DETERMINANTS OF GROWTH IN THE BANKING INDUSTRY IN KENYA

This study sought to establish the determinants of growth in the bankingindustry in Kenya. The study used the population of 43 banks by employingdescriptive cross sectional survey design and semi structured questionnaire.Descriptive statistics was used to analyze the quantitative data while regressionwas used to establish the relationship between the variables. The studyestablished that firm size, profitability, product development, marketpenetration and innovation and technology significantly enhance growth. Themost significant determinant of growth is size of the firm followed byprofitability, market penetration, product development, and innovation andtechnology respectively. The study recommends that banks must be focused interms of their needs and using the right technology and innovation to achievegoals, rather, than imitate their competitors. Government’s participation inensuring focused telecommunication industry must be visible to reduce orremove avoidable costs of investing in innovation and technology by the banks.Slow market penetration is another major problem militating against thegrowth. Government must make right policy to ensure fair competition in theindustry and promote market penetration by respective banks. The banks shouldinvest more in research to understand the changing trends in customer need andalso reinvest in market expansion