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This collections contains bibliographic information and abstracts of Master theses and dissertation in the School of Business held in Kenyatta University Library

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Assessment of factors influencing investment behaviour in securities markets; A Case of Nairobi Stock Exchange
(2014-01-07) Njeru, A. W.; Abdul, Farida
Due to globalization, stock markets have strived to enhance securities markets performance to increase its investors' confidence and hence widen their pools of investments portfolios. Recent years have seen considerable attention devoted to the analysis of factors influencing investment decisions in different countries. Much of the research was prompted by nearly simultaneous worldwide collapse of equity markets, which apparently provided evidence of strong linkages in factors capital movement, the advent of globalization of financial markets and the increasing importance of cross border equity flows. The project explains the important role Nairobi Stock Exchange play in providing opportunities for mobilization of savings, improved efficiency in resource allocation and provision of relevant information for investment appraisal. It also generates lower cost equity capital for firms. Investors need to be appraised of the opportunities and pitfalls of stock market investment to enable them make informed decisions. This paper sets out to assess the factors influencing investment decisions in securities markets, at Nairobi Stock Exchange. With realization of the important of capital markets and the impediments they face, this study sets to identify and assess these factors and to make necessary recommendations for policy framework. The population of the study comprised of all quoted companies in NSE, and all registered stockbrokerage firms and the capital investment advisers. The primary data was collected by use of structured and semi structured questionnaires.
Cash management factors that affect the business of Safaricom dealers in Nairobi and its suburban areas
(2012-06-26) Kimebur, Amos; Thuo, A. K.; Abdul, Farida
In view of the challenges faced in cash management by a number of business enterprises in the telecommunications sector, this research was set out to establish which factors do affect cash management in the said sector in Kenya today. The broader objective of this study was to establish which of the cash management factors in the telecommunications industry affect the businesses of Safaricom dealers in Nairobi and its suburban areas and explore remedial measures to mitigate their effects. The specific objectives were: to assess the extent to which inventory management, Safaricom policies, technological applications and staff competencies affect cash management of the businesses of the said dealers. This study adopted a descriptive research design. The target population was management staff of 192 dealers who are currently members of Safaricom Dealers Association. The study utilized both primary and secondary data. The study administered questionnaires to a total of 120 employees working in finance and accounts departments and also those in the top management of the 40 selected dealers in Nairobi and its suburban areas. Stratified random sampling was used to come up with a representative sample size. Secondary data was gathered from various authoritative sources including the Safaricom Dealers Association's reports, CCK's reports, surveys and journals, 'Informa' Telecoms publications among other sources. The data was collected through questionnaires edited, classified, coded and tabulated in a systematic manner to allow for accurate analysis. Tools of descriptive statistics, these are, measures of central tendency were employed to analyze data. To aid and speed-up data analysis process, Statistical Package for Social Sciences (SPSS) was used to generate the statistics. Finally, the data was presented in form of pie charts, bar graphs, frequency tables, percentages among others so as to provide a complete and accurate presentation of the findings.
Constraints to the growth of commercial paper as a source of short term finance for listed companies
(2013-01-09) Gatheru, Githambo Martin; Thuo, A.K.; Ndede, F.; Abdul, Farida
The purpose of this study was to investigate constraints to growth of commercial paper market in Kenya with reference to listed companies. Conceptual framework of the study looked at the independent variables which included issuance requirements by CMA, issuance costs and the effects of credit rating agencies while the dependent variable was growth of commercial paper market. Innovations in the commercial paper market that could popularize it as a source of short term finance was also looked at. The study population comprised of forty seven (47) listed companies in Kenya with a minimum authorized and fully paid up share capital of Kshs 50 million and net asset of Kshs 100 million as per the requirement of CMA. The study used a descriptive research design and studied the entire population. Primary data was collected using semi structured questionnaires that were self-administered to the respondents. Secondary data was obtained from past studies on the topic, CMA reports, CBK reports and published financial statements. Data analysis techniques included the use of percentages and tables for easy analysis and interpretation. A multiple regression equation was used to establish the relationship among the dependent variable and independent variables.
