MST-Department of Accounting and Finance
Permanent URI for this collection
Browse
Recent Submissions
Item Working Capital Management and Financial Performance of Non-Deposit Taking Savings and Credit Co-Operative Societies in Kiambu County, Kenya(Kenyatta University, 2024-11) Mwangi, Peter MuthakaWorking capital is a vital element of finance as it influences the liquidity and financial performance through short term assets and liabilities. Despite this, most of the previous studies carried out in corporate finance has been international and has focused on Leverage, Capital Budgeting, Dividend policy and Valuations giving little attention to working capital management. Locally, very little information is documented on working capital management. Some past researchers arrived at contradictory findings on the topic. The study sought to resolve some of these contradictory findings. To achieve this objective the study closely looked into the effects of each of the component of working capital on financial performance of Non-deposit taking Savings and credit Societies in Kiambu County. The study was anchored on cash conversion Theory, Agency Theory and Anticipated Income Theory. The study adopted descriptive research design. The population for the study was all the Non-deposit taking Savings and credit Societies in Kiambu County registered at the County’s Director of Co-operatives office as at 31st December 2023. At the time of the study there were 145 active Non-deposit taking Savings and credit Societies in Kiambu County from which a stratified sample of 105 was drawn. The study used primary and secondary data. The research instrument was pretested for both content and construct validity.A self administered questionnaire was used to collect primary data while a data abstraction form was used to collect secondary data for the five years to 2023. Due regard was given to research ethics in that participants were informed of the value of the study and the data they provided was to be treated in strict confidence. Response rate was seventy percent Data was coded, edited and analyzed using descriptive statistics, correlation analysis and multiple regression analysis. The results are presented in the form of tables.. The study established that Cash Management and Accounts Receivable Management have no significant negative relationship with Financial Performance while Accounts Payable Management has insignificant positive relationship with Financial Performance. The findings from Multiple Regression Model indicate R square value of 0.927 indicates that 92.7 % of the variance in Dependent Variable (Financial Performance) is explained by the variance in the Independent Variables. Holding all the Independent Variables at zero, Financial Performance will be 4.636. Taking the Dependent Variable to zero; a unit change in Cash Management will lead to 0.529 decrease in the Financial Performance; a unit change will lead to 13.67 decrease in Financial Performance will lead and finally a unit change in Accounts Payable Period will lead to 13.62 increase in Financial Performance. Diagnostic tests for linear Regression,linearity homoscedasticity were carried out using Durban Watson statistic and P-plot respectively. Managers should always strife to have an optimal balance between liquidity and profitability because by having too much cash they forego returns that would have been earned by the idle cash in the money market. Also the average collection period should be as short as possible in order to release funds for further lending. Managers should have creditors’ policy to ensure fairness in the payment of creditors. Ideally creditors’ accounts should be settled on first in first out basis. Though a long accounts payment period may make a lot of sense from finance perspective, unwarranted delay in paying creditors may ruin their reputation.Item Macroeconomic Dynamics and Profitability of Insurance Firms Listed at Nairobi Securities Exchange, Kenya(Kenyatta University, 2024-10) Muteru, Milka W.The insurance sector is essential to economic growth, resource allocation, liquidity creation, scale economies in investments, and loss distribution. Kenya’s insurance industry has been growing steadily since 2013, with premium revenue and capital investment increasing. However, Return on Assets has declined over the past four years and reached an all-time low in 2022 compared to the previous five years which was partly attributed to the reforms introduced to cater the impact of Corona virus pandemic on and the need to close infrastructure gaps. The expenditure ratio has increased over the past four years, showing that the general insurance underwriting expenses have gone up without the premiums for those risks being up in line. Firm profitability rises during economic expansions while it falls during recessions. As a result, as gross domestic product grows, firm deposits and loans rise along with interest income and loan losses. The purpose of the study was therefore to examine the effect of macroeconomic dynamics on the profitability of insurance firms listed on the Nairobi Securities Exchange in Kenya. The specific objectives of the study were; to investigate how Exchange Rates affect the profitability of insurance companies that are listed on NSE, to determine how interest rates affect the profitability of insurance companies listed on NSE and to ascertain how inflation affects the profitability of insurance companies listed on NSE. The study was conducted based on the theoretical frameworks of purchasing power parity, deflation, and the balance of payment, the classical theory of interest, and the balance scorecard model. The study employed an explanatory research approach and focused on the six insurance firms that were listed on the NSE. A survey was done to list the insurance companies listed on the Nairobi Securities Exchange in Kenya. The data collecting for this inquiry involved using secondary data sheets. The data was collected from the official audited financial accounts of the insurance companies for the fiscal years 2016 to 2022. The process of data analysis encompassed both descriptive and inferential analysis. The inferential analysis included both correlation analysis and panel regression analysis. The model's predictions were verified by diagnostic testing. The multicollinearity, normalcy, linearity, Hausman test, homoscedasticity, and autocorrelation tests were among them. The research complied with the anticipated ethical standards. The study found that key macroeconomic dynamics had significant impact on the profits of insurance companies listed on the NSE, explaining fifty-seven point seven one percent of the changes in profits. It discovered that while changes in the exchange rate do not significantly affect profits, higher interest rates lead to higher profits, and inflation negatively impacts profits. In view of the findings, the study recommends that insurance company management, should strive to develop robust risk management strategies that can effectively mitigate the impact of macroeconomic dynamics, such as exchange rate fluctuations, interest rate changes, and inflation. Additionally, policy-makers should consider implementing policies and regulations that promote stability and predictability in macroeconomic dynamics. Providing a conducive environment for stable exchange rates, interest rates, and inflation can help insurance firms plan and strategize effectively.Item Technology Adoption and Financial Inclusion among Youth Operated Businesses in Nairobi City County, Kenya(Kenyatta University, 2024-09) Nyokwoyo, Douglas OusoFinancial inclusion is the cornerstone of savings and investment initiatives among the youth .When many people are financially included, they possess greater access to credit from financial institutions and can create and expand investment opportunities. In addition, the inclusion of youth in financial systems can improve access to financial education and planning, which increases employment