Effect of Interest Rates Spread on Performance

Banks being strategic in constituting a large share of money that is used in every day transactions (money circulation) need to be effective, efficient and competitive in their operations. Interest rates spread, as sensitive economic variable, ought to be adequately harmonized to assure the savers get the best returns on their savings while borrowers similarly get rates appropriate to their investments. This user-friendly book enables research students pursuing MBA to comprehend the effect of interest rates spread on the performance of banking industry in Kenya. The descriptive research design, using a systematic random sampling technique, was utilized from fifteen selected commercial banks in Nairobi. The findings showed that Central Bank regulations, credit risk and macro-economic environment played a major role in influencing the extent of interest rates spread; thus providing sufficient margins for banks to continue operating in the market.