Effect of Operational Efficiency and Credit Size on Financial Stability of Commercial Banks in Kenya

Mary Ndinda and Antony Mwai
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Mary Ndinda: KCA University, Kenya.
Antony Mwai: KCA University, Kenya.

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Abstract: This research sought to establish the effect of operational efficiency and credit size on financial stability of commercial banks in Kenya. The paper is an extraction from the Masters research of the first author. The study found that operational efficiency has no significant effect on financial stability of commercial banks in Kenya. It was established that credit size has significant effect on financial stability of commercial banks in Kenya. It was recommended that lending activities should be done with caution. Proper credit risk management system should be put in place which will help in assessing the credit worthiness of borrowers, analyze their repayment capabilities while also monitoring the progress of projects which loans were collected for. The study is of the suggestion that additional empirical researches can be done on listed commercial banks as well as non listed commercial banks in Kenya. This will provide basis for having comparisons of the effect of operational efficiency and credit size on financial stability of commercial banks in Kenya.

Date: 2023-01-15
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Published in Asian Journal of Economics, Finance and Management , 2023, 5 (1), pp.31-39

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05132187

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