The Relationship Between Credit Risk Management Practices and Liquidity Ratio of Commercial Banks in Kenya
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Date
2016Author
Odhiambo, Andrew O
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The purpose of the study was to determine the relationship between credit risk
management practices and liquidity ratio of commercial banks in Kenya. The study
was a descriptive survey study and utilized secondary data on financial performance
from the 43 Commercial banks in Kenya during 2015 year of study. Two types of
analysis were used for data analysis i.e. descriptive and inferential statistics.
Descriptive statistics was useful for coming up with an understanding of the data and
thus helped in organizing and summarizing of the data while inferential statistics was
to help in making of valid conclusions from the data. Correlation and regression
analysis was used in order to find the degree of relationship and thus help in fulfilling
the purpose of the study. The study findings indicate that risk management practices
are significant in influencing liquidity ratio of banks as indicated by the Regression
analysis relationship coefficients. This implies that the risk management practices are
relied upon to make conclusions about the liquidity ratio of commercial banks as
shown by their strong positive relationship. The study found out that of risk
management practices is positively related to Liquidity ratio of Commercial banks in
Kenya .implying that better management of risk increases liquidity ratio. The
independent variables that were studied explain a substantial 15% of liquidity ratio of
Commercial banks in Kenya as adjusted R2 (0.15) represented. Therefore, while 15%
of liquidity ratio was contributed by the independent variables of Kenya‟s commercial
bank while 85% of the liquidity ratio was contributed by the unstudied factors and
random variations of Commercial Banks of 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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