opportunities and ensures that previously marginalized and alienated youth are reintegrated into the economy. The purpose of this study was to evaluate the effect of financial technology and literacy on the financial inclusion of youth owned businesses in Nairobi's central business district. Specifically, the study aimed to determine the effect of mobile phone usage, internet usage, agency services, and credit information sharing and test moderation effect of financial literacy. The study was founded on the theories of asymmetry, agency, and financial growth. The researcher targeted a large population of approximately 32100 youth operated business enterprises in Nairobi County, Kenya. Slovin’s formulae was used to select 500 respondents aged between 20 and 35 years, per the definition of youth by the Department of youth affairs. The researcher employed a descriptive research methodology. Using open-ended questionnaires, primary information was collected. The researcher conducted an initial inquiry to evaluate the dependability of the research instrument with the objective of determining the instrument's viability. The data analysis procedure was enhanced by employing (SPSS) version 23.0. The findings were presented using diagrams, charts, and tables. The research discovered that the utilization of mobile phones, access to the internet, and the provision of agency services have a noteworthy impact on enhancing the financial inclusion of young individuals. Conversely, the sharing of credit information does not exhibit a substantial influence on the aforementioned outcome. Moreover, the mediating impact of financial literacy was also statistically insignificant. The research findings suggest that the achievement of financial inclusivity for enhancing the participation of young individuals in economic frameworks is facilitated by the utilization of cellular devices, the utilization of online technology, the utilization of services through intermediaries, and the acquisition of financial literacy. Therefore, the formulation of strategies aimed at enhancing financial inclusivity among the youth in Nairobi should prioritize the enlargement of entry and amplification of financial technology solutions.Item Prevalence of Drug Abuse among Muslim Students in Public Secondary Schools in Mombasa County, Kenya.(Kenyatta University, 2024-07) Mohamud, MwanaishaFinancial inclusion is the cornerstone of savings and investment initiatives among the youth .When many people are financially included, they possess greater access to credit from financial institutions and can create and expand investment opportunities. In addition, the inclusion of youth in financial systems can improve access to financial education and planning, which increases employment opportunities and ensures that previously marginalized and alienated youth are reintegrated into the economy. The purpose of this study was to evaluate the effect of financial technology and literacy on the financial inclusion of youth owned businesses in Nairobi's central business district. Specifically, the study aimed to determine the effect of mobile phone usage, internet usage, agency services, and credit information sharing and test moderation effect of financial literacy. The study was founded on the theories of asymmetry, agency, and financial growth. The researcher targeted a large population of approximately 32100 youth operated business enterprises in Nairobi County, Kenya. Slovin’s formulae was used to select 500 respondents aged between 20 and 35 years, per the definition of youth by the Department of youth affairs. The researcher employed a descriptive research methodology. Using open-ended questionnaires, primary information was collected. The researcher conducted an initial inquiry to evaluate the dependability of the research instrument with the objective of determining the instrument's viability. The data analysis procedure was enhanced by employing (SPSS) version 23.0. The findings were presented using diagrams, charts, and tables. The research discovered that the utilization of mobile phones, access to the internet, and the provision of agency services have a noteworthy impact on enhancing the financial inclusion of young individuals. Conversely, the sharing of credit information does not exhibit a substantial influence on the aforementioned outcome. Moreover, the mediating impact of financial literacy was also statistically insignificant. The research findings suggest that the achievement of financial inclusivity for enhancing the participation of young individuals in economic frameworks is facilitated by the utilization of cellular devices, the utilization of online technology, the utilization of services through intermediaries, and the acquisition of financial literacy. Therefore, the formulation of strategies aimed at enhancing financial inclusivity among the youth in Nairobi should prioritize the enlargement of entry and amplification of financial technology solutions.Item Budgetary Controls and Financial Expenditure among Tier One Commercial Banks in, Nairobi County, Kenya(Kenyatta University, 2024-11) Maina, John KaranjaThis study examined the influence of budgetary control practices on financial expenditure among Tier 1 commercial banks in Nairobi County, Kenya. Specifically, it investigated the effects of budget planning, cash management, and audit control on financial outlays. The research was grounded in Agency Theory, Resource Dependency Theory, and Institutional Theory. A quantitative methodology was employed, utilizing a cross sectional survey design. The study targeted a purposive sample of Tier 1 commercial banks in Kenya. Data was collected through self-administered questionnaires and analyzed using both descriptive and inferential statistical techniques. The findings revealed that budget planning, cash management, and audit control practices all had significant positive influences on financial expenditure in Tier 1 commercial banks. A strong positive correlation was found between these budgetary control practices and financial expenditure. Collectively, these practices explained 58.2% of the variation in financial expenditure. The study concluded that effective budgetary control practices were critical in managing financial expenditure in Tier 1 commercial banks. It recommended that banks strengthen their budget planning, improve cash management, and enhance audit control practices to manage financial expenditure more effectively and improve overall financial performance. This research contributed to the academic literature by providing empirical data on budgetary control practices in the Kenyan banking sector. It also offered practical insights for bank managers and policymakers in crafting robust financial management strategies. The study suggested areas for future research, including investigating other budgetary control practices and exploring their impact in different sectors of the economyItem Financial Deepening and Growth of Small and Medium Enterprises in Kiambu County Kenya(Kenyatta University, 2024-10) Gachiengo, Evelyne WanguiSMEs are important components in spearheading Kenya’s Economy however, initiatives to ensure they are running smoothly without fail still remain partially contested. Most Micro, Small and Medium Enterprises (MSMEs) in Kenya are facing a mixture of success and failure with statistics indicating that three out of five businesses do not celebrate their fifth birthday. Getting financial backing from banks and government agencies without security or financial history has made it hard for enterprising and innovative young people to venture into businesses due to lack of start-up capital. Thus, to ensure SMEs survive in the competitive market, financial markets are required to enhance access to credit, savings platforms and capital build up that lead to their growth. The overall objective of this study was to investigate the effect of financial deepening on growth of SMEs in Kiambu County Kenya. The specific objectives