Location Decisions Among Commercial Banks in Kenya

Abstract

Much of the previous research into the factors that influences the choice of location among commercial banks mechanism has concentrated generally on developed countries. Not much known local study has focused on the factors that influences the choice of location among commercial banks in Kenya. This study therefore sought to fill the existing research gap by carrying out a survey study on the factors that influences the choice of location among commercial banks in Kenya. The main purpose of the study was to investigate into the factors that influences the choice of location among commercial banks in Kenya and determining the models used in location decision among commercial banks in Kenya. This research was conducted through a survey study among commercial banks in Kenya. The target population of this study were the managerial staff working among these commercial banks in Kenya. The study focused particularly on the departmental heads. This paper utilized a questionnaire as used in various previous research projects. This study collected both quantitative and qualitative data. The response received was analyzed descriptively. From the findings, the study established from the majority of respondents that the various influences the choice of location among commercial banks in Kenya and are better adhered to for performance to be effective in a very great extent. The survey sought to establish the factors that influenced the bank’s on its facilities location decision. The main factors that influenced the banks on its facilities location decision were; total cost factors, proximity to customers, business climate, infrastructure, and competitive advantage. The study further established that the following factors to less extent influence the bank’s on its facilities location x decision; quality of labor, suppliers, free trade zones, trading blocs, and environmental regulation. The survey established that cost of land and cost of construction to a great extent influence location decision. Commercial banks consider distance and access to service to great extent. The study further found that business climate is mainly determined by other banks. The commercial banks put into consideration of highly industrial concentration, existence of reliability utilities, and availability of parking area and existence of modes to transportations when they are making location decision. Finally commercial banks consider distance of the other banks and service offered by the other banks when they their facilities location decision.