Partial fulfillment for the award of Masters of Business Administration

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It was found necessary to undertake this study so as to bridge the knowledge gap on
fighting Money Laundering in Kenya using Regulatory policies. Money laundering
has been identified as a major impediment to development in most countries and
financial institutions have been identified as the main transmission channel used by
money launders.
The objective of the study was to examine the Regulatory mechanisms that Kenya has
adopted in dealing with Money Laundering and to suggest ways of enhancing the
effectiveness of these mechanisms to serve as veritable models for other African
states. Two research questions relating to the primary research objectives have been
determined.
The study focused on the nine Banks listed on the Nairobi Stock Exchange (See
Appendix II). The study respondents were the Compliance Heads of the listed banks.
In addition, the study has also included two telecommunication service providers that
are licensed to undertake money transfer services. These are: - Safaricom and Zain.
The study utilized a qualitative technique in the collection of secondary and primary
data. A semi-structured questionnaire (having both open and closed questions) was
used in collecting data. The information was presented and discussed as per the
objectives and research questions of the study. The seven Propositions that had been
formulated were confirmed by a majority of the respondents.
Findings of the study indicates that majority of the Financial Institutions have adopted
the main core principles of the Financial Action Task Force (FATF) 40
recommendations. The factors influencing adoption of money laundering practices in
Kenya was identified mainly as the respective organisations corporate governance
policies (Ethical practices). Results further suggests that the challenges faced in
implementation of money laundering regulatory policies among financial institutions
in Kenya are mainly: Structural Displacement factors (i.e. cash based economy, lack
of cooperation by countries due to different legal systems, Inadequate resources to

control porous borders and corruption); Legal and institutional framework challenges
and to some extent the Perceived Cost of implementing an AML regime.