Internationalization of Commercial Banks in Kenya

Abstract

This study was conducted on the internationalization of commercial banks in Kenya which was the key objective of this study. Commercial Banks have also developed strategies to enable them internationalize and maintain a competitive edge in the market Internationalization has helped Kenyan commercial banks to do a significantly better job of providing what customers are looking for thereby enabling the bank to earn a competitive advantage. Internationalization is important for growth of companies in countries that allow free market model of business has attracted entry into new markets requiring tact and strategy. The research design involved a cross sectional survey adopted in all commercial banks in Kenya to give an insight of the internalization of banks in Kenya. Data was collected using a questionnaire that was administered through drop and pick later method. Percentages, frequencies, pie charts, mean and standard deviation were used to analyze internationalization of commercial banks in Kenya. The study found that local commercial banks are quite sluggish to internationalize their ventures. There are several explanations for this finding: The management of commercial banks in Kenya is largely autocratic and therefore major decision-making processes are limited to a few leaders; managers are lowly informed about how businesses internationalize they lack adequate skills; lack of definite investment incentives in the target foreign market and; poor financial capacity to expand their banking business. The study recommends that managers of commercial banks in Kenya should raise their entrepreneurial skills to a global level. This can involve things like performing market analyses and studying foreign cultures and business strategies employed by similar businesses in other countries. In doing so, the respective management panel or specific department should create atmosphere that facilitates exploration of international markets with great reap benefits for the bank in question. Further research on the same area can be done in commercial banks outside Kenya that are similar in terms of size and areas of intervention. Findings can be compared to assess if there areas of commonalities or unique factors. The findings of this study and application thereof are limited to commercial banks in Kenya. They may not be applicable directly to other organizations operating outside the Kenyan banking industry.