Bank Characteristics and Lending Rates among Commercial Banks in Kenya
Loading...
Date
2017
Authors
Maubi, Andrew Mokaya
James, Rosemary
Jagongo, Ambrose
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
This study sought to investigate the effect of bank characteristics on lending rates among
commercial banks in Kenya. Specifically the study sought to; establish the effect of bank size, credit
risk, and liquidity risk, operating costs, on lending rates among commercial banks in Kenya. The
research philosophy for this research was positivism. Explanatory non-experimental research design
was employed. The target population was thirty nine (39) commercial banks from whom secondary
data was collected by way of census since these are the banks from which complete information
could be obtained for meaningful analysis for the study period 2006-2015. Descriptive Statistics
including Mean, Standard deviation, inferential statistics (Panel regression analysis and Correlation
analysis) were carried out. Data analysis was run on the Stata 13 package and findings presented in
figures, tables, graphs and charts while deriving conclusions and recommendations from the
findings of the study. The finding revealed that bank size, operating costs, had positive and
significant effects on lending rates. However the effect of GDP growth rate and bank size was found
to be negative. The finding further showed that the effects of credit risk and liquidity risk on lending
rates was positive but insignificant. Based on the findings, the study concluded that bank
characteristics play a significant role in determining the lending rates of commercial banks. The
study recommends that individuals wishing to take mortgages home equity loans, car loans, and
personal loans from commercial banks should consider the size of the banks, its market share and
other internal factors to identify the most competitive banks in terms of lending rates.
Key Words: Bank, Credit, Liquidity, Risk, Operating Costs, Lending
Description
DOI: http://dx.doi.org/10.24327/ijrsr.2017.0808.0663
Keywords
Bank, Credit, Liquidity, Risk, Operating Costs, Lending
Citation
http://www.recentscientific.com, International Journal of Recent Scientific Research. Vol. 8;8, pp. 19289-19297 August, 2017. DOI: http://dx.doi.org/10.24327/ijrsr.2017.0808.0663