were to determine effect of interest rates, collateral and financial regulations on growth of SMEs in Kiambu County. The study was based on four theories namely lender-based theory of collateral, loan pricing theory, financial intermediation theory and classical growth theory. A causal research design was used and the targeted population comprised of 284 SMEs that are able to access government procurement opportunities in Kiambu County Government as they meet the legal requirements to operate. The study adopted a stratified random sampling method to select a sample of 166 SMEs and a structured questionnaire was administered to all the 166 SMEs. Both descriptive and inferential statistics were used to analyse the primary data collected with the aid of SPSS. The descriptive statistics involved computation of frequencies, percentages, mean and standard deviation while inferential statistics included correlation and regression analysis. The study also used multiple regression analysis to analyse the data to establish individual and combined effect of predictor variables, that is, interest rates, collateral and financial regulations on growth of SMEs and the results were presented in tables. The study conformed to ethical guidelines of confidentiality, free participation and strict adherence to privacy policy during and after data collection. The study found out an R2 of 0.787 which translates to 78.7 % of variations in growth of SMEs in Kiambu County were influenced by financial deepening components (interest rates, collateral and financial regulations). The findings also revealed that interest rates and collateral had a negative and significant effect on SMEs growth. Contrarily, financial regulations had a positive and insignificant effect on SMEs growth. Thus, study recommends that National Treasury and Central Bank of Kenya to undertake robust monetary and fiscal policies that would lead to lowering interest rates in the country. Financial institutions should lend based on risk other than use of collateral. Moreover, financial institutions should embrace high levels of investment in innovation of money supply to increase capital flows to the real sector of the economy to trigger SMEs growth. Since an adjusted R square of above 0.7 or 0.8 is considered as reasonably good fit, this made the predictive power of the predator variables in the study to be more accurate. Therefore, the study further recommends that both the government and financial institutions should focus on ensuring that all the components that characterises financial deepening are revised to ensure individual’s ability to sustainably access and afford various financial services conveniently. Additionally, the study also recommends replication of this study in other Countys across different counties in Kenya and in other sectors so as to add more empirical evidence on impediments that prevent the Kenyan SMEs from reaching their full potential.Item Financing Decisions and Financial Performance of Manufacturing Firms Listed at Nairobi Securities Exchange, Kenya(Kenyatta University, 2024-11) Gitahi, Esther WanjuguOver the past five years, the manufacturing industry in Kenya has have been performing poorly. Losses have been reported by some of the industrial corporations. The analysis of the inquiry looked at how financing choices affect the performance of NSE listed manufacturing companies. The study specifically looked at the impact of dividend, investment, and liquidity decisions on financial performance of manufacturing corporation in NSE, Kenya. The theories that informed this study included; Bird in Hand theory, the general theory of employment, liquidity preference theory and financial distress theory. An explanatory research design. The study used a census on ten manufacturing firms. The ten firms are going to be targeted as a result of they need systematically been listed at NSE since 2012 while not missing any year. The study won't contemplate the corporations that don't seem to be listed at any specific year between 2012 and 2021. When information assortment of information from the producing firm, before being used for analysis, they checked, sorted, and amended. Outcomes depicted that liquidity decision had a satisfactory and important effect on performance (β= 0.088, p=0.003). Outcomes depicted that dividend decision had a satisfactory and important consequence on financial performance (β= 0.073, p=0.032). In addition, outcomes depicted that investment decision had a satisfactory and important consequence on performance (β= 0.021, p=0.002). In conclusion, larger industrial companies typically pay higher dividends because, given their scale, they can obtain external funding more easily and rely less on internal resources. The study concluded that manufacturing companies invest in capital and other fixed assets like manufacturing facilities and equipment that are anticipated to be productive for a long time. Among the sources of capital investment are banks, financial institutions, venture capital, equity investors. In addition, liquidity is a crucial component of asset management and is crucial to a company's ability to operate profitably; as such, It should be optimally utilised and maintained to guarantee that businesses regularly fulfil their responsibilities when they become due. A strong dividend policy that may increase manufacturing companies' levels of return on assets and draw in investors should be in place for those listed on the Nairobi Securities Exchange. The report suggested that in order to increase their income base, companies listed on the NSE that are in the manufacturing and related sectors should invest in product diversification strategies. Since the performance of manufacturing enterprises is directly impacted by investment decisions. Subsidies for manufactured goods should be taken into account by the Kenyan government as a policy through the yearly budget proclamations. It is recommended that managers closely monitor the firm's liquidity, take on projects with positive net present values, and generate cash flow to support their investment and operational endeavoursItem Mobile Payment Services and Financial Performance of Local Businesses in Kiambu County, Kenya(Kenyatta University, 2024-11) Mbugua, Eric Kimani; Mark SuvaMobile payments are a critical emerging mode of financial transactions in the business environment. Local business owners in Kiambu County have faced marginalization from traditional banking, with businesses in these regions lacking access to formal financial services due to factors such as low cash flow levels, lack of collateral and low incomes. Customers have lacked the convenience of transacting with their money in the traditional banks or incurring more costs in accessing their money. Local business owners, customers, and other stakeholder have encountered rigidity in making payments in their daily business operations. Money is transferred to their bank accounts or registered institutions, which is wired to the seller accordingly. Therefore, the current study investigated the effect of mobile payment services on the financial performance of local businesses in Kiambu County, Kenya. The specific objectives of the study investigated the effect of mobile money transfers, online transactions, and mobile payments on the financial performance of local businesses in Kiambu County, Kenya. The period between 2016 and 2022 becomes then the time scope for the study, where the sales records in the country were at their peak. The study was anchored on agency theory, contingency, the technological acceptance model, and innovation diffusion theory. The study employed a descriptive research study design to explore the sub-variables. A sample size of 157 respondents from the local businesses in Kiambu were targeted. Validity and reliability of the research instruments was considered during the pilot study for 20 respondents, that were not involved in the parent study. The reliability analysis showed that all the