Browsing by Author "Musau, Salome Mwongeli"

Now showing 1 - 2 of 2
  • Thumbnail Image
    Item
    An analysis of the utilization of agency banking on performance of selected banks in Nairobi county, Kenya
    (2013-08-29) Musau, Salome Mwongeli
    Agency banking roll-out in Kenya was meant to address the low financial inclusion in Kenya. As per the 2009 National financial access survey, 32% Kenya‟s bankable population is still totally out of the financial services orbit. Difficulties in accessing financial services main drivers are; long distance to banking channels and relative high costs of accessing financial services. In a bid to bridge the financial access divide and improve its access among the most vulnerable sections of the society, the Kenya government through the central bank amended the finance Act 2009 to facilitate use of third parties by banks to provide banking services. Agency banking has proved to be a cost saving network as compared to the physical brick and mortal banking branches. Keen to take the agency banking advantages, Kenyan financial institutions since 2010 have embarked on an aggressive entry into this segment. However, how Kenyan banks have utilized agency banking on their performance is not known. The purpose of this study was to assess the utilization of agency banking on the performance of Kenyan banks. The specific objectives of the study were; to assess how policies and procedures governing agency banking affects the banks performance, determine the effects of agency costs on the banks performance, to assess how agency liquidity problems affect banks performance as well as the security risks involved in agency banking. The study adopted a descriptive research design .The study targeted banks that offer agency banking services in Kenya. The number of banks offering agency banking were four. The population of the study was forty branch managers of selected branches in Nairobi. Both quantitative and qualitative data was collected by use of questionnaire with both open and closed ended questions. Data was analysed and presented using descriptive statistical tools including frequencies, percentages, mean and standard deviation. In addition, advanced statistical technique (inferential statistics) was also used. SPSS (Statistical package for social sciences) model was also used in data analysis. The generated results were presented through tabulations, charts and graphs. Content analysis was used to analyse qualitative data obtained from open ended questions. The results were presented in a continuous prose form. The study showed that liquidity availability in the outlets affected banks performance in addition to leading to frustrated customers. The study also found out that some of the agency regulations included board of directors and executive management, accountability and quality control. The study also found out that agency infrastructure cost and security was a major influence to banks performance. The study therefore recommends that, banks should give more attention to security and find better ways of vetting their agents to ensure that large cash transaction are handled effectively. The study also recommends that agents should be more financially included to handle many transactions, like converting cheques into cash, deal with foreign currency exchange among others.
  • Thumbnail Image
    Item
    Financial inclusion and stability of commercial banks in Kenya
    (Kenyatta University, 2018-07) Musau, Salome Mwongeli
    Commercial banks remain the dominant channel of financial intermediation in emerging market economies such as Kenya. After the global financial crisis of 2007-2009, policy makers, regulators and financial institutions heavily invested in reforms aimed at improving financial stability. At the same time, there has been global commitment to promoting greater financial inclusion. Consequently, commercial banks have addressed financial inclusion by designing new services and products targeting unbankable customers. However, despite these initiatives, some commercial banks have incurred stability related challenges in Kenya and thus some were put under receivership and others closed. It is therefore, important for financial institutions to understand the interlinkages in advancing financial inclusion and financial stability. Therefore, this study set out to establish the effect of bank availability, bank accessibility and bank usage on stability of commercial banks in Kenya. The study further sought to determine the moderating effect of bank operating environment, and establish the mediating effect of bank competitiveness on the relationship between financial inclusion and financial stability of commercial banks in Kenya. The study was anchored on financial intermediation theory supported by finance growth theory, asymmetry information theory and competitive-stability theory. Positivism philosophy, longitudinal and explanatory non–experimental research designs were used. The target population was all the 43 commercial banks in Kenya. The study used secondary data collected from annual reports of the Central Bank of Kenya (CBK); commercial banks audited published financial statements and annual data from the Kenta National Bureau of Statistics (KNBS) for the period between2007 and 2015. Data was analyzed using descriptive statistics and panel multiple regression analysis. The results indicated that bank availability had a statistically significant effect on bank stability. Bank accessibility also had a significant effect on bank stability. However, it was found to have insignificant effect on liquidity risk. In addition, bank usage was also found to have a significant effect on bank stability. On operating environment, inflation rate was found to moderate the relationship between financial inclusion and bank stability. The Gross Domestic Product growth rate moderated the relationship between financial inclusion and bank stability. Nevertheless, there was no moderation effect for insolvency risk which is a measure of stability. Bank competitiveness was found to partially mediate the relationship between financial inclusion and bank stability. However, there was no mediation for insolvency risk. The study thus concluded that financial inclusion influences stability. Further, increase in GDP growth rate encourages more financial inclusion. Moreover, banks that have developed competitive strategies are likely to be more stable. The study, therefore, recommends that managers of commercial banks should design strategies that enhance financial inclusion to many customers, develop strong and persuasive promotion of their products and provide financial literacy to the customers. This will enable the customers to appreciate and use the products and assist the banks to remain competitive in the market. The regulator should strengthen the legal and regulatory framework to ensure that banks remain stable while accommodating financial inclusion. Bank managers should lobby the CBK to maintain a favorable environment hence form an all-inclusive and stable financial sector over time.