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    Effect Of Strategic Implementation on Organizational Performance of Commercial Banks in Meru County, Kenya
    (KeMU, 2025-09) Martin, Kirimi Mwongera
    An increment of non-performing loans within the commercial banks, have negatively affected the implementation pace of new strategies in branches such as in Meru. The general objective was to examine the influence of strategic implementation on organizational performance of commercial banks in Meru County, Kenya. The specific objectives were to evaluate the influence of resource allocation, strategic alignment, process development and change management on organizational performance of commercial banks in Meru County, Kenya. The four theories of the study are theory of management by objectives, theory of change, resource-based view theory, and institutional theory. Descriptive research design was used to collect data from 19 registered commercial banks in Meru County, as the unit of observation. The respondents were 19 branch managers, and 152 banking staff. In determination of samples, the study used purposive to sample 19 managers and simple random method to sample 91 staff. The study conducted a pilot study in two microfinance banks which are Faulu and Kenya Women Micro finance institutions. Questionnaires were analyzed using SPSS to generate descriptive and multivariate analysis. The interview results will be analyzed by thematic method. The correlation coefficient indicated that resource allocation, strategic alignment, process development, change management had a positive influence on organizational performance. The recommendations on resource allocation are that senior management should ensure that there is impartiality in organizational politics to minimize its interference with even resource distribution among the commercial banking departments. On strategic alignment, the bank management could consider including strategy alignment as an area of concern in the mentorship programs in place. On process development, the commercial bank’s management could consider sensitizing the issue of cyber management within the banking departments. On change management, the management should strengthen its policy framework that ensures that the staff are accorded a chance to be involved in strategic formulation.
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    Effect of Agency Banking on Financial Performance of Commercial Banks in Isiolo County, Kenya
    (KeMU, 2025-01) Dulacha, Amina Abdi
    Commercial banks authorized for commercial purpose are the super focal empowering the economy. Therefore, the performance of agency banking stabilizes the commitment of banks to the country's economic development. However, the financial performance of commercials banks in Kenya was noted to decline in 2023 partly caused by decreased agency banking transactions from Kshs 158.4 million to Kshs 145.3 million in 2022 and 2023 respectively. The purpose of the study was therefore to examine the effect of agency banking on the financial performance of commercial banks in Isiolo County, Kenya. The specific objectives were to explore the effect of agency convenience, agency cost, quality of agent services, and agency compliance on financial performance of commercial banks in Isiolo County, Kenya. The study was guided by diffusion of innovation theory, transaction cost economics theory, network effects theory and principal-agent theory. A mixed designs comprising descriptive, qualitative and quantitative were used, targeting Cooperative Bank, KCB, and Equity Bank, which control over 90% of authorized banking agents in the region. The target population included 102 staff in Equity bank, 123 staff in Cooperative bank, and 80 staff in KCB bank, which was a total of 305 banks. The study adopted the Yamane’s formula (1967) to result to a sample size of 58 staff in Equity bank, 70 staff in Cooperative bank, and 45 staff in KCB bank, which was a total of 173 staff. Stratified sampling was applied to select respondents from the finance and accounts departments of these banks. Data were collected via structured questionnaires and supplemented with secondary financial data. The pilot research used a sample size of 10% for this investigation, with 17 respondents randomly selected to fill out the survey in Meru County. To ensure the data was reliable, Cronbach's alpha was applied, which measures internal consistency. The questionnaires included in this study underwent a validation process to guarantee their content and face validity, as well as to gauge their overall quality. The results were presented using Tables and explanations. The study found out that the correlation for agency cost was r = 0.751, p < 0.01; correlation for agency cost was r = 0.702, p < 0.01; correlation for quality of agent services was r = 0.655, p < 0.01; and correlation for agency compliance was r = 0.774, p < 0.01 with financial performance. Therefore, the conclusion on agency convenience some of the agency banking services were noted not to be user friendly which hampered a lot of the clients from subscribing to them. On the agency costs, the operational costs associated to installation and maintenance of IT, compliance with banking regulations and staffing the agencies to suit the needs of the bank were high. On the quality of agent services, the study noted that most of agency banking had average standards to low standards as compared to what the branch banking was offering. On regulatory compliance, conclude that it stood out as the most critical factor influencing financial performance. The study’s recommendations on agency convenience are that bank managers should prioritize the convenience of agency services. This can be achieved by expanding the network of agents to ensure that services are accessible anywhere. On agency cost are that operations supervisors should consider focusing on implementing more efficient operational processes. On quality of agent services are that the senior management should develop a policy structure that ensures ongoing training programs for agents to equip them with exceptional service skills. On adherence to agency compliance are that the branch managers should foster a culture of compliance within the organization, emphasizing the importance of ethical practices and regular training on regulatory updates.
