CORPORATE SOCIAL RESPONSIBILITY ON FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN NAKURU TOWN, KENYA

Abstract

Corporate social responsibility is a way of giving back to the society by the businesses as a way of appreciating the society who are their consumers as well. By doing so, the corporations gain by having favorable public view thus in a way increase their profitability by having more consumers consume their products. The main objective of the study was to establish the effects of CSR on financial performance of commercial banks in Nakuru with focus on education and health activities. This study adopted social cost agency and relational theory. Primary data was used which was collected by use of questionnaires. Using descriptive research design, the study tested for a linear relationship between corporate social responsibility and financial performance. The target population was the Chief Finance Officers and managers in commercial banks in Nakuru town. Data analysis was done using descriptive and inferential statistics, and the findings presented using tables. The study concluded that scholarships that commercial bank have provided to needy students has increased financial performance of the bank. Yet, it was also concluded the efforts that the bank has made in sponsoring community education has increased customers desire to continue banking with the bank. The study further inferred that most customers like being associated with the bank due to it support in buying books for school libraries in the area and bank support in construction of classroom blocks most customers often speak to surrounding people about the bank. The study recommended that banks should provide scholarships to the needy students since this will improve banks image which will attract more customers and hence improve their financial performance. It is also recommended that banks should put more resources in sponsoring community education so as to increase customers desire to continue banking with the bank.