Factors Affecting the Performance of Supply Chain Financing In Kenya: A Case Study of Commercial Bank of Africa, Kenya

A Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree in Master of Organizational Development for Executives (MOD)This examines the factors affecting the performance of supply chain financing in Kenya. The study was driven to answer the following research questions: what factors affect the adoption of supply chain financing by Commercial Bank of Africa?; what challenges are faced by supply chain financing stakeholders in Kenya?; and what mitigating strategies are available for supply chain financing stakeholders in Kenya? The study adopted a descriptive research design. The target population of interest for this study consisted of all employees of Commercial Bank of Africa (CBA) who were 119 in total. The sample frame for the study was a complete list of employees that worked at CBA and was sourced from the organization’s human resource office. This study adopted stratified sampling technique and from the total population, the researcher used 75% of the total population selected from each strata that brought the total to 89. Descriptive statistics was computed whereby frequencies, percentages, means and standard deviations were presented in the form of both tables and figures. Inferential statistics was computed with the aid of regression analysis and was used to examine the factors that affect the adoption of supply chain financing in Kenya. The study revealed that the adoption of supply chain financing was geared towards improving the operational efficiency of both sellers and buyers and that close collaborations between stakeholders was an important factor for banks in enhancing the performance of supply chain financing. Banks enhancing information transparency could facilitate the alignment of incentives geared to enhance sound supply chain financing performance and information sharing in the supply chain could be used to enable accurate and faster business decision-making and enhance the adoption of supply chain financing. The study also showed that, supply chain financing could only be adopted through seamless flow of both physical and non-physical assets among all firm stakeholders and through formulation of clear frameworks that facilitated its adoption between the involved stakeholders. The study showed that lack of knowledge and information among supply chain stakeholders, the lack of skilled personnel and training on supply chain financing tools, the lack of technology that facilitates the processing of financial transactions taking place along the supply chains, the inability to have technology that showed the visible movement of goods and services along supply chains, the lack of automation in the payment processes made it difficult for banks to implement working capital and third party financing programs were all factors that hindered the adoption of supply chain financing in Kenya. The study showed that, SCF could be improved with the presence of a framework that readily incorporated infrastructure, strategy, governance and process among all stakeholders, as well as provision of policies that focused on showing how different stakeholders were to interact along the supply chain, and through the formulation of procedures aimed at safeguarding internal organizational consistency in terms of its operations. The study showed that, an organizations ability to enhance internal processes by ensuring they were flexible enough to respond to market changes and that were in harmony with those of its customers and suppliers could facilitate the easy adoption of supply chain financing. The study recommended CBA bank to build a good picture of the supply chain in which its clients operate if they are to provide effective SCF products. Banks often do not understand the workings of these supply chains, thus the study recommends CBA managers to recognize that acquiring such ‘know how’ requires dedication and sophisticated staff, and thus it needed to build its employees’ knowledge gradually through incremental improvements - starting with a product or two and gaining experience through these