This study examined the responsiveness of commercial banks' sectoral credit supply to changes in credit demand expectations, as captured in the Central Bank of Kenya's Quarterly Credit Officers Survey. The study developed an index to measure changes in credit demand expectations and subjected...

This study examined the implication of financial innovation on financial depth and economic growth in Kenya using quarterly data covering the period 2009 to 2020. Based on autoregressive distributive lag models, we demonstrate a positive relationship between financial innovation and financial...

Literature has divergent views on the relationship between market structure and allocation of credit by banks. Using quarterly bank scope data from 23 banks operating in Kenya between 2006 and 2018, we find that, while an increase in competition may improve allocation of credit in the short run,...

This study investigates the nexus between market structures on the banks' pricing behaviour in Kenya using the panel VAR model for 2003 - 2018 period. Bank-level annual data sourced from audited financial statements and macroeconomic data sourced from Central Bank of Kenya were used. Estimation...

We estimate a proposed core financial intermediation model built upon an extended classical quantity theory using Bayesian econometric techniques. The findings suggest that the persistent deceleration in bank deposits, bank credit and domestic final output during the most of the second half of...

With most economies seeking to tap on MSMEs to navigate beyond the devastating impact of Covid-19, this paper seeks to create an understanding of the MSMEs demand-side credit perspectives. Using 279 MSMEs from the KBA Inuka Enterprise program, we anchor our analysis on a three-step probit model...

The paper sought to explore the role of bank capital in mitigating credit risk and promoting financial stability. To achieve this, we constructed a Financial Soundness Index to evaluate financial stability conditions. A Panel Vector Auto Regression Model was employed using annual bank-level data...

This paper examines how macroeconomic shocks affect credit risk in the Kenyan banking sector. Using an autoregressive distributed lag (ARDL) model within a time-series framework, we establish the existence of both a short-run and long-run nexus between macroeconomic variables and bank-credit...

This paper uses annual data from Kenyan banks over the 2010-2020 period to empirically analyze the link between diversification (non-interest income) and bank performance. Using dynamic panel regressions, the study finds that banks which diversify (functionally) their sources of revenues tend to...

This study examines the effect of mobile money payment service on banking stability in Kenya. Employing data spanning 2007 to 2018, the study builds a model using the generalised method of moment estimation approach of bank stability incorporating its diverse measures - capital adequacy, asset...