scholarly journals Determinants of Interest Rate Spread: Some Empirical Evidence from Kenya’s Banking Sector

2014 ◽  
Vol 7 (11) ◽  
Author(s):  
Moses C. Kiptui
Keyword(s):  
Interest Rate ◽  
Empirical Evidence ◽  
Banking Sector ◽  
Interest Rate Spread

scholarly journals THE DETERMINANTS OF INTEREST RATE SPREAD AMONG COMMERCIAL BANKS IN KENYA

2017 ◽  
Vol 2 (5) ◽  
pp. 29
Author(s):  
Leah Njoroge ◽  
Mercy Warui ◽  
Catherine Mbogo ◽  
Margaret Chiera ◽  
Dr. Chogii
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Market Structure ◽  
Significant Relationship ◽  
Commercial Banks ◽  
Banking Sector ◽  
Unique Contribution ◽  
High Interest Rate ◽  
Interest Rate Spread ◽  
The Interest Rate

Purpose: To establish the determinants of interest rate spread among commercial banks in Kenya. Methodology: The study utilized a descriptive survey research design. Findings: The results indicated that the commercial banking sector has witnessed a gradual rise in the Interest rate spread. Results also showed that the mean of market structure has been fluctuating with year (2010) being the lowest with mean of 4 and year (2012) being the highest with mean 12. Results also showed that there was no regulation from the year (2005) to the year (2009) but it was later adopted whereas regulations shoot steadily to mean of 1.0 in the year (2009) and remained in the same level the rest of the years. The regression results indicate that there is a positive and significant relationship between market structure, credit risk and interest spread. The regression results also indicated that there is a positive but insignificant relationship between access to information and interest spread. Further, the results indicated that there is a negative and significant relationship between regulation and interest spread. Unique contribution to theory, practice and policy: The study is important to the management of Commercial banks as it will provide an insight on the factors influencing interest rate spread among commercial banks in Kenya. The results of this study will provide information to policy makers and other stakeholders in the financial sector (especially the banks) to come up with strategies that help in dealing with the high interest rate spread experience in the banking sector and thus improve on the financial performance of the organisations. It may be used as a tool for persuading commercial banks to reduce their interest rates spread and hence increase their volume of business, which of course would compensate the loss in the interest rate spread. The study will also be invaluable to the government and CBK. This is because the monetary policy framework of Central Bank of Kenya and its implementation will be guided by a need to ensure, among others: realistic interest rate spreads that encourage financial deepening and a safe, sound, efficient and competitive banking system through discreet risk management. These findings therefore might influence the effectiveness of economic policies. The research results will also be important to scholars and researchers as it will add to the existing pool of knowledge.

scholarly journals EFFECT ANALYSIS OF BANKING SECTOR REFORM AND GROSS MANUFACTURING OUTPUT IN NIGERIA: IMPLICATIONS FOR ACHIEVING SUSTAINABLE DEVELOPMENT GOAL 9

2021 ◽  
Vol 8 (1) ◽  
pp. 117-147
Author(s):  
Dike Okechukwu ◽  
◽  
Nwogwugu Uche ◽  
Kalu Chris ◽  
Eze Eze ◽  
...  
Keyword(s):  
Sustainable Development ◽  
Exchange Rate ◽  
Interest Rate ◽  
Banking Sector ◽  
Nominal Exchange Rate ◽  
Bank Credit ◽  
Sustainable Development Goal ◽  
Sector Reform ◽  
Development Goal ◽  
Interest Rate Spread

No doubt, structural transformation lies at the heart of economic progress of any nation. Most significantly, the industrial sector, especially manufacturing, is a key engine of growth and development. Unfortunately, manufacturing development in Nigeria, over the years have not improved despite the banking sector reforms. This paper empirically investigated the shock effects of the banking sector reform on gross manufacturing output in Nigeria between the period 1970-2018. The variables used in the paper include gross manufacturing output, bank credit to the manufacturing sector, interest rate spread, nominal exchange rate, market capitalization, manufacturing capacity utilization and a dummy variable. The data were sourced from the Central Bank of Nigeria Statistical Bulletin, International Monetary Fund Financial Reports and the World Bank Development Indicator (2019). The Vector Autoregressive Model (VAR) estimation techniques were employed to achieve the objective of the paper. The results showed that gross manufacturing output responded negatively to bank credit during all the reforms phases. It further revealed that it responded negatively to a unit shock in exchange rate during the pre-SAP and bank recapitalization periods, but positively during the deregulation, regulation and liberalization periods. It showed also that gross manufacturing output responded negatively to shock in interest rate spread during all reform phases in Nigeria. The policy implication of these findings attested to the fact that the linkage between the banking sector and real sector is weak in Nigeria. Hence for Sustainable Development Goal 9, in particular 9.2, to be achieved, the linkage between both critical sectors must be integrated and strengthened via improving on the banking sector fundamentals and introduction of shock measures from the reform.

scholarly journals Determinants of small and medium scale enterprises financing by the banking sector in Nigeria: a macroeconomic perspective

2016 ◽  
Vol 13 (1) ◽  
pp. 170-175 ◽  
Author(s):  
Patrick Olufemi Adeyeye ◽  
Bolanle Aminah Azeez ◽  
Olufemi Adewale Aluko
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Commercial Banks ◽  
Inflation Rate ◽  
Banking Sector ◽  
Financial Deepening ◽  
Medium Scale ◽  
Interest Rate Spread ◽  
Lending Rate ◽  
Macroeconomic Indicators

This study assesses from a macroeconomic perspective the determinants of small and medium scale enterprises (SMEs) financing by the banking sector in Nigeria between 1992 and 2014. The empirical model specifies commercial banks’ lending to SMEs as a function of selected macroeconomic indicators which include commercial banks’ total deposits, financial deepening, interest rate spread, lending rate, monetary policy rate, commercial banks’ total assets and inflation rate. The 2SLS estimation results show that only commercial banks’ deposit mobilization, depth of the financial sector and size of the banking sector act as determinants of SMEs financing by commercial banks

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