Corporate governance practice and its effect on financial performance in SACCOs (A case study of urban SACCOs in Kirinyaga County- Kenya)
(2014-07-22) Kamonjo, K. Lawrence; Mbewa, M.O.; Abdul, Farida
Corporate governance practice and its effect on financial performance in SACCOs (A case study of urban SACCOs in Kirinyaga County- Kenya) The study sought to examine the effects of corporate governance practices on financial performance of SACCOs, and it was conducted in Kirinyaga County in Kenya. The independent variables that were used are: board size, internal audit function and frequency of board meetings. Return on Capital Employed was used as a measure of financial performance. Financial information for the period between year 2006 and 2009 was used. Data was collected using a questionnaire. The study employed descriptive survey design. The population for the study was drawn from thirteen active urban SACCOs in Kirinyaga County. Complete census of the population was used since the number of urban SACCOs is not very big; hence it was possible to reach all of them within a reasonable time. Data was analyzed using regression analysis tec1mique. The findings of this study indicate that there is a negative relationship between the size of the board and the financial performance; the average board size being seven. The study also revealed a positive relationship between the frequency of board meetings per year and ROCE; the average number of meetings per year being ten. Regarding the presence of internal audit function, the study revealed a negative relationship between ROCE and the presence of the internal audit function, with only 23.PYO of the respondents indicating that they have audit departments in their SACCOs. The study recommends regular board meetings, which should focus on initiating strategic actions for the SACCOs. The study also recommends enhancement of independence and effectiveness of internal audit function in SACCOs. It further recommends a board size that suits the needs of each SACCO, and which provides desired mix of skills, effective communication cohesiveness of the board.
Determinants of choice of investment vehicles among secondary school teachers in Nandi Central Division
(2012-11-23) Sang'utei, Jimmy K.; Abdul, Farida; Ndede, F.W.S.
The purpose of the study was to determine the investment vehicles that are available to the Kenyan civil servants and more specifically the secondary school teachers. It also sought to determine the extent to which this group of employees aware about the availability of this opportunities and finally establish what determines their choice of investment vehicles. The design of the study was descriptive design since it sought to find out factors that influence the choice of investment options among secondary school teachers and it was carried out in 37 secondary schools in Nandi central District .The main objectives of the study was to identify the factors determining the choice of financial investment vehicles by secondary school teachers in Nandi Central district. The study covered the teachers who are employees of the Teachers' Service Commission (TSC) and excluded all teachers who are in temporary employment such as the teachers who are employed by the school board of governors and the teachers who are on teaching practice. The study was carried out in Nandi Central District is only enabling us to draw conclusions that may only reflect the scenario in Nandi Central District and not the rest of the country. The study was based on the Marxian theory of investment since it was easy to explain for it clearly states that the driving force behind investing is the profit attained. This is usually the essence of doing business. The study used stratified sampling technique to select the respondents, and 125 teachers were chosen from the schools in Nandi central districts, the study sample was obtained from a total of 14 schools that were selected from the four zones. The main data collection instruments were the questionnaires that were administered by the researcher to the teachers from the selected school in the zones. The results obtained were then analyzed qualitatively and quantitatively. Statistical package SPSS was used to determine the trends of the responses and to test the hypothesis developed. Conclusions of the study were developed and recommendation for further research given.
Effects of internal control on sales performance in the retail industry in Kenya (a case study of the armed forces canteen organization)
(Kenyatta University, 2012) Omenge, Isaac Okemwa; Ngaba, D. K.; Abdul, Farida
The retail industry has cut-throat stiff competition as new entrants continue entering this economic sector, thus AFCO's Board of management is mandated to formulate and implement an efficient and effective system of internal control to enhance its sales performance. Internal controls are bound to face inherent challenges which may deter AFCO from achieving its objectives. The case study focused on the effects of internal control on sales performance at AFCO'S headquarters in Moi Air Base (MAE), Nairobi. The main objective of the study was to establish the role played by management in implementing an efficient and effective system of internal control. The specific objectives were: To confirm how prudent business practices enhance sales performance; to evaluate how an effective supply chain management affects organization sales performance; to determine how embracing current trends in Information technology enhance sales performance; to establish how Internal Audit's role in risk management, control and-governance processes enhances sales performance and to establish the role of sound corporate governance in enhancing an organization's sales performance. The research was conducted through a census survey on the target population. This research utilized descriptive survey design by administering questionnaires and interviewing respondents. The questionnaire included both closed and open ended questions and was self-administered. The target population was employees in management level in Accounts, Internal Audit and Supplies departments at AFCO'S head quarters in Moi Air Base (MAB) in Nairobi. Pre-testing of instruments was conducted at the Accounts, Internal Audit and Supply departments. Data collected was analyzed using descriptive statistics. Quantitative data was analyzed using tables and charts whereas qualitative data was analyzed based on content analysis. Finally, data was presented using frequency distribution tables, pie charts and bar graphs with the use of statistical software, SPSS.