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    Relationship between Financial Derivatives and Financial Performance of Selected Listed Commercial Banks in Kenya
    (KeMU, 2021-08) Muthine, Philipino
    Market globalization has tremendously increased exposing banks into different forms of financial risks. Financial risks when inadequately managed may cause the financial performance of commercial banks to decline. Managing these financial risks amongest other ways, involve creating tradable instruments such as derivatives to offset them. This study examined the relationship between financial derivatives and financial performance of selected listed commercial banks in Kenya. The objectives of the study were to assess the influence of swaps, options, forwards and futures on financial performance of listed commercial banks in Kenya. Four theories that were espoused in this study included risk management theory, capital irreverence theory, financial intermediation theory and normative decision-making theory to guide swaps, options, forwards and futures respectively. Descriptive research design was used when collecting data using closed ended questionnaires from the selected 11 listed commercial banks in Kenya. Required data was provided by risk managers, operations managers, operations managers and marketing managers to participate in the study. Census sampling technique was used due to the small target population hence every listed commercial bank was included. To ensure validity and reliability, pre-test questionnaires was sent to six respondents who were selected by simple random method of sampling from the non-listed banking sector. The six respondents were junior officers in risk, credit, operations and marketing departments of non-listed commercial banks in Meru Kenya. The collected data was then coded using the SPSS 24.0 software. The coded data was analyzed quantitatively using the descriptive statistics such as mean, percentage and standard deviation while inferential statistics such as person correlation analysis were used. Linear regression models were also used. Further on, the tables, graphs were used when indicating the analysis results. The study indicated that there was a linear relationship between financial derivatives and financial performance of selected listed commercial banks in Kenya. The study discovered that sales of swaps contracts was low and there were increasing costs associated with these kind of derivatives hence reducing profits. In addition, since most forwards take a long time to mature, when banks were restructuring their computerized systems, they lost client’s contact information through misplacement or not correctly capturing in the new system. These results proved that the banks lacked enough qualified staff to amicably handle all issues and report on time. In addition, it was evident that the banks did not have complete infrastructure set up that is required to run financial derivatives such as futures. The study recommends that there should be a aggressive marketing initiatives in the banking sectors to enable incorporation of more clients into derivatives contracts. `
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    Relationship between Islamic Financing Instruments and Financial Performance of Commercial Banks in Isiolo County Kenya
    (KeMU, 2021-08) Halake, Abdi Huka
    Islamic banking has become popular in the last three decades, not only in Arab and Islamic world but also in other parts of the World. Due to its profit-risk sharing principles, Islamic banks, compared to non-Islamic banks, seek for a just and an equitable distribution of resources. This caused non-Muslims to also adopt Islamic banking in different parts of the world. However, despite over four decades of experience of Islamic banking and finance, the industry had its critics, both Muslim and non-Muslims due to low market share rate of Islam banking in Kenya as compared to conventional banks. This study aimed to examine relationship between Islamic financial instruments and financial performance of banks in Isiolo County Kenya. The study had specific objectives such as measuring the influence of Islamic home, auto, personal and trade financing instruments on financial performance of commercial banks in Isiolo County Kenya. This study was guided by three theories; assimilation theory, Solow Swan class growth theory and social exchange theory. Assimilation theory guided the survey into Islamic home and personal instruments. Solow Swan class growth theory will guide the survey into Islamic automobile financing instruments and social exchange theory guided the survey into Islamic trade financing theory. Descriptive research design was used in the study. The respondents were customer service officers and loan officers in the ten commercial banks in Isiolo County. They were be selected using census method. Data collection was done using closed-ended questionnaires and secondary data collected through analysis of report from 2017 to 2020. To ensure validity and reliability, pre-testing of questionnaires was done at Kenya Commercial Bank in Meru town. Coded data in SPSS 24.0 computer program analyzed quantitative and qualitative data using the descriptive statistics such as mean, percentage and standard deviation. Multiple regression was used to test hypothesis of the study. Tables, graphs and detailed explanations were used to present the final results of the study. The study found out that the problem was not in provision of home financing instruments by the bank but untimely re-payment on the issued financing. In addition, the respondents did not tally that having sharia committee in disbursing car loans had enabled clients have confidence with the automobile loans. Further on, most Islamic personal products were almost similar to conventional products hence clients did not really distinguish between the two. In addition, it could also mean that Islamic personal products were very complicated for clients to understand them hence preferring the conventional personal products. The results further indicated that the community around Isiolo county did not actually know there were such kind of products that would be of benefit to them. The study recommends that the bank management should provide training to banking staff on how to administer Know Your Customer procedures when administering various Islamic financing instruments. There should marketing drives to educate the community more on these financing instruments.