EFFECT OF CASH TRANSPORT ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA

Abstract

Purpose: The main aim of the study was to assess the effect of cash transport on the financial performance of commercial banks in Kenya.Methodology: The research was carried out through a descriptive survey research design. The study population was all the 43 commercial banks registered and licensed to operate in Kenya. A multi stage sampling approach was used. In the first stage, a census of all the 43 commercial banks was conducted, that is, the units of analysis were the commercial bank. In the second stage, purposive sampling was used where two respondents from every organization were taken. The study used both primary and secondary data for analysis. Primary data was collected using questionnaires while secondary data was obtained using secondary data collection template. A multiple linear regression model was used to link variables.Findings: The study findings indicated a positive correlation between cash transport and financial performance of commercial banks. Cash transport was positively and significantly related to ROA. The study concluded that cash reconciliation is positively and significantly related to financial performance of commercial banks in Kenya,Unique contribution to theory, practice and policy: The study recommends that commercial banks and other financial institutions involved in handling of cash should have a cash transport policy which clearly stipulates how cash in transit should be handled, regularly review the contracts of companies which transport cash for them so as to avoid known routines, have tracking devices in the vehicles that transport cash, engage administrative police in security arrangements when transporting cash and invest in cash in transit measures like chase cars. The study recommended further studies to establish the effect of cash handling practices on financial performance of other financial institutions other than commercial banks. This will be crucial in comparison of the results and identification of more research gaps for future studies.