study variables met the threshold Cronbach value of 0.70, which was the established regression model. Ethical concerns of confidentiality, anonymity, justice, and fairness were ensured. Quantitative data were examined using descriptive and inferential statistical methods and presented in tables and figures, while qualitative data were examined through content analysis. The statistical package for social sciences was utilized to extract the descriptive and inferential statistics. The analysis of demographic information demonstrated a fair representation of both genders, designations to various positions in the local businesses, and various levels of experience dealing with local businesses in Kiambu County, Kenya. The findings indicated a meaningful positive and significant relationship between financial performance and mobile money transfers, online transactions, and mobile payments. Regression analysis suggests that mobile money transfers, online transactions, and mobile payments together account for 52.8 percent of all the variations in the financial performance of local businesses in Kiambu County, Kenya. The study determined mobile payment services to have significantly impacted the financial performance of local businesses in Kiambu County. The study recommended that businesses should effectively make use of mobile payment services based on the era of technological advancement. Secondly, policy makers and relevant sector-specific regulators should establish appropriate policies that allow for portability of mobile payment services.Item Profitability, leverage, efficiency and financial distress in commercial and manufacturing state corporations in kenya(Kenyatta University, 2025-11) Njoroge, Kibe PeterSince attainment of independence to date, the Government of Kenya has heavily funded and invested in various State Corporations. In spite of this State funding, Commercial and Manufacturing State Corporations continue to struggle financially and have resorted to the Government for debt bailouts and on many occasions, the accumulated losses have eaten up these State Corporations, leaving huge loans that are paid from the exchequer. In recent years, the Government of Kenya has spent billions of shillings to fund the recovery of various cash strapped State Corporations which have not been able to honour their debt obligations. The increased number of State Corporations facing financial crisis in the recent past therefore prompted this study. The major goal was to investigate effect of profitability, leverage, and efficiency on financial distress in Commercial and Manufacturing State Corporations in Kenya. Consequently, specific objectives included; determine effect of profitability on financial distress; analyse effect of leverage on financial distress and to establish effect of efficiency on financial distress in Commercial and Manufacturing State Corporations in Kenya. The study also attempted to determine moderating effect of firm size on relationship between profitability, leverage, efficiency and financial distress. The study adopted positivist philosophy that required researcher to be independent of the study. Explanatory nonexperimental research design was used in the study. For the purposes of this study, a census of 25 Commercial and Manufacturing Corporations was employed in study. Study used Secondary data from audited accounts of State Corporations for period 2015-2021 in analysis. Data was obtained from office of auditor general and Kenya Parliament digital library. Researcher used Logit Regression Model to analyse quantitative data. Diagnostics tests included multicollinearity, heteroscedasticity and likelihood ratio and Hosmer-Lemeshow goodness of fit tests. Study used STATA Version 13.10 statistical software to analyse data and findings presented using tables. Results indicated that profitability, leverage and efficiency were statistically significant to financial distress. However, the moderating influence of firm size on the relationship between profitability, leverage and efficiency was statistically non-significant to financial distress. The study recommended that in order to increase profitability, Commercial and Manufacturing State Corporations should improve their operational efficiency and reduce leverage (use of debt) particularly the government guaranteed loans. The study concluded that there is a dire need by State Corporations to reduce reliance on government loans and bailouts by engaging efficiently in profitable ventures that would maximise the wealth of the firm. The study also concluded that profitability, leverage and efficiency were useful ratios to management, those charged with governance and users of financial statement information in detection and mitigation of financial distress. Findings are also useful to the government by providing an insight of distressed firms so that the exchequer can know and make prudent decision on the distressed State Corporations that require financial bailouts.Item Digital Transformation and Quality of Financial Reporting in City County Government, Kenya(Kenyatta University, 2024-07) Chepkorir, FaithThe eagerness of organizations to use technological advancements in order to enhance the quality of their financial reports contributes to a global trend toward the digitization of governmental auditing processes. Failure to undergo digital transformation have resulted in inadequate financial reports from public entities, thereby limiting the ability to hold their management accountable for public resources. In an effort to address this issue, the Nairobi City County Government has implemented policies aimed at ensuring high-quality financial reporting to enhance accountability and transparency. Yet, in spite of these initiatives, there remain deficiencies in the overall level of financial reporting, as demonstrated by a rise in deceptive practices that have reduced public trust in financial reporting in general. Even though empirical research was already in existence emphasizes how crucial digital transformation plays in increasing financial reporting's transparency, several of the aforementioned studies had conceptual shortcomings and are methodologically and contextually insufficient. Therefore, by examining the effects of digital transformation on the financial reporting quality within Kenya's Nairobi City County Government, this study closed these gaps. The specific objective was to explore how big data, block chain, cloud computing, and robotic process automation influence the quality of financial reporting. Furthermore, the research sought to ascertain the moderating impacts of innovation readiness on the link between digital transformation and the quality of financial reporting in the Nairobi City County Government. Diffusion Innovation Theory, Systems Theory, Agency Theory, Technology–Organization–Environment Theory, and Dynamic Capability Theory served as the foundation for this study's theoretical framework. Targeting 287 people who worked in the Nairobi City County Government's finance and economic planning department, the study employed a descriptive and explanatory research design. Probability sampling techniques was utilized to select a sample size of 105 respondents. Structured questionnaires wase used to gather primary data, and an examination of the Nairobi City County Government's numerous financial records yielded secondary data. Using SPSS version 22.0, multiple regression analysis as well as other descriptive and inferential statistics was used to analyze the collected data. Diagnostic tests such as normality, multicollinearity, autocorrelation, and heteroskedasticity was conducted. The study adhered to all ethical considerations throughout its execution. The study concludes that big data technology has a post give significantly high affected on quality of financial reporting in NCCG.Item Mergers and Acquisitions and Financial Performance of Commercial Banks in Garissa County, Kenya(Kenyatta University, 2024-11) Noor, Ahmed MohamedThe