Financial Inclusion and Bank Stability of Commercial Banks Listed in Nairobi Securities Exchange, Kenya
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Date
2020
Authors
Kinyua, Daisy Wairimu
Omagwa, Job
Journal Title
Journal ISSN
Volume Title
Publisher
IJCAB Publishing Group
Abstract
Following the global financial crisis of 2007-2009, policy makers, regulators and financial
institutions have heavily invested in initiatives and reforms aimed at improving the financial
stability of the banking sector. However, despite these initiatives, many of the listed
commercial banks in the recent past have continued to report dismal performance.
Additionally, the stability levels of the banks remain low despite implementation of financial
inclusion policies which raises concern. The study sought to determine the effect of financial
inclusion on bank stability of Commercial banks listed in Nairobi Securities Exchange, Kenya.
The specific objectives were to establish the effect of financial availability, financial
accessibility, financial usage, and service delivery on bank stability. The study employed a
descriptive research design and targeted 11 commercial banks listed in Nairobi Securities
Exchange, Kenya. The period scope was year 2014 to year 2018 and purposive sampling was
applied in picking a sample of 55 respondents. Primary data was collected using
questionnaires while secondary data was gathered utilizing a document review guide.
Multiple regression analysis, correlation analysis, and descriptive statistics were applied in
the data analysis. The study found that financial availability (p=0.033), financial accessibility
(p=0.015), financial usage (p=0.039) and service delivery (p=0.023) all had significant
effects on bank stability of commercial banks listed in Nairobi Securities Exchange, Kenya.
The study concludes that financial availability, financial accessibility, financial usage, and
service delivery play a crucial role in fostering stability of listed commercial banks in Kenya.
The study recommends that central bank should ensure compliance on Central Bank of Kenya
policies that govern capital adequacy to avert risks associated with Non-Performing Loans.
Commercial banks listed in Nairobi Securities Exchange are recommended to embrace latest
technologies in service provision. In addition, financial institutions need to invest in customer
service by first providing employees with the right skills and technology to provide
exceptional customer service. Further, banks are recommended to put in place strong lending
policies as well as debt recovery measures which will improve their stability levels
Description
An Article Published in International Journal of Current Aspects in Finance, Banking and Accounting
Keywords
Bank Stability, Financial Accessibility, Financial Usage, Financial Availability, Financial Inclusion, Service Delivery
Citation
Kinyua, D., & Omagwa, J. (2020). Financial Inclusion and Bank Stability of Commercial Banks Listed in Nairobi Securities Exchange, Kenya. International Journal of Current Aspects in Finance, Banking and Accounting, 2(1), 64-81. https://doi.org/10.35942/ijcfa.v2i1.113