BBSE Research Projects (2018)

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Browsing BBSE Research Projects (2018) by Subject "Banking"

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    Effects of mobile money transactions on private savings ratio in Kenya from 2007 to 2017
    (Strathmore University, 2018) Kagondu, Yvonne Wanjiru
    Mobile money has received a lot of attention since the successful introduction of Mpesa in Kenya in 2007. Many economies in Africa have adopted the technology and it has evidently altered the lives and behaviors of those who use it and subsequently, respective economies. This has been attributed to the ease of access of financial services through the technology. Private savings, one of the variables that the innovation has directly and indirectly affected, is a key financial and economic aspect for micro and macroeconomic stabilization in developing countries. Despite this, recent findings have shown that savings in Kenya have perpetually been on the decline as compared to other regions. Most studies have approached the topic of mobile money and savings on a financial inclusion to the previously unbanked basis but have failed to take account of post-adoption saving responses of users of the technology, which this study aims to consider in a macroeconomic perspective. This study uses co-integration analysis to identify the long run relationship between mobile money transactions and private savings relative to GDP in Kenya from 2007 to 2017. The findings of this study are presence of a long run relationship but the nature of the relationship being inconclusive. This implies that the technology may have affected private savings ratio positively due to the increased financial inclusion but may have also had a negative effect due to the increase of fast access of financial services due to the technology.
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    Impact of private sector credit on economic growth in the East African Community
    (Strathmore University, 2018) Okoth, Mercy Anyango
    The levels of credit extended to the private sector by banks is considered as an important factor when measuring the extent of financial development of a country. Credit extended to the private sector by banks is considered more efficient approach to support the development of economies compared to extension of credit to the public sector. In countries where the government through the public sector dominates in terms of receipt of credit, the private sector experiences challenges funding its investments though credit. In this study, vector error correction model has been applied, on annual panel data from 1988 to 2015 to investigate the relationship between credit extended to the private sector by commercial banks and economic growth in the EAC member states. This study focused only on Kenya, Uganda and Tanzania due to data availability. Other control variables used were; government expenditure, inflation and interest rates. The results show that bank credit to the private sector has a positive impact on the economic growth in the EAC in the long run. Interest rates, inflation and government expenditure also have a significant impact of the gross domestic product of Kenya, Uganda and Tanzania. The EAC member countries have implemented reforms aiming to achieve macroeconomic convergence before the on-coming East African Monetary Union, thus the expected empirical results show that policy makers in the EAC should focus on long run policies to promote economic growth such as innovations in the banking and financial markets in order to increase the private sector credit and maximize on the benefits of regional integration.