Effect of Corporate Social responsibility on loan performance in commercial banks in Kenya
| dc.contributor.author | Cheruiyot, S. | |
| dc.date.accessioned | 2025-04-15T12:01:23Z | |
| dc.date.available | 2025-04-15T12:01:23Z | |
| dc.date.issued | 2024 | |
| dc.description | Full - text thesis | |
| dc.description.abstract | Businesses do not exist in a vacuum. They exist in a society from where they derive their benefits and to where they should extend a lending hand. Corporate social responsibility is a way of giving back to the society by businesses. In doing so, the businesses end up gaining by having favorable public perception thus increasing their overall financial performance. In Kenya, the interdependency is particularly pronounced in the Banking sector as most commercial banks have not been left behind in participating in CSR activities. Commercial banks in particular have come up with community-based programs targeting health, education and general welfare. Given that the main source of income for commercial banks is through interest paid in by borrowers for credit facilities extended, it was interesting to ascertain whether engaging in CSR activities would influence loan performance in commercial banks. The outcome of the previous studies on the influence of CSR on loan performance of commercial banks remains inconclusive. Therefore, the purpose of the study was to investigate the effect of CSR on loan performance of commercial banks in Kenya. The specific objectives were to determine the effects of philanthropic CSR, environmental CSR, economic CSR and ethical CSR on loan performance in commercial banks in Kenya. The study was grounded on the stakeholder theory and the Signaling theory and adopted the correlation design. The population of the study consisted of middle and senior level employees from thirty branches of ten purposively selected commercial banks in Nairobi City County. A sample of ninety respondents was selected using the purposive sampling techniques. The data was collected using closed-ended questionnaires. The data was analyzed using both the descriptive and inferential statistics with the aid of the SPSS. Descriptive statistics included frequencies, percentages, means and standard deviations, while the inferential statistical measures included the Pearson correlations and (simple) linear regressions. The results were presented in tables, charts and graphs. The results revealed that loan performance in commercial banks in Nairobi City County was influenced by philanthropic CSR, environmental CSR, economic CSR and ethical CSR. The study concluded that commercial banks must focus on supporting charitable programs targeting the less fortunate members of the society in order to improve their loan performance. They must also support sustainable environmental initiatives, engage in fair contracts and carry out ethical business practices in order to enhance their loan performance portfolio. The study recommended that commercial banks should continue to engage in corporate social responsibilities by investing more in philanthropic activities and environmental programs aligned to their goal. They should also engage in economic activities that meet their financial goals and ensure that all their financial activities are carried out in an ethical manner to influence loan performance. However, the study was limited to commercial banks in Kenya and the conclusions drawn may not relate to non-commercial banks. | |
| dc.identifier.uri | http://hdl.handle.net/11071/15676 | |
| dc.language.iso | en | |
| dc.publisher | Strathmore University | |
| dc.title | Effect of Corporate Social responsibility on loan performance in commercial banks in Kenya | |
| dc.type | Thesis |