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Kenyatta University Institutional Repository is a digital archive that collects, preserves and disseminates scholarly outputs of the Institution
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Digital Financial Services and Profitability of Microfinance Banks in Kenya: A Theoretical Review
(Globeedu Group, 2026-02) Omwenga, Kerubo Cyprine; Jagongo, Ambrose
Microfinance banks play a crucial role in promoting financial inclusion in Kenya by serving low-income households and informal sector businesses. The profitability of microfinance banks in Kenya has fluctuated over the past few years, raising concerns about the sector’s financial sustainability. Return on assets increased slightly from 1.2% in 2021 to 1.4% in 2022, and further rose to 3.7% in 2023, indicating a gradual recovery in profitability. In 2024, the sector recorded a significant decline in return on assets, reporting a negative return of 6.1%, reflecting losses. The general objective of the study is to investigate the effect of digital financial services on the profitability of microfinance banks in Kenya. The specific objectives of this study are to determine the effect of mobile banking, internet banking, and agency banking services on the profitability of Kenyan microfinance banks. The research study also aims to establish the moderating effect of the regulatory framework on the relationship between digital financial services and the profitability of Kenyan microfinance banks. The study was anchored on the technology acceptance theory and supported by financial intermediation theory, financial innovation theory, and institutional theory. An empirical literature study was also incorporated.
Evaluation of the Relationship between Stakeholder Partnerships and Sustainable Water Service Provision in Kenya: Perspectives from Mandera County
(Stratford Peer Reviewed Journals and Book Publishing, 2026-03) Mohamed Ali Omar; Muna,Wilson; Minja,David
Empirical studies indicate that the implementation of national water policies yields mixed
outcomes in terms of their influence on water service provision. While some contexts report
improvements in access, quality and sustainability, others continue to experience limited progress
due to institutional, financial and environmental limitations. In Mandera County, there are still
gaps understanding the effective implementation of these policies, as evidenced by perennial water
scarcity, inadequate infrastructure, and unequal distribution of services. The purpose of this study
was therefore to determine the effect of stakeholder partnership on the provision of water services
in Mandera County. The study was underpinned by Institutional Theory. The study was informed
by pragmatism philosophy and employing a descriptive survey research design. The target
population comprised 535 participants drawn from various key stakeholders in Mandera County,
including the Water Resources Authority, Mandera Office, Mandera County Companies,
community leaders, representatives from the Non- Governmental Organization, County
Government of Mandera Water Department, and the National Drought Management Authority.
The researcher used Slovin’s formula to obtain a sample size of 229 respondents. The study used
both descriptive and inferential statistical methods in analysis. The findings were presented on
tables. The findings revealed that the coefficient of determination (R Squared) was 0.495, implying
that 49.5% of the variation in the provision of water services in Mandera County is explained by
stakeholder partnership. The ANOVA results showed that the model was statistically significant
in explaining the effect of stakeholder partnership on the provision of water services. The
regression coefficient results in revealed a positive and statistically significant relationship
between stakeholder partnership and provision of water services (β = 0.683, p = 0.000 < 0.05). In
view of the findings, the study recommends that County government of Mandera County
Moderating Effect of Environmental Regulatory Framework on the Relationship Between Green Investment Initiatives and Profitability of Manufacturing Firms in Kenya
(Stratford Peer Reviewed Journals and Book Publishing, 2026-02) Karanja, Teresiah Wairimu; Warui,Fredrick Waweru; Aluoch, Moses Odhiambo
Despite their importance, manufacturing companies continue to encounter ongoing profitability challenges. Over the past decade, listed manufacturing firms in Kenya have experienced a consistent decline in return on assets (ROA), which reflects diminishing efficiency in asset utilization. This study aimed to assess how green investment practices influence the profitability of manufacturing companies in Kenya, while also examining the moderating influence of environmental regulations on this relationship. The research was underpinned by five theoretical perspectives: the Porter Hypothesis, Sustainable Finance Theory, Transaction Cost Economics Theory, Dynamic Capability Theory, and Institutional Theory. The study focused on ten manufacturing companies registered and publicly traded on the Nairobi Securities Exchange (NSE). Findings from correlation and regression analyses indicated that all four categories of green investment were positively and significantly associated with profitability. Among these, energy efficiency investments demonstrated the most substantial positive impact (r = 0.641, B = 0.821, p = 0.000), followed by investments in green supply chain management (r = 0.241, B = 0.447, p = 0.013) and renewable energy initiatives (r = 0.182, B = 0.314, p = 0.039). Sustainable waste management practices also showed a positive relationship with