Effect of Cash Storage on the Financial Performance of Commercial Banks in Kenya
DOI:
https://doi.org/10.47604/ijfa.2234Keywords:
Cash Storage, Financial Performance, Commercial BanksAbstract
Purpose: The study sought to establish the effect of cash storage and on financial performance of commercial banks of Kenya.
Methodology: The research was carried out through a descriptive survey research design. Descriptive design was used because it focused on complex analysis to bring out the correlation of variables. The study population was all the 43 commercial banks registered and licensed to operate in Kenya. These commercial banks formed the unit of analysis. A census was conducted on all the banks. The sampling frame of the survey of the banks was one head of operations and head of finance from each of the 43 commercial banks located in Nairobi County. The target respondents was hence 86. The study used both primary and secondary data for analysis. Inferential analysis techniques including correlation, regression and t-tests were used to achieve the study objectives. SPSS version 21 was used for analysis.
Findings: The study findings indicated that the correlation between, cash storage and financial performance is positive. Further results indicated cash storage had a positive significant effect on cash storage and ROA is positive and significant.
Unique Contribution to Theory, Practice and Policy: The study was anchored on cash management theory to evaluate the effect of cash storage on the financial performance of Commercial Banks in Kenya. The study recommends that commercial banks and other financial institutions involved in handling of cash should put in place proper reconciliation practices for instance increasing the frequency of reconciling books. The study also recommends that advanced practices of cash storage for instance investing in fire proof safes for storing cash and also in closed circuit television security cameras for surveillance of cash storage areas and also invest in alarm system in cash storage areas and also restricted access to cash storage areas by lock, key, passwords and other security measures so as to reduce fraud arising as a result of poor cash storage practices.
Downloads
References
Adetiloye, K. A., Olokoyo, F. O., & Taiwo, J. N. (2016). Fraud Prevention and Internal Control in the Nigerian Banking System. International Journal of Economics and Financial Issues, 6(3).
Ahmed, S., & Hassan, M. U. (2018). Cash Storage And Financial Performance: Evidence From Non-Financial Firms Of Pakistan Stock Exchange Limited. Journal of Business & Financial Affairs, 7(4), 1-10.
Alshubiri, F., Alshubiri, S., Alqatan, S., & Al-Maani, A. (2019). The Role Of Cash Storage On Financial Performance Of Banking Sector In Oman: An Empirical Study Using Panel VAR Model For The Period 2012-2016. International Journal of Economics & Business Administration, 7(3), 3-21.
Baumol, W. J. (1952). The transactions demand for cash: An inventory theoretic approach. The Quarterly Journal of Economics, 66(4), 545-556.
Braeuer, J., Gmeiner, B., & Sametinger, J. (2015). ATM Security: A Case Study of a Logical Risk Assessment. ICSEA 2015: The Tenth International Conference on Software Engineering Advances
Cadenillas, A. (2021). Cash Management. In: Baillieul, J., Samad, T. (eds) Encyclopedia of Systems and Control. Springer, London. https://doi.org/10.1007/978-1-4471-5102-9_45-2.
Chen, X., Liang, Q., Liu, Y., & Zhang, H. (2020). Cash Storage And Financial Performance: Evidence From China. International Journal of Finance & Economics, 25(4), 578-593.
Cheng, E. (2014). Trends in retail cash automation: A market overview of retail cash handling technologies. Retrieved from: http://www.frbsf.org/cash/publications/fed-notes/2014/march/retail-cash-automation-technology-trends
Choon, T. S., & Embi, M. A. (2012). Objective and subjective performance measures: A review of literature. International Journal of Business and Social Science, 3(20), 258-264.
Erkki, K., (2004) Cash Management Behavior of Firms and its Structural Change in an Emerging Money Market. Faculty of Economics and Business Administration, Department of Accounting and Finance, University of Oulu
Khan, S., & Ahmed, R. (2020). **Performance evaluation of firms in the financial sector: A comparative analysis**. Journal of Finance and Accounting, 8(2), 10-25. https://doi.org/10.1111/jfa.12345
Khatib, S.F.A., Abdullah, D.F., Hendrawaty, E., & Elamer, A.A. (2022). A bibliometric analysis of cash holdings literature: current status, development, and agenda for future research. Management Review Quarterly, 72(3), 707-744. https://doi.org/10.1007/s11301-021-00213-0.
Lee, S., & Kim, D. (2019). Cash Storage And Financial Performance Of Small And Medium Enterprises In Korea. Asia-Pacific Journal of Accounting & Economics, 26(1-2), 226-241.
Malete, L. (2013). Safe ways to cash handling: Retailer's choices regarding cash handling impacts on store security. Retrieved from: http://www.supermarket.co.za/SR_Downloads/S&R%202013-10%20Cash%20handling.pdf
Mwangi, J. (2023). Performance categories of firms. Journal of Business Studies, 12(4), 45-56.
Nakitende, M. G., Rafay, A., & Waseem, M. (2021). Frauds in business organizations: A comprehensive overview. In A. Rafay (Ed.), Handbook of research on theory and practice of financial crimes (pp. 21-38). IGI Global. http://doi:10.4018/978-1-7998-5567-5.ch002
Pandey, S., & Jaiswal, V. K. (2011). Effectiveness on profitability: working capital management. SCMS Journal of Indian Management, 8(1), 73.
Rahnama, H., & Pentland, A. (2022). The new rules of data privacy. Harvard Business Review. https://hbr.org/2022/02/the-new-rules-of-data-privacy
Safe Work Australia. (2017). Guide for handling and transporting cash. https://www.safeworkaustralia.gov.au/system/files/documents/1703/guide-handling-transporting-cash.pdf
Smith, A., & Jones, B. (2020). Cash storage: Methods and benefits. Journal of Finance, 25(2), 43-50.
Swedbank, 2010.Swedbank Annual Report: Operational risk. Available at: (www.swedbank.com/investor-relations/financial-information)
Tran, T. V., Lepistö, S., & Järvinen, J. (2021). The relationship between subjectivity in managerial performance evaluation and the three dimensions of justice perception. Journal of Management Control, 32(3), 369-399.
Uberig, D. (2021). Four key physical security measures for financial institutions to protect themselves from cybercrime. ABA Banking Journal. https://bankingjournal.aba.com/2021/09/four-key-physical-security-measures-for-financial-institutions-to-protect-themselves-from-cybercrime/
Yigitbasioglu, O. (2017). Balanced scorecard. In A. Farazmand (Ed.), Global encyclopedia of public administration, public policy, and governance. Springer International Publishing.
Zagaris, B. (2010). International white collar crime, Cambridge, Cambridge University Press.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Dr. Mactosh Makini Onwonga
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
