Volume 08 Issue 04 April 2025
1Stephen Ndegwa Nderitu, 2Dr. Gordon Opuodho
1,2School of Business, College of Human Resource and Development, Jomo Kenyatta University of Agriculture and Technology, Kenya
1ORCID ID: 0009-0004-0869-1050
2ORCID: 0009-0007-9560-2117
DOI : https://doi.org/10.47191/ijsshr/v8-i4-05Google Scholar Download Pdf
ABSTRACT
Financial innovation is a process with no certainty thus the need for it to be introduced to the market as the diminishment of costs and the reduction of chance exposure as part of a financial function. Credit risk the probability of the expected pay back on a speculation or lending will differ from expectations. The aim of the study was to establish the effect of financial innovation mainly Mobile money innovation and Internet banking innovation have on Non-performing loan ratio as a credit risk of commercial banks in Kenya, focusing on the operational main forty two commercial banks that were registered from 2013 to 2022 that were the target group that formed the unit of examination. Secondary data was utilized from the readily available data from yearly distributed monetary reports, Central Bank of Kenya (CBK). From the research findings Mobile money innovation and Internet banking innovation had a positive influence on non-performing loan ratio of commercial banks in Kenya. Literature on the association of innovation and credit risk is available. Researchers from different backgrounds and areas have vastly examined the vast aspects of innovation and credit risk. But most fail to elaborate or indicate and are focused on innovation and credit risk as dependent variables and also the influence innovation has on credit risk. The implications of the study on theory, policy and practice. The research findings add to the solidification of the present body of literature by affirming that organizational resources influence credit risk of commercial banks.
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