profitability, though the contribution was relatively modest (r = 0.094, B = 0.192, p = 0.233). Collectively, the green investment variables accounted for 38.6% of the variance in firm profitability (R² = 0.386), indicating considerable explanatory power. When the environmental regulatory framework was incorporated as a moderating variable, the explanatory strength of the model increased to 45.7% (R² change = 0.071, F change = 4.189, p = 0.006). This suggests that regulatory support amplifies the financial benefits derived from green investments. The study concludes that green investment initiatives significantly contribute to enhanced profitability in manufacturing firms, with regulatory policies providing a supportive, albeit limited, moderating effect. It recommends that policymakers reinforce environmental regulations and introduce incentives that encourage sustainable industrial investment. Manufacturing companies are also encouraged to embed green practices into their core operations as a strategy to boost competitiveness and profitability
Moderating Effect of Capital Inflows on the Relationship Between Systematic Risks and Stock Market Return Volatility Among Firms Listed at the Nairobi Securities Exchange, Kenya
(Stratford Peer Reviewed Journals and Book Publishing, 2026-02) Kinuthia,David Ngugi; Warui, Fredrick; mithi, Festus
The study assessed the moderating effects of capital inflows on the relationship between systematic
risks and stock market return volatility among firms listed at the NSE, Kenya. Volatility in the stock
market in Kenya has been on the rise in the recent years. Capital inflows can impact stock market
volatility by affecting overall market liquidity and investor sentiment. Sudden changes in capital flows,
such as large-scale foreign selling or buying, can exacerbate market volatility as prices adjust to
accommodate the influx or outflow of funds. Empirical studies found conflicting findings and displayed
research gaps that this study sought to fill. The study was anchored on positivism philosophy and
correlational research design. The target population was all 62 NSE listed firms listed between 2014
and 2024. Secondary data was collected from NSE, KNBS, CMA and world bank reports using data
collection sheet. The data was analyzed through descriptive statistics and multiple regression. The study
found that individual interaction terms were insignificant, including inflation (β = -0.0172, p = 0.428),
exchange rate (β = 0.0368, p = 0.306), and interest rate (β = -0.0215, p = 0.389). Hence, capital inflows
had no significant moderating effect on the relationship between systematic risks and stock market
return volatility. The study concludes that capital inflows have no significant moderating effect on the
relationship between systematic risks and stock market return volatility of firms listed at the NSE
Kenya. The study recommends that regulatory bodies such as the CMA and CBK develop policies that
encourage productive and long-term capital inflows. The CMA and CBK should establish early warning
mechanisms that monitor capital flow volatility and its potential spillover effects on equity market
stability. Market regulators should also enhance investor education initiatives so that market participants
are better equipped to respond rationally to changes in capital flow patterns, thereby reducing sentimentdriven volatility in the Kenyan stock market
Prudential Requirements and Financial Performance of Commercial Banks Listed at the Nairobi Securities Exchange, Kenya
(Kenyatta University, 2025-09) Musili, Johnstone Muimi
Commercial banks have a vital and varied function they perform. In Kenya, commercial banks
are essential to industrialization and job creation as well as the financial development of the
majority of market participants. Nonetheless, commercial banks' financial performance has
been deteriorating over time. For example, profitability fell to Ksh.112.1 billion in 2020 from
Ksh.159.1 billion in the prior financial period—a 29.5% negative shift. The conceptual linkage
between commercial banks' financial performance and regulatory standards has portrayed
dissimilar debate amongst scholars over the years. This study focused on the precise goals
listed; exploring the influence of liquidity, capital adequacy, and asset management on the
Nairobi Securities Exchange's (NSE) listing commercial banks' operating results. The
investigation was anchored on Keynes liquidity preference, the capital buffer and the liabilities
management theories. The investigation utilized causal-effect research approach. The target
audience comprise of eleven (11) listed commercial banks in NSE, Kenya whereby census
approach was used therein. The study analysis was based on descriptive as well as panel
regression analysis.Prior to drawing investigational deductions and conclusions, diagnostic
testing was conducted. The outcome was presented using tables and figures. Ethical issues
were given pre-eminence where a permit from Kenyatta University graduate school was sought
and NACOSTI in that order. Findings unveiled that liquidity exhibited a statistically significant
direct influence on financial performance; capital adequacy indeed exerts a significant and
positive influence on financial performance; and asset management depicted negative
influence on financial performance, which was statistically significant. The survey advices that
the banks should focus on other risk management strategies, such as credit risk, operational
risk, and market risk to enhance their performance financially. Implementing robust risk
management frameworks and diversifying risk exposure would help ensure overall financial
stability and resilience