Determinants of occupational fraud in commercial banks in Kenya

Abstract

Kenya has the highest occupational fraud incidences in the world. The incidence of occupational fraud is 66%, nearly twice the global average of 34% and above the average occupational fraud incidence in Africa of 57% (PwC, 2011). The main objective of the study was to assess the determinants affecting occupational fraud in commercial banks in Kenya. The study adopted a descriptive survey design. The population of this study was all the commercial banks in Kenya. There are forty three commercial banks in Kenya and this is the group from which the sample was drawn. Simple random sampling method was used where the researcher will sample 1 top manager, 2 middle level managers and 3 low level management staff from each institution – giving the study a sample population of 258 respondents from the target population. The researcher developed the instruments with which to collect the necessary information. Questionnaires were used to obtain important information about the population. The research was carried out using primary and secondary data. The study concludes that given the right pressure, opportunities, and rationalizations, every employee is capable of committing fraud; and that characteristics of bank employees affect occupational fraud to a low extent; The study recommends the organizations to train their employees to adopt a right attitude and work towards stress management to minimize occupational fraud. They should also have a self drive to perform, avoid overspending, and also do away with desire for gain to minimize occupational fraud. They should put in place a system to deal with staff grievances as this will to a great extent minimize occupational fraud. The study also discourages closeness of customers to bank employees as it has been reported to lead to operational fraud to a moderate extent.