Abstract:
The objective of the study was to establish the effects of Environment Uncertainty on performance of banks, to evaluate the effects of government policies and regulations on performance of commercial banks in Kisii. The study was based on Resourced based View, Institutional Theory, Diffusion Theory of Innovation and Social cognitive theory. A descriptive design was used for the study. The unit of analysis was commercial banks located in Kisii town and the unit of observation was Branch Managers department, Sales and Marketing department, Loan and recovery departments, customer service departments, operation departments and Credit department. Census sampling was used to sample all the population. The study used semi-structured questionnaire to collect primary data. The data collected was analysed using Statistical Package for Social Science (SPSS) Version 24. Data was analysed both descriptively and inferentially to determine both the trend and significance of relationships. The findings observed that the environmental uncertainty had a significant positive effect p<. 05 on bank performance among commercial banks in Kisii County. It was concluded that that environmental uncertainty has a positive significant influence on performance of commercial banks in Kisii County Kenya. Based on the study findings, the study recommends that commercial banks need to take a note on the external factors such as environment uncertainties and make strategic plans on how to navigate through since they it has been established that it plays a significant effect on bank performance in the study area. Even though the organization may not have direct control over these factors but they should not be forgotten in the master plan this was fully evidenced by the outbreak of the pandemic disease which broke up in the year 2019, if these factor would have been considered then the banking sector would have not realized the loses.