general objective of this study was to determine the effect of mergers and acquisitions on the financial performance of commercial banks in Garissa County, Kenya. The specific objectives were to assess the impact of capital adequacy, financial leverage, liquidity size, and asset quality on the financial performance of these banks. The study was guided by financial synergies theory, agency theory, and the "eat or be eaten" theory. A descriptive research design was employed, and the population comprised top management employees of commercial banks in Garissa County. A census of 72 respondents was conducted to form the study's sample size. Both secondary and primary data were collected. Secondary data were gathered from the banks' financial statements, annual reports, and published data. Primary data were collected using questionnaires. The quantitative data collected were analyzed using descriptive statistics, such as means and standard deviations, and were presented using tables, graphs, charts, and figures with the aid of Statistical Package for Social Sciences (SPSS). Content analysis was used for qualitative data obtained from open-ended questions. Additionally, a multiple regression analysis was conducted. The findings revealed that capital adequacy had a significant positive effect on financial performance. Banks with stronger capital bases demonstrated better financial stability and profitability. Diagnostic tests, including regression analysis, confirmed that capital adequacy significantly positively influenced financial performance, highlighting the importance of strong capital bases for stability and profitability. Financial leverage was found to impact performance positively when managed prudently but negatively when excessive, indicating the need for a balanced approach. Liquidity size showed a crucial role in maintaining operational efficiency and managing financial obligations. Finally, asset quality was a key determinant of financial performance, with high-quality assets correlating strongly with better financial outcomes. These results underscored the importance of strategic management in mergers and acquisitions to enhance financial performance through effective capital management, prudent use of leverage, optimal liquidity, and robust asset quality.Item Firm Characteristics, Interest Rate and Financial Performance of Microfinance Banks in Kenya(Kenyatta University, 2024-09) Ouma, Cavine OnyangoKenya has one of Sub-Saharan Africa's most active microfinance marketplaces. Microfinance gives the forte to improve the economic activity of low-income individuals and eliminate poverty, resulting in economic progress. However, microfinance's financial performance in the country has declined over time. With this view, this investigation aims to explore how firm characteristics (capital adequacy, assets quality, managerial efficiency, earning ability and liquidity) with interest rate as the moderating variable that affects the Kenyan performance of microfinance banks financially. The survey was grounded on stakeholders, liquidity preference, financial intermediation, buffer capital, efficiency structure and interest rate parity theories. The study research methodology rested on positivism research philosophy. Research Design was explanatory non-experimental design. Secondary panel data was utilized. 13 microfinance banks in Kenya were target. Information was gathered using secondary data sources from microfinance banks accounting report from 2016 to 2022. Data was descriptively and inferentially analyzed. Descriptive analysis was performed using tendency central measures like mode, mean, skewness, median, kurtosis, maximum and lowest values, and standard deviation. The investigation employed panel multiple regressions and Pearson’s Product Moment Correlation analysis. Diagnostics test such as multicollinearity, normality, autocorrelation, heteroscedasticity and stationary tests were carried out. All ethical considerations were appropriately observed. Findings uncovered that adequacy of capital exerts a notable and direct effect on financial performance, underscoring the importance for microfinance banks in Kenya to prioritize maintaining sufficient capital levels to support their overall stability and financial outcomes. Conversely, quality of asset demonstrates a significant and adverse influence on performance financially, highlighting the need for microfinance banks to enhance their credit assessment processes to ensure the quality of their loan portfolios. The research reveals that efficiency of management has an insignificant direct influence on performed banks financially. To address this, microfinance banks are advised to invest in comprehensive management training programs and capacity-building initiatives to improve operational effectiveness and decision-making processes. Earning ability, on the other hand, exhibits a considerable and direct influence on performance financially. Microfinance banks should thus focus on continuous innovation of their products and services to enhance their earning potential and overall financial outcomes. Liquidity levels exhibit an insignificant and inverse effect on the financial performance outcomes. To mitigate potential risks, microfinance banks should establish comprehensive policies and procedures to monitor and manage liquidity effectively. Interestingly, the study reveals that the connection concerning firm-level attributes and financial outcomes for microfinance institutions in Kenya does not appear to be subject to a substantial moderating influence from interest rate movements. Therefore, the survey recommends that microfinance banks concentrate on improving governance structures, operational efficiency, risk management practices, and asset quality. This can be achieved through capacity-building programs, training initiatives, and adopting best practices from successful microfinance institutions. Strengthening these firm characteristics will enable microfinance banks to enhance their financial performance, irrespective of interest rate fluctuations.Item Mortgage Financing and Profitability of Commercial Banks Listed at Nairobi Securities Exchange, Kenya(Kenyatta University, 2024-06) Mwale, Wilson OyeyeIn Kenya, commercial banks have experienced dwindling profitability in the recent past. The commercial banks’ growth rate in profitability recovered in 2021 following the continuing decline experienced in the recent years that closed in a negative growth rate in the year 2020. This necessitates the need to understand the factors leading to reduction in profitability in the banking sector. Empirical evidence shows mixed results on how mortgage financing affects commercial banks’ profitability. Evidence on mortgage financing and commercial banks’ profitability in Kenya is therefore unclear and inconclusive. Subsequently, this study wanted to determine the effect of mortgage finance on profitability of listed commercial banks in Kenya. The specific objectives were to assess the effect of mortgage NPL ratio, mortgage concentration, mortgage size and mortgage ratio on profitability of quoted commercial banks in Kenya. This study also investigated the effect of long-term debt as a moderating variable on the link between mortgage financing and profitability of listed commercial banks in Kenya. Hypotheses testing was at 0.05 level of significance. The study was anchored on the following theories: modern portfolio theory, mortgage value theory, title and lien theory, and financial intermediation theory. The target population of the study was all the 11 quoted commercial banks on NSE in Kenya and were operational in the period 2012-2021. Positivism research philosophy and explanatory research design were applied in the study. The time scope of the research was 10 years (year 2012 to year 2021). Secondary data was obtained from audited financial reports of commercial banks and CBK bank supervision annual reports. Preliminary diagnostic tests done included: