
Competition amongst the commercial banks has pushed the banks towards becoming
more innovative. This study therefore sought o carry out an analysis of financial
innovation in the Kenyan banking sector.
The objectives of the study were to analyze financial innovations in the Kenyan
banking sector and to determine the motivations, benefits and challenges of financial
innovations in the Kenyan banking sector. This was a census survey of financial
innovation in the Kenyan banking sector, motivation, benefits and challenges of the
innovations in the last 15 years. The study used primary data collected by use of a
questionnaire designed and administered through “drop and pick technique”
The findings of the study indicated that most of the large and medium sized banks
innovated regularly while small sized banks were split between innovating regularly
and on rare occasions. In terms of ownership, banks with government participation
were lead in terms of innovating regularly followed by privately owned domestic
banks, then foreign public owned banks while foreign owned, private banks were on
the bottom of the list in terms of innovating regularly. In terms of length of operation,
those that been operating in Kenya for 5 to 15 years 100% of them undertook financial
innovation regularly.
Most of the innovations were introduced in the period 2006-2009. These include
ATMS, SMS banking, internet banking, youth oriented accounts, women oriented
banking and children accounts. There are a number of products that had yet to be
introduced by many banks, these include, credit cards, risk management, and agent
banking.
Improved customer service and increase in bank revenue were the benefits that most
of the respondents were in agreement with, brought about by financial innovation.
There are various challenges that banks faced in adoption of financial innovation. On
top of that list is introduction of similar products by competitors and customers poor
response to innovative products.
Publisher
University of Nairobi
Subject
financial innovationsRights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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