Abstract: The banking sector in Kenya has had a challenge in realizing the set profitability levels. This study sought to establish the influence consumer lending on profitability of commercial banks in Nakuru town Kenya. The theory that formed the basis for this study was traditional banking theory. A cross sectional survey research design was adopted for this study. The target population for the study comprised of the credit managers in the 26 commercial banks in Nakuru town. There are 92 credit managers across the banks in Nakuru town. Since the population of the study is not large, the study adopted a census approach. The study made use of a structured questionnaire constructed on a five point Likert scale to collect data. Data was collected through drop and pick later method. The collected data was analyzed with the help of statistical package for social sciences (SPSS). Data was analyzed in form of descriptive and inferential statistics. The analyzed data was presented in form of statistical tables accompanied by relevant discussions. The study established that consumer lending had statistically significant relationship with profitability of commercial banks in Kenya. Therefore the study concluded that consumer lending plays a significant role in determining profitability of commercial banks. The study recommended that the banks management teams review their loan lending policies to avoid concentration on corporate lending and emphasize on consumer lending which greatly impacts on banks profitability. Further, the study recommended that the banks set up better consumer evaluation mechanisms that will enable efficient cream skimming processes.
Keywords: Debt Financing, Equity Financing, Equity Financing Decisions, Financial Sustainability, Manufacturing Firms.
Title: INFLUENCE OF CONSUMER LENDING ON PROFITABILITY OF COMMERCIAL BANKS IN NAKURU TOWN, KENYA
Author: Billy Kiprotich Chemirmir, Solomon Ngahu
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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