stationarity, normality, multicollinearity and Hausman test. Data analysis done using STATA software included descriptive statistics, inferential statistics, correlation and panel regression analysis. The study adhered to ethical considerations by seeking authority from Kenyatta University Graduate School and NACOSTI. Panel regression results indicated that mortgage NPL ratio had an insignificant negative effect on profitability of commercial banks listed on NSE. In addition, mortgage concentration had a positive but insignificant effect on profitability of commercial banks listed on NSE. The study equally found mortgage size to have a significant negative effect on profitability of commercial banks listed on NSE. Also, mortgage ratio had a significant positive effect on profitability of commercial banks listed on NSE. Long-term debt had a significant moderation effect on the link between mortgage financing and profitability of commercial banks quoted at NSE. The study recommends that the CBK and all housing sector stakeholders should come up with policies and regulations that will develop the secondary mortgage market. Commercial bank managers should also enhance their mortgage credit risk management policies since non-performing mortgage loans affect profitability negatively. CBK and bank managers should come up with strategies that will increase mortgage loans borrowing thereby improve mortgage concentration hence growth in profitability of commercial banks. Since this research focused only on listed commercial banks, future research should be on the effect of mortgage financing on profitability of SACCOS and micro finance institutions.Item Financial Technology, Bank Size and Financial Performance of Commercial Banks in Kenya(Kenyatta University, 2024-05) Muttai, SusanPerformance of commercial bank is an essential component in the study of finance. A number of studies in the field of finance have been dedicated to the purpose of unraveling the enigma of why the performance of two companies that are operating in the same environment may be so drastically different from one another. Over the last decade, Kenya's commercial banks have increased their use of different types of financial technology (2011-2021). Mobile banking, agency banking, internet banking, and automated teller machines are just some of the various forms of financial technology available today. There are a number of fundamental issues that need to be researched before commercial banks can confidently integrate new types of financial technology into their business operations. There are a number of issues that customers have with mobile banking, including the price, security, speed, and expertise needed. The purpose of this study was to evaluate the effect that financial technology has had, if any, on the overall financial performance of commercial banks in Kenya. The specific goals were as follows: to establish the effect of mobile banking on financial performance; to determine the effect of internet banking on financial performance; to determine the effect of agency banking on financial performance; to determine the effect of ATMs on financial performance; and to establish the moderating role of bank size on the relationship between financial technology and the financial performance of commercial banks. The research was predicated on four different theoretical frameworks: the technological adoption model, the financial intermediation theory, the diffusion of innovation theory, and the profit maximization theory. The positivist research philosophy was used for this study, and a panel longitudinal research methodology was used for the research. The population of the study was 38 commercial banks as at December 2021. The study was a census. Secondary information was gathered on an annual basis, and it covered a span of ten years (January 2012 to December 2021). The data was evaluated making use of descriptive statistics as well as inferential statistics entailing correlation and panel multiple linear regression analysis. The current research conclusions revealed that financial technology fairly explains financial performance and the current research discoveries also revealed that the financial technology is sufficient in predicting financial performance. Additional study findings were that mobile banking, internet banking, agency banking, adoption of ATMs, and bank size had positive significant correlations with financial performance. Moreover, findings were that adoption of ATMs and mobile banking had a significant positive link with financial performance. Meanwhile, agency banking and internet banking had a positive insignificant relationship with financial performance. Finally, bank size was found to have a significant moderating effect on agency banking, mobile banking and ATM banking. For practice, banks should invest in expanding and optimizing financial technology to enhance customer convenience and operational efficiency. Ensuring financial technology reliability and accessibility can improve customer satisfaction. For policy, regulators should promote financial technology infrastructure development and interoperability to facilitate widespread access to banking services.Item Financial Risk Management and Performance of Investment Firms Listed at Nairobi Securities Exchange, Kenya(Kenyatta University, 2024-04) Mwalolo, Sylvia ChiruInvestment firms play a pivotal role in the economic landscape of Kenya, contributing significantly to GDP and employment levels. The financial performance of these firms is of utmost importance, providing a comprehensive view of their overall stability and communicating their financial well-being to investors. However, recent trends suggest a concerning decline in the financial performance of these firms, necessitating a closer examination of their financial risk management practices. This study investigates the effect of financial risk management strategies, focusing on interest rate risk, exchange rate risk, inflation rate risk, and liquidity risk, on the financial performance of listed investment firms in Kenya. Additionally, it explores the moderating effect of firm size on this relationship. The study hypotheses were evaluated at the 0.05 level of significance. Expectations Theory of Exchange Rates, Arbitrage Pricing Theory, Agency Theory, Liquidity Preference Theory, and Modern Portfolio Theory were the theories underpinning the study. Using a positivist research philosophy and explanatory research design, data spanning from 2014 to 2021 were collected from five selected investment firms, with 40 respondents purposively sampled. Techniques including descriptive statistics and multiple regression analysis were employed to analyse the data. To ensure that the data is suitable for multiple regression analysis, diagnostic tests (multicollinearity, normality, and heteroscedasticity) were performed. The data was visually represented through the use of tables, charts and graphs. The study took into account all the necessary ethical considerations. The findings reveal significant positive effects of interest rate risk management (p = 0.025), exchange rate risk management (p = 0.017), inflation rate risk management (p = 0.020), and liquidity risk management (p = 0.007) on financial performance. Moreover, firm size significantly moderates this relationship (p = 0.002). The study underscores the critical need for effective financial risk management strategies within investment firms. Recommendations include implementing currency invoicing and exposure netting to manage exchange rate risk, utilizing financial instruments such as forward rate agreements to mitigate interest rate risk, optimizing net working capital for liquidity risk management, and adopting portfolio adjustment techniques for inflation rate risk management. The study suggests that policymakers in Kenya should take an active role in encouraging investment firms to provide comprehensive risk disclosures in their financial reports. Furthermore, future research