Strategic Partnerships and Performance of Commercial Banks in Nairobi City County, Kenya

Abstract

Purpose: This research was to explore how strategic partnerships impact bank performance in Kenya, specifically focusing on evaluating the effect of these partnerships on the performance of commercial banks within Nairobi City County.

Methodology: The research utilized a mixed-methods design combining quantitative and qualitative approaches. The study employed structured questionnaires to gather quantitative data from 108 branch managers and operational managers. Qualitative insights were obtained through semi-structured interviews with 38 Chief Executive Officers. Stratified random sampling was used to select participants. Data collection adhered to ethical guidelines and included a pilot study to test the instruments for reliability and validity. Quantitative analysis involved descriptive statistics, correlation, and regression analyses, while qualitative data were thematically analyzed for comprehensive insights.

Findings: The study on strategic partnerships within commercial banks in Nairobi City County revealed high respondent agreement on their importance, with the highest mean score of 4.16 (SD = 0.69) for proactive engagement in partnerships. A simple linear regression analysis demonstrated a strong positive correlation (R = 0.653) between strategic partnerships and bank performance, explaining 42.7% of the variance (R² = 0.427). The relationship was statistically significant (F(1,184) = 137.842, p < 0.001), with an unstandardized coefficient of 0.585, indicating that each unit increase in strategic partnerships leads to a 0.585-unit increase in performance. Overall, these findings underscore the critical role of strategic partnerships in enhancing bank performance in a competitive environment. Unique Contributions to Theory, Policy and Practice: The study provides critical insights for banking leaders, policymakers, and academic scholars regarding the importance of strategic partnerships for enhancing strategic flexibility and fostering sustainable growth in the banking sector. It also offers practical recommendations for commercial banks in Kenya to actively pursue strategic partnerships and enhance their responsiveness to market trends