Commercial Banking in an Era of Deregulation

Cooper, Kerry; Roussakis, Emmanuel N.

doi:10.2307/1058927

Cited by 6 publications

(2 citation statements)

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“…The theory does not include long term loans which is a major hindrance due to the conflicting link it has with nation's economic development (Dodds & Nwankwo, 1992). According to Emmanuel (1997), liquidity banks majorly are ensured through the self-liquidation of loans. The theory further implies that loans are lent to banks based on the security of short-term loans whenever they make short term self-liquidating productive loans.…”

Section: Literature Review Theoretical Reviewmentioning

confidence: 99%

Prudential Regulations and Financial Performance of Microfinance Banks in Kenya

MUCHAI,

MUCHIRA, PhD

2024

strategicjournals.com

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As financial intermediaries, microfinance banks are crucial. The growth of an economy is significantly influenced by microfinance institutions' financial performance, in addition to their function in intermediation. The prudential guidelines and financial health of Kenyan microfinance banks were examined in this study. The precise objectives looked on how credit, capital adequacy, and liquidity regulations affected Kenyan banks' financial performance. Lastly, the researchers looked into how the microfinance institutions' size impacts prudential regulations and financial performance. The study was grounded in the theories of stakeholders, capital buffer, and liquidity management. The sample approach used was census sampling, and the research design was explanatory. The 13 MFBs that made up the target population and are accredited by the Central Bank of Kenya produced audited financial statements and yearly reports, which provided secondary data. Normality, multicollinearity, stationary, autocorrelation, heteroscedasticity, and diagnostic tests were performed on the data. Additionally, multiple regression analyses, correlation analyses, and descriptive statistics were carried out. The results showed that capital adequacy regulations significantly influenced MFBs' financial performance, highlighting the importance of maintaining sufficient core capital. However, liquidity regulations did not significantly impact performance, suggesting customer deposit ratios may not be a critical factor. Credit regulation, specifically non-performing loans, had a significant negative impact, highlighting the importance of effective credit management. The association between performance and prudential regulations is not affected by MFB size. These findings highlight the importance of targeted and effective regulatory measures in the microfinance sector.

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Section: Literature Review Theoretical Reviewmentioning

confidence: 99%

Prudential Regulations and Financial Performance of Microfinance Banks in Kenya

MUCHAI,

MUCHIRA, PhD

2024

strategicjournals.com

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“…While there is risk associated with continually refinancing liquidity with short-term debt due to the credit supply shocks and since short-term debt requires the NFCs to refinance frequently, it increases the corporate short-term debt refinancing failure costs according to Ref. [ 120 ] because often lenders do not wish to refinance short-term debt when it matures [ 84 ]. Thus, the threat of financial distress and the requirements of short-term lenders motivate managers to achieve positive and significant operational efficiency with liquidity.…”

Section: Research Findingsmentioning

confidence: 99%