A survey on the extent to which commercial banks have penetrated the Kenyan market

Abstract

The objectives of the study were to establish the extent to which commercial banks have penetrated the Kenyan market and identifying the factors that influence the market penetration of the commercial banks in Kenya. The factors considered include competition, possibility of new entrants, clients, services offered, and ownership of banks, competitor future goals, current strategies and government regulation. The core of the study was to establish the processes used by the commercial banks to gain market share and how successfully they have penetrated the market, as well as how well they have dealt with challenges of competition. The respondents were drawn from commercial banks operating within Nairobi Central Business District. The survey was carried out using am detailed questionnaire which was completed by the corporate marketing managers as well as retail marketing managers of the respective banks. Response was obtained from 75 of them out of a target sample size of 90. Results indicated that majority of commercial banks consider market penetration as an extremely important aspect in the long term survival of the banks. This has been necessitated by the increasing competition within the industry with each player trying to command as much market share as is possible. Further results showed that commercial banks are very keen on market penetration strategies and most have a planning department to take care of this responsibility and that most are focusing on long term rather than short term strategies. The study also established that commercial banks are investing in innovation and technology in order to create new niches in the market, effectively reaching more of the un-banked population in the country. Results showed that the business market leads the urban market in seeking banking services.