The Effects of Financial Intermediaries on the Economic Growth in Kenya: (A Case Study of Mombasa County)
Keywords:
Microfinance, Integrated Program Areas, Small and Medium Enterprises, Open InnovationAbstract
The main objective of the study is to investigate intermediation efficiency and productivity in the financial intermediaries sector in the post liberalization period in Kenya in relation to the growth of Mombasa County. The study is motivated by the fact that though the banking sector constitutes a large part of the financial system in Kenya, little is known about its intermediation efficiency and productivity status. Further banks are awash with liquidity despite private sector credit demand indicating some inefficiency in the intermediation process in Kenya. The research employed descriptive research design using simple random sampling which enables every member of the population to have an equal and independent chance of being selected as respondents and also simplest, most convenient and bias free selection method. The data was collected by use of questionnaire thereafter analyzed using both quantitative and qualitative techniques. The results show that though the banks were not fully efficient in all respects, they performed fairly well during the period under study. Banks still have reason and scope to improve performance by improving their technology, skills and enlarging their scale of operations so as to be fully efficient.
Based on the main conclusions, policies encouraging competition, products diversification to advance loans, risks minimization through increased capital regulation and privatization of some banks are generally recommended.
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