Thesis:

Effects of corporate social responsibility on financial performance of commercial banks in Migori county, Kenya

Prior studies have demonstrated that allocating resources towards Corporate Social Responsibility (CSR) initiatives yields advantages for organizations by enhancing consumer views. Nevertheless, there is limited knowledge regarding the impact of various forms of corporate social responsibility (CSR) expenditures on the financial performance of banks, particularly in developing nations such as Kenya. The objective of this study is to investigate the correlation between corporate social responsibility (CSR) investment and the financial performance of commercial banks in Migori County, Kenya. It specifically analyzes the effects of establishing financial literacy initiatives, employee volunteering, educational sponsorships, and contributions to community health programs on bank performance. The study is based on the principles and concepts of Social Cost Theory, Stakeholder Theory and Agency Theory. The study employs a descriptive research approach, specifically targeting 10 commercial banks located in Migori town. The sample consists of 135 employees distributed across different departments. A total of 49 respondents were given questionnaires, and the data analysis involved the use of descriptive and inferential statistical techniques. A census methodology was utilized to engage all 10 branch managers in this investigation. Data collection was expedited by distributing questionnaires to 49 participants, thus allowing for quantitative analysis. After collecting the data, we employed both descriptive and inferential statistical methods. The study discovered that the involvement of employees in volunteering activities within the community, such as supporting community health initiatives, education programs, and providing financial literacy, had a substantial impact on the financial success of these commercial financial institutions. The study found that these corporate social responsibility (CSR) activities and programs have an impact on the connection between enterprises and their stakeholders, including suppliers, clients, and the donor community. Furthermore, CSR activities and programs also improve corporate reputation and increase sales. In order to enhance the visibility and improve the coordination of corporate social responsibility (CSR) initiatives, it is imperative for commercial banks' management to augment the financial resources allocated to the CSR fund. The report suggests that the existing Corporate Social Responsibility initiatives should be broadened to address increasing societal concerns. Additionally, it proposes involving a larger number of employees and extending the program's reach outside Migori County.