Financial Inclusion, Bank Competitiveness and Credit Risk of Commercial Banks in Kenya

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dc.contributor.authorMusau, Salome
dc.contributor.authorMuathe, Stephen M. A.
dc.contributor.authorMwangi, Lucy
dc.date.accessioned2018-01-26T08:30:18Z
dc.date.available2018-01-26T08:30:18Z
dc.date.issued2018-01
dc.descriptionDOI:10.5430/ijfr.v9n1p203en_US
dc.description.abstractThis paper provides an empirical analysis of the synergies and trade-offs between financial inclusion and credit risk of commercial banks in Kenya. The paper analyzed the effect of financial inclusion on credit risk and the mediation effect of bank competitiveness of commercial banks in Kenya. Financial inclusion was measured using three dimensions of bank availability, bank accessibility and bank usage, bank competitiveness used (HHI) while credit risk was represented by the non performing loans ratio. The study was anchored on financial intermediation theory supported by finance growth theory and asymmetry information theory. The target population was all the 43 commercial banks in Kenya. The study used secondary data collected from Central Bank of Kenya annual reports; commercial banks of Kenya published audited financial statements and annual data from Central Bureau of statistics of Kenya for the period of 2007-2015. Data was analyzed using descriptive statistics and panel multiple regression analysis. The results obtained found that bank availability, bank accessibility and bank usage had significant effect on credit risk of commercial banks in Kenya. Bank competitiveness was found to partially mediate the relationship between financial inclusion and credit risk. From the findings the study concluded that financial inclusion has a significant effect on stability of commercial banks in Kenya. The study recommends that commercial banks to formulate policies to ensure they remain stable and competitive while accommodating their activities to ensure financial inclusion, hence forming an all inclusive and stable financial sector over time. Keywords: financial inclusion, stability, competitiveness, credit risk, Kenyaen_US
dc.identifier.citationhttp://ijfr.sciedupress.com, International Journal of Financial Research Vol. 9: No. 1; 2018, doi:10.5430/ijfr.v9n1p203en_US
dc.identifier.issn19234023E
dc.identifier.issn19234031
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/18164
dc.language.isoenen_US
dc.publisherSciedu Pressen_US
dc.subjectFinancial inclusionen_US
dc.subjectStabilityen_US
dc.subjectCompetitivenessen_US
dc.subjectCredit risken_US
dc.subjectKenyaen_US
dc.titleFinancial Inclusion, Bank Competitiveness and Credit Risk of Commercial Banks in Kenyaen_US
dc.typeArticleen_US
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