could delve into individual variables' effects on investment firms' financial performance, expanding beyond listed entities to encompass the broader Kenyan context.Item Financial Banking Risks, Bank Size and Financial Performance of Fully Fledged Islamic Banks in Kenya(Kenyatta University, 2024-05) Shukri, Abshir IbrahimIslamic banks must carefully analyze the loans granted in order for them to get back the loans as per the agreements. The aim of this study was to assess how Islamic banking financial risks affect financial performance of fully fledged Islamic banks in Kenya. The key focus of the inquiry was on credit risk, liquidity risk, transactional risk and operational risk as well as bank size and financial performance. The agency theory, the profit-and-loss sharing theory, shift ability theory and the modern portfolio theory guided the inquiry. Descriptive research design was embraced targeting 3 commercial banks offering Islamic products in Kenya and census was used. Secondary cross sectional quarterly data on total liquid assets, total deposits, loan loss provisions, total loans, exchange rates fluctuation, total employee expenses, number of employees and net income was collected for the period 2017 all through to 2021. Three regression models were used to estimate the link between Islamic banking risk, bank size and financial performance. Prior to inferential analysis, diagnostic tests covering Heteroscedasticity test, normality and autocorrelation. Statistical Packages for Social Sciences guided processing of views. The findings were that credit risk, liquidity risk, transaction risk and operational risk significantly affected financial performance of Islamic banks in Kenya. It was wrapped up that Islamic financial banking risks significantly affect financial performance of Islamic banks in Kenya. It was recommend that the credit managers of the Islamic banks in Kenya should review the existing credit risk management framework and mechanisms to manage the increasing trend in NPLs. Islamic financial banks need to ensure they are adequately capitalized to maintain an optimal liquidity position that can allow them to effectively realize their financial intermediation role in the economy. The policy makers at CBK should effectively leverage on existing monetary policy instrumental to control volatility in exchange rate which in turn increase exposure of Islamic bank to transactional risk. The operations managers of the Islamic banks in Kenya review the existing infrastructures regularly and recommend continuous repair and maintenance to avoid possible non-performance of internal processes and the system. The product development managers and the marketing managers of the Islamic banks in Kenya should grow the size of their institutions by researching and recommending viable markets for expansion of the operations to grow the asset base.Item Financial Structure on Liquidity of Manufacturing Firms Listed in Nairobi Securities Exchange, Kenya(Kenyatta University, 2023-05) Ngue, E. MinooLiquidity of a manufacturing firm means a lot for it providesi ai cushioni thati wouldi enablei thei companyi toi survivei ai periodi ofi lowi earningsi duringi whichi thei companyi mighti bei unablei toi accessi capitali markets. Studies, both theoretical and empirical, demonstrate that a firm's financial structure affects the firm's liquidity. However, as a corporation`s liquidity desires are mainly impacted through the character of its operations, a corporation`s liquidity call for will range relying on its unique circumstances. Specifically, the look at was looking to; discover the impact of brief time period debt, long time debt capital and equity capital on liquidity of manufucturing corporations indexed in Nairobi Security Exchange, Kenya.The usage of corporation size forms the moderating factor/ variable. The look at can be pegged on 5 major theories which encompass the Working Capital theory, Modigliani-Miller theorem, the Pecking Order Theory, the Bird in Hand Theory, and the Theory of Optimal Firm Size. The positivist philosophy was used in the current investigation. Explanatory research design was used in the investigation. Nine Firms listed under the Manufacturing and allied sector of the Nairobi Securities Excjange were used as the study population There was no sample frame used in the investigation. Census was utilized because the target population Was below the central limit theorem threshold of normal population. Using a data extraction tool, information on accruals, leases, debentures, preference shares, retained earnings, reserves, cash balances, bank balances, and account payables was gathered. The researcher took care at some stage in records amassing and evaluation to make certain that the cloth given withinside the thesis represents the real records received from the monetary statements of the diverse manufacturing establishments and NSE reports. Diagnostic test for the best linear unbiased estimator was conducted through Multicollinearity test, heteroscedasticity test, normality test and stationarity test was done to reduce data ‘noise’. Data was analyzed by the use of inferential statistics which included bivariate analysis using Pearson correlation and multivariate analysis using static panel regression. Robust Static Panel selection was done using Hausman test, in addition to descriptive statistics, inclusive of mean, mode, general deviation. Finally, the data analysis output were presented by the use of tables as was deemed appropriate. The study concluded that financial structure affects liquidity of listed manufacturing firms in Kenya. Short-term debt is the main factor of financial structure that affects the liquidity of listed manufacturing firms in Kenya. The study further concludes that short-term debt significantly affects liquidity of listed manufacturing firms in Kenya. From the regression analysis, short-term debt showed a strong significant negative effect on cash ratio of the listed manufacturing firms in Kenya. The study concludes that long-term debt has a positive effect on liquidity of listed manufacturing firms in Kenya. Thus, increased long-term debt increases the liquidity of listed manufacturing firms in Kenya. The study concludes that Equity have a significant effect on liquidity of listed manufacturing firms in Kenya. The study threfore concludes that firm size has a significant effect on liquidity of listed manufacturing firms in Kenya. In accordance to the findings in the regression analysis, the study concludes that firm size has a positive effect on the liquidity of listed manufacturing firms in NSE, Kenya. Thus, increased assets base improves the liquidity of manufacturing firms listed in Kenya.Item Systematic Risk and Financial Performance of Commercial Banks Listed at the Nairobi Securities Exchange, Kenya(Kenyatta University, 2024-06) Okello, Serfine AdhiamboThe systematic risks and financial performance subject on commercial banks have been widely discussed by many scholars with minimal theoretical, contextual and methodological solutions thereof. The general objective of this study was to establish the influence of systematic risk on the productivity aspect of the commercial banks in terms of financial performance which are listed at the NSE in Kenya. Specific objectives were; to determine the influence of inflation on financial performance of commercial banks listed at the Nairobi securities exchange, Kenya, to examine the influence of interbank interest on financial performance of commercial banks listed at the Nairobi securities exchange, Kenya and to evaluate the influence of foreign exchange on the financial performance of the commercial banks listed at the Nairobi securities exchange, Kenya. The study was anchored on International Fisher Effect theory, Loanable Funds theory and purchasing power parity theory. The study utilized descriptive research design. The target population comprised of twelve (12) listed commercial banks in NSE, Kenya whereby census approach