Effects of the cost per unit funding system on the financial requirements of public primary schools in Narok District
(2012-06-27) Ongesa, N. J.; Ndede, F.W.S.; Abdul, Farida
Financial resources are key inputs to the education process. The adequacy and effective utilization of financial resources will to a larger extent determine the quantity and quality of resources acquired. This will subsequently impact on the attainment of the school objectives. This study focused on the sources and uses of funds in public primary schools in the Free Primary Education (FPE) context. Specifically, the study sought to evaluate the effectiveness of the unit cost funding system criterion in meeting the financial requirements of the institutions as spelt out in their respective budgets. Special attention was given to government and parents (household) financing, the main sources of funds for primary schools under this criterion. The study employed the descriptive research design and targeted all the 320 public primary schools in Narok district. The sample consisted of 32 schools which is 10% of the target population. All the 32 respondents from these schools took part in the study. Data was gathered using interviewer-administered questionnaires, observation schedule and documentary analysis. Such data was analysed descriptively with thematic emphasis, and also by use of simple descriptive statistics (ie frequencies, percentages and means) and inferential statistics (simple regression analysis model). The results were presented in tables, bar graphs and pie charts where applicable. Findings from the study revealed that most public primary school budgetary items were being financed using unit cost funding system. It further established that schools were facing problems in their annual budget execution that were much attributed to the limitations of the unit cost funding system. The positive effects of unit cost funding system on the financial requirements of public primary schools in terms of improved facilities, adequate teaching and learning materials and minimal variances in operational cost budget outtums were more profound in highly enrolled schools than in lowly enrolled schools. Even though, the uniform unit cost funding system applied by government to finance primary education costs was not effectively meeting financial requirements of most schools as expenditure in some votes was not directly related to units (enrolment). Such a situation was exacerbated by inadequate budgetary allocations to some votes and low enrolments. The study indicated that inadequate parental obligation was mostly attributed to economic factors that were poverty related. Further, the findings revealed that the extent of parental (household) contributions to the education costs was much influenced by the environmental settings within which the schools exist. Therefore, due to schools operating in diverse environmental settings and being of different sizes, a unit cost funding system that is responsive to relative school budgetary needs, changes in price levels of goods and services, and poverty levels of parents/community is recommended as an alternative funding criterion. The findings are particularly useful to scholars in the university interested in further research on primary education financing. They also serve as a reference area for policy makers in education on matters pertaining to sustainable financing options that could effectively meet the financial requirements of public primary schools.
An evaluation of the role of agency banking in the performance of commercial banks in Kenya
(2013-01-04) Mwangi, Ruth Wangari; Abdul, Farida
Keen to take advantage of the cost-saving and accessibility brought about by the agency banking model, Kenyan financial institutions have over the last one year embarked on an aggressive entry into this segment. However, how this model has contributed to the performance of these banks in Kenya is yet to be documented. The purpose of this study was to evaluate the role of agency banking in the performance of commercial banks in Kenya. The specific objectives of the study were; to assess the effects of liquidity on the performance of commercial banks attributable to agency banking, to determine the effects of cost on the performance of commercial banks attributable to agency banking, to evaluate the effects of security on the performance of commercial banks attributable to agency banking. This study used a descriptive research design. The study targeted banks that offer agency banking services in Kenya. The number of commercial banks offering agency banking were four. The population of the study was fourty branch managers of the selected banks. Data collected was quantitative and qualitative in nature and was analyzed appropriately using descriptive statistics. The descriptive statistical tools helped the researcher to describe the data. This included frequencies, percentages, mean and standard deviations. In addition, advanced statistical technique (inferential statistics) was also considered. SPSS (Statistical Package for Social Sciences), Ms Excel was used in analyzing the data. This generated quantitative reports which were presented through tabulations, charts and graphs. The researcher used content analysis to analyze qualitative data obtained from open ended questions. The data was presented in a prose form. The study showed that some of the effects of regulations on the performance of commercial banks attributable to agency banking were board of directors and executive management, accountability and quality control. The study concluded that infrastructure cost and security influence the performance of commercial banks attributable to agency banking to a very great extent. The study therefore recommends that Agency banking should be given more attention on security measures including risk-based approach and that the banks should find better ways of screening their agents to ensure that the large cash transactions handling is effectively carried out on their behalf. It is also recommended that the banks should explore other services other than money transfer only to improve their performance through agency banking which include: secure operating systems capable of carrying out real time transactions, generating an audit trail, and protecting data confidentiality and integrity.
