The effect of product development on the financial performance of commercial banks in Kenya

Abstract

Product development is the introduction of a good or service that is new or significantly improved regarding its characteristics or intended uses; including significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics (OECD Oslo Manual, 2005). The effect of product development on the financial performance of commercial banks in Kenya are important concerns to product policy makers, the banking industry and the public at large. The objective of this study was to determine the effect of product development on the financial performance of commercial banks in Kenya. This study categorised determinants of commercial banks financial performance into two categories, namely internal and external factors where internal determinants of profitability, which are within the control of bank management and external factors are those factors that are considered to be beyond the control of the management of a bank. This study used a descriptive survey. The population of this study consisted of all 43 commercial banks in Kenya and therefore carried out a census survey. The study used both primary and secondary data. The primary data was collected using semi-structured questionnaires. Data presentation was done by the use of pie charts and frequency tables. The inferential statistic regression and correlation was done to establish the effect of product development on the financial performance of commercial banks in Kenya