was used therein with only 11 firms qualifying for the data collection exercise. The study utilized descriptive as well as panel regression for analysis purposes. Ethical issues will be given pre-eminence where a permit from Kenyatta University graduate school will be sought and NACOSTI in that order. The research outcome portrayed that commercial bank which are listed at the Nairobi securities exchange, Kenya has their financial performance being influenced by inflation and it took an inverse and statistically insignificant direction. Again, commercial bank which are listed at the Nairobi securities exchange, Kenya have their financial performance being influenced in a statistically significant way by interbank interest and in a positive manner and lastly, foreign exchange negatively influenced the productivity aspect of the commercial banks which are listed at the NSE, Kenya as far as financial performance is concerned and it was statistically significant. To the top management of commercial banks, the theoretical viewpoint of inflation, interbank interest and foreign exchange and financial performance is a eye opener for the inverse link of inflation will guide them to establish policies which foster the purchasing power of the end users of their products, namely their customers. The top management of Nairobi securities exchange have an empirical frontier set for them in making financial sustainability policies specifically targeting the commercial banks for those financial institutions are uniquely affected by foreign exchange and interbank interest in addition to the normal interest rates. This will help the NSE team to mitigate cases of delisted banks. The academicians are beneficiaries of the study outcome for the methodological gap on how to measure the inflation, interbank interest, foreign exchange and financial performance of commercial banks has been placed in a new debatable frontier.Item Investment Decisions and Financial Performance of Matatu Saccos with Offices in Nairobi City County, Kenya.(Kenyatta University, 2024-06) Mutua, Joram KasyokiMatatu SACCOs in Kenya play a pivotal role from both locally and nationwide perspective. Even though it is widely known that matatu SACCOs have manifold benefits to the country, past studies portray controversial debate over linkage between financial outlay decisions and returns realized over the years. Purposely, this paper endeavored to test NTSA regulations moderation effect of on the relationship between investment decisions and financial productivity in terms of performance of matatu SACCOs in Nairobi City County, Kenya. The specific objectives were, to determine the influence of replacement decision by matatu owners on financial performance of matatu SACCOs with offices in Nairobi CBD, Kenya, to examine the influence of modernization decision by matatu owners on financial performance of matatu SACCOs with offices in Nairobi CBD, Kenya, to evaluate the influence of diversification decision by matatu owners on financial performance of matatu co-operatives with offices in Nairobi CBD, Kenya and to assess the NTSA regulations moderation implications on the linkage of investment decisions and of matatu SACCO financial performance with offices in Nairobi CBD, Kenya. The research project is anchored on modern financial theory, risk and uncertainty-bearing theory of profit and opportunity cost’ theory. This research applied descriptive survey research design. The four hypotheses were tested at 95% confidence level using multiple both multiple and Hierarchical regressions models. The target population is 625 matatu SACCOs registered under the national transport and safety authority out of which with use of stratified sampling method selection of a sample size of 206 was obtained. Then again, with use of a structured questionnaire, data needed was collected via the drop and pick methodology was applied. Research findings portrayed that replacement investment decision influenced financial performance of Matatu SACCOs which was direct and significant. Again, modernization investment decision influenced financial performance of Matatu SACCOs which was negative and statistically significant, diversification investment decision caused a significant financial performance of Matatu SACCOs which was direct and lastly NTSA regulations portrayed a statistically significant moderation effect on investment decisions to matatu SACCO financial performance conceptual connection. The results portray that government is able to establish policies which can guide on transport sector operations which promote matatu SACCO financial performance and by extension raise its tax base. The top management of the matatu SACCOs have an in-depth conceptual linkage between investment decisions they make and the financial performance implication which help them improve their financial sustainability through increased profitability. The academicians have a base of further debate on aspects of investment decisions which can significantly influence financial performance of matatu SACCOs.Item Internal Control System and Loan Performance of Deposit Taking Saccos in Nairobi City County, Kenya(Kenyatta University, 2024-04) Njane, Julius KigothoThe so-called DT-SACCOs has proven to directly donate to social-economic threats arising from poverty, augmented job chances and economic upscaling. Even with such an amazing provision, they still have trials on their future survival due to loan default rates over the years. The main objective of this study was to establish the influence of internal control system on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya. Specifically, the study evaluated the influence of control activities on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya; examined the influence of control environment on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya, established the influence of information communication on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya and assessed the influence of monitoring on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya. Systems theory, agency theory, information asymmetry theory and credit risk theory are the key suppositions which were utilized in this study. The study utilized causal research design for the purposes of developing the research problem. A total of 42 DT-SACCOs representing the study population located in Nairobi City County. To collect the needed data, survey approach was utilized for the population was small. Structured questionnaire was the main tool which was utilized for collecting primary data from top officials of the DT-SACCOs. To collect the secondary data, a data collection schedule was utilized. The research findings were reported using chart and tables. Ethical issues were addressed as supposedly through the respective permissions. Before testing of hypotheses, diagnostic test was performed which entailed normality test, multicollinearity test and heteroscedasticity test Research findings portrayed that the four COSO affiliated ICS predictor variables, namely; control activities, control environment, ICT and monitoring activities had a direct and statistically significant influence on loan performance of DT-SACCOs in Nairobi City County, Kenya. Top management will benefit from the research findings for the consideration of the contextual aspects of ICS which are relevant and suitable to DT-SACCOs aid in development of information decision system which is well-informed for future planning on the ways in which loan default rate may be mitigated. The government policy makers such as SASRA will take advantage of the outcome of this investigation for the conceptual viewpoint addressed herein pinpoints areas of loan lending policy making to create user-friendly financing environment for the borrowers and lenders. The academicians have a reliable empirical anchorage for the linkage between ICS and loan performance the contextual viewpoint provide an avenue to advance on this topical issue in the future.