The expectation gap in the statutory audits of quoted companies in Kenya
(2012-07-03) Kimutai, Irene Jepchirchir; Abdul, Farida; Thuo, A. K.
Audit expectation gap is a critical issue in auditing because of the damage it has brought, and continues to bring to the essence of the auditing profession. This study sought to find out whether an expectation gap exists in the audits of quoted companies in Kenya as well as to find out whether public expectation of the auditors is reasonable and achievable. In order to achieve the objectives, primary data on semantic differential belief statements on respondents' opinion and beliefs about the audit function was collected from stock broking firms in Nairobi. The target population was made up of 19 stockbrokerage firms as listed by the Nairobi Stock Exchange (NSE). The study took a census of all the 19 brokerage firms in Nairobi. The study then used convenience sampling to select five investors of each brokerage firm to be the respondents. This made up a sample size of ninety five (95) respondents, out of the target sample the response rate was 84% an equivalent of 80 respondents. Primary data was collected from respondents using questionnaires. The data has been analysed using descriptive statistics and presented using tables and figures enhanced by a narrative explanation. The analysis of gathered data revealed that an expectation gap particularly in relation to the level and nature of auditor's responsibility exists. The expectation gap was found particularly wide on the issues of auditor's responsibility for the maintenance of the accounting records (3.91), the auditor's responsibilities for the soundness of the internal controls structure of the entity (3.51), to a lesser extent, an expectation gap was found concerning the, a narrow gap was also observed on the issue of the objectivity with the majority agreeing that the auditor is unbiased and objective (3.50). A gap was also observed on the reliability of the statement on giving assurance on the efficiency of management (3.70), financial statements give a true and fair view (3.70), extent of work performed is clearly communicated (3.46). A high proportion of the respondent's belief that competitive pressure among the audit firms affects the quality of audit work (3.5) and the provision of non audit services by an auditor to his clients compromise their independence (3.71). In all the semantic differential belief statements investors never had the same belief on any single statement thus a clear indication of the existence of an audit expectation gap on the statutory audits of quoted companies in Kenya.
Factors influencing financial management in state corporations: the case of Muhoroni sugar company factors influencing
(Kenyatta University, 2013) Nyakondo, Richard Mobutu; Ngaba, D. K.; Abdul, Farida
The purpose of this research was to identify independent variables and intervening variables and examine how they influence financial management in Muhoroni Sugar Company Ltd, which is on its deathbed as a result of poor financial management and embezzlement of its resources. Muhoroni Sugar Company Ltd, which for many years used to be one of the vibrant and _efficiently managed sugar producing mills in the country is ailing and headed for a total collapse. The company has been slowed down by ageing infrastructure, high production costs, failure to impress technological change, and weak financial controls and accounting systems, among other factors. State Corporations in Kenya are facing financial management challenges and as a result they have to adopt International Public Sector Accounting Standards (IPSASs) as a tool to improve transparency, efficiency and effectiveness in service delivery. The purpose of this study was therefore to identify the factors influencing financial management in state corporations in Kenya. The research was conducted in Nyanza Province, Kenya, aiming to explore the factors influencing financial management in Muhoroni Sugar Company Limited. The main objective of the study was to identify the factors influencing financial management in state corporations and how they impact on their performance. This study therefore adopted a case study design methodology because the researcher intended to collect data on factors influencing financial management in Muhoroni Sugar Company Ltd which is currently in receivership. The main instrument of data collection was a structured questionnaire which was administered to Muhoroni Sugar Company's Board of Directors, Managers and Supervisors, targeting 35% of the population of interest through stratified simple random sampling. The target population of this study consisted of 12 Board of Directors, 20 Managers and 60 Supervisors of Muhoroni Sugar Company Limited. Since the researcher wanted to get the clear and unquestionable facts of this research, he also included 60 Supervisors in the target population so that the researcher was able to compare the information received from them in relation to the one the Board of Directors and the Managers gave. The data collection procedure used to collect the questionnaire was drop and pick approach. The research questions were systematically generated from the objectives. The data collected was coded, analysed and presented using simple frequency distribution tables, graphs, pie charts, and percentages with the aid of SPSS package. The data collected was analyzed through the use of quantitative and qualitative analysis. A regression model was used to analyze internal and external factors influencing financial management in Muhoroni Sugar Company Ltd. The researcher used both primary data and secondary data. Primary data was collected by way of a semi-structured questionnaire consisting of open ended and closed ended questions. Secondary data was gathered from magazines, newspapers and company journals. Questionnaires were used because they are easy to read and answer. Literature was reviewed from those related to financial management in state corporations especially the sugar industry in Kenya. Extensive literature was reviewed on items of specific objectives influencing financial management in state corporations. The purpose of this study was not only to acknowledge contri butions of others but also to exam ine if the Iiterature supported the study.
