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The major objective of this study was to assess the relationship between corporate social
responsibility (CSR) activities and financial performance (FP): case of CRDB bank
Mbeya branch. Specific objectives for the study were; to assess CSR activities the bank
offers to the community, to examine the relationship between expenditure on CSR
activities and Financial Performance measured by deposits, loans & advances, pre-tax
profit and after-tax profit and to identify the challenges to CSR activities. In carrying out
this study, corporate social responsibility CSR spending was independent variable while
dependent variables were deposits, loans & advances, pre-tax profit and after-tax profit as
measure of financial performance of a bank.
The study used Purposive sampling technique and Convenience sampling technique
during the process of data collection from the study respondents of which a sample of 120
respondents was selected. Data were collected using both Primary and Secondary sources
(documentary review and questionnaires). Statistical Package for Social Sciences (SPSS)
was used to analyze data where statistical tools applied were correlation analysis,
percentages and trend analysis.
The data were analyzed and results indicated that; there are different types of CSR
activities the bank is providing to the community in Mbeya city and that there was intercorrelation
between independent variable CSR spending/expenses and dependent
variables (bank deposits, loans & advances, pre-tax profit and after-tax profit) at CRDB
Mbeya branch. The study concluded that since the independent variable (CSR spending)
found to be highly correlated to dependent variables (bank deposits, loans & advances,
pre-tax profit and after-tax profit), then CSR activities is positively related with financial
performance of CRDB Mbeya branch. For the challenges facing CSR, the results
indicated high costs in provision of CSR activities, CSR provided is basing in urban areas
while excluding remote areas like in villages, some organizations are not willing to
engage in CSR activities, lack of enough knowledge about the importance CSR activities
to the community and less funds are budgeted for and approved to provide CSR activities.
The study recommended that, CRDB should continue engaging into CSR activities
specifically in remote areas where currently is not covered by any CSR activity. |
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