MDF Theses and Dissertations

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Browsing MDF Theses and Dissertations by Subject "Commercial banks_Kenya"

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    Effects of prudential regulations on the financial stability of commercial banks in Kenya
    (Strathmore University, 2022) Osolo, James
    Prudential regulation helps commercial banks to operate within a given framework so that their financial stability is not compromised through exposure to certain risks during operation. The goals of prudential regulation are thus considered as validation for financial system. Therefore, the current study sets to investigate the effects of prudential regulation on banking stability of commercial banks in Kenya. The specific objectives include; to determine how capital adequacy requirements, asset quality requirement ratio, and liquidity requirements ratio affect the stability of commercial banks in Kenya. The study used descriptive research design and the target population was all the 43 commercial banks in Kenya. The study used stratified random sampling technique to sample manageable commercial banks. Secondary data was collected from the websites of all the sampled banks. The secondary data covered a period of 21 (2000-2020). Data was analyzed using descriptive statistics and linear regression analysis. The study also used diagnostic tests to determine the reliability of the regression model. This study contributes to the literature knowledge gap in the same field. Thus, it will be a point of reference for future researches and academics hence they will be able to refer to the findings of this study and bridge the possible literature gaps that could have emanated from this research. The study found that, asset quality, capital adequacy, and liquidity requirements had positive relationship with financial stability of banks in Kenya. The study concluded that an increase in capital adequacy, asset quality and liquidity requirement regulations increased financial stability of the commercial banks. The study recommends that commercial banks’ management should increase their capacity in loan administration and that they should also establish clear lending guidelines. Additionally, the banks should ensure that the loan terms and conditions are conformed to during approval to reduce the chances of nonperforming loans that could subsequently affect conformity to asset quality requirement. The research also recommended that it is important for the commercial banks to be conscious of its liquidity position in different product and service segments.
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    Influence of interest rates determinants on the quality of credit portfolio offered by commercial banks in Kenya
    (Strathmore University, 2020) Ombito, Brian Chitala
    The quality of credit portfolio influences the ability of commercial banks to lend to its customers in a sustainable manner. While managing the quality of credit portfolio for commercial banks remains a challenge, the issuing of loans and advances is critical to most commercial banks’ performance around the globe. Interest rates determinants affect the quality of credit portfolio offered by commercial banks. The main objective of this study is to analyse the influence of interest rates determinants on the quality of credit portfolio offered by commercial banks in Kenya. The study sought to answer the questions on whether interest rates determinants of total savings, cost of savings, operational costs and capital adequacy influence the quality of credit portfolio offered by commercial banks in Kenya. The study was guided by the Loanable fund’s theory, Keynes liquidity theory and Classical theory of interest. The positivist research philosophy was used for this study and a causal research design is adopted. Quantitative data was extracted from the financial statements of commercial banks for the period ranging from 2009 to 2018 with the population covering 40 commercial banks. The data was analysed using descriptive and inferential statistics which included mean, standard deviation, regression analysis. The findings of the study indicate that interest rates determinants of total of savings, cost of savings, capital adequacy and operational costs have a significant influence on quality of credit portfolio offered by commercial banks in Kenya. The study found out that among the interest rates determinants, capital adequacy had the greatest effect on the quality of credit portfolio offered by commercial banks in Kenya, followed by total savings then operational costs while cost of savings had the least effect to the quality of credit portfolio offered by commercial banks in Kenya. The study recommends that the government, through the Central Bank of Kenya should be instrumental in developing policies and regulations to guide commercial banks in setting up of optimal interest rate spreads in order to promote loan uptake as well as improve performance of these commercial banks. Increased loan uptake will lead to growth in the economy of the country. The study recommended banks should increase the amount of core capital since measure of capital adequacy showed that banks with high capital adequacy ratios perform better financially.