Diversification and competition among commercial banks in Kenya
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Date
2016-09Author
Achiro, Ochieng D
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Kenya’s banking industry has experienced drastic changes in the last few decades.
This has led to stiff competition, as the fight for customers seems to be never-ending
war. Commercial banks as a result use diversification to gain competitive advantage.
With the liberalization of the economy, players in the banking industry have been
facing fierce competition. The objective of this study was establish the relationship
between Diversification and Competition among commercial banks in Kenya. This
study used cross sectional descriptive research survey. The target population was
commercial banks in Kenya. The study used primary data collected using
questionnaires administered through drop and pick later method. Quantitative data
collected was analyzed using descriptive statistics. Statistical Package for Social
Sciences (SPSS V. 21.0) was used for data analysis. The study findings established
that diversification have a strong correlation with competition among commercial
banks in Kenya as indicated by Pearson correlation of 0.921. Among the key areas
that diversification had focused on include; mobile and internet banking, provision of
treasury and trade finance, investment portfolio, provision of forex exchange, custody
services, agency banking, provision of selection lending services and investment
banking. The consequences of such diversification was increased competition
amongst commercial banks. The study revealed that as result of diversification,
competition among commercial banks has been heightened to a very great extent
especially on customer deposits, profit margins and customer value. The researcher
recommends to the policy makers to enact policies that regulate diversification being
undertaken in the banking industry. Further, strategic planning managers should
enhance diversification in areas that have less diversification such as insurance
services. For further studies, the researcher recommends for investigation into how
diversification into different area at different times affects competition among
commercial banks in Kenya
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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