This paper seeks to examine the nexus between market power and intermediation efficiency in the Kenyan banking system. Using bank-specific, annual balance sheet and profit and loss data for the period 2003-2018, we construct three measures of efficiency; overall efficiency, allocative efficiency...

The Kenyan credit market is characterised by imperfections that manifest themselves in imbalances in the form of credit gaps where supply deviates from its long-run trend. This paper extends the analysis of the credit market adjustment process beyond the conventional price mechanism, recognising...

This paper has the dual objective of establishing whether episodes of market shocks necessarily trigger the choice between more liquidity and more profitability and ascertaining whether the post-shock recovery path is one of liquidity giving way to non-liquid assets growth and, therefore, more...

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...

Globally, credit scoring adoption has been on the rise on account of increased access to data, computing power, and the need for efficient credit allocation that is supportive of entrenching financial inclusion and economic growth. Relatedly, the adoption of risk-based pricing has gained...

This paper seeks to examine the effect of Fintech credit on bank stability using an unbalanced panel dataset of 37 commercial banks in Kenya between 2013 and 2020. The recent evolution of Fintech comes with the promise of being both revolutionary and disruptive. The temptation of a...

At what point do you consider yourself financially included? This question, which is this paper's objective, is considered mundane and therefore seldom asked and consequently hardly answered. The paper anchors its assessment on the distinction between access and usage of financial services and...

This paper seeks to explore the Kenyan interbank market characteristics at a time of liquidity stress and how it relates to the intervention by the Central Bank of Kenya (CBK) through the open market operation. We seek to ascertain whether the CBK's action during the interbank market distress -...

This paper aims at analyzing the bank-based versus market-based dichotomy of Kenya's financial system. This is in view of the fact that the financial sector, which is bank dominated, is showing a clear tendency of the banking industry increasingly engaging in capital markets operations. While...

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...