Factors influencing levels of research funding to Kenyan public Universities by non-governmental agencies
(2011-08-19) Etyang, Linda Josephine; Abdul, Farida
This study explores the factors that determine the extent or levels of funding by nongovernmental agencies towards research activities in public universities in Kenya. The vision, mission and core values of many a university demonstrate the importance placed upon research activities within it (the university). Research has increasingly been the "indicator" of excellence of any university. We must appreciate however, that research involvement is very costly and therefore most universities are unable to effectively conduct them without some form of external assistance to supplement the funds that they receive from the government. It is for this reason that universities identify external donors who assist them financially or otherwise to conduct the research. To address this problem of research funding, this study examines the extent to which various factors influence the levels of grant funding to Kenyan public universities by non-governmental agencies. The study integrated both qualitative and quantitative methods. The approach was descriptive which was considered the most appropriate as it was able to explain the various factors. The study was conducted on a sample size of thirty seven randomly selected donor funding institutions where the target populations were the officers in - charge of research funds disbursement. Statistical Package for Social Sciences (SPSS) and Principal Components Analysis were used to analyse the data after which the report was compiled. The results derived from the study show that various factors influence research funding to universities, but each does to varying degrees. The most influential factor was the research meeting the donors' overall objective followed by universities submitting acceptable proposals. These are very critical to donor funding. The research established a basis for further research on donor funding. A similar study may be conducted in future, or in a different organization, for example private universities and the results compared. Areas could be on the adequacy of donor funding, or in cases of insufficient funding the subsequent implications that are likely to be blamed on funding scarcity.
Factors influencing saving for pension in the Jua Kali sector in Kisii Municipality, Kenya
(2012-07-04) Orina, Richard Ogari; Abdul, Farida; Jagongo, A. O.
Debate on how best to organize old age support in developing countries is growing. Old age poverty is widespread in these countries, with the informal old age support becoming more under pressure from adverse economic conditions, HIV/Aids, changes in household composition among other factors. The pension system in Kenya is fragmented and covers only about 15 per cent of the labour force. The enactment of the Retirement Benefits Act (1997) has seen some improvements aimed at widening coverage. The current legal framework in Kenya has a design that target participation of formal workers as compared to those in the informal sector. The informal sector popularly known as 'Jua kali' sector was not well covered by modem, structured pension schemes, till December 2009, when 'Mbao' Pension Scheme was introduced. This study intended to study the factors influencing saving for pension in the informal sector in Kenya and find out how these factors influence pension coverage in the informal sector. Pension awareness, contributory capacity, legal issues, literary levels and administration factors will be assessed to determine how each influence saving for pension in the informal sector in Kisii Municipality- Kenya. The research employed descriptive survey design because the design is relevant in assessing attitudes and opinions about events, individuals or procedures. The target population of the study was 721 jua kali sector workers in Kisii Municipality. A sample of 250 workers was selected for the study using stratified random sampling method. Data was collected using questionnaires. The collected data was then arranged and grouped according to particular research questions, tabulated and analyzed using descriptive statistics by Statistical Package for Social Sciences (SPSS). Multiple regression model was used to establish the relationship between the independent and dependent variables. The study revealed that the level of awareness on the pension schemes in Kenya partly influences the savings for a pension scheme. The awareness of the 'Mbao' pension scheme is low and subsequently the membership. Legal Issues such as the by-laws applied by many local authorities and the lengthy process of dealing with the government agencies significantly (P<0.05) affect the willingness of Jua Kali workers to save for pension. The level of education of the Jua Kali sector workers significantly (P<0.05) influence their willingness to save in a formal pension scheme. Administrative process hinders (P
Factors that limit access to formal credit by salaried borrowers at Kenya Research Institute (KEMRI) - Kilifi unit
(2012-03-26) Dzombo, Gift Kimonge; Abdul, Farida; James M.Muturi
There are many borrower-related and lender-related factors that limit access to credit by salaried borrowers at KEMRI-Kilifi-Unit. The borrower related factors may be economic, or attitudinal. Economic factors include low employment income which has an effect on the ability to qualify for credit facilities offered by mainstream credit institutions. Attitudinal factors may include fear of borrowing especially from mainstream credit institutions. Lender related factors include the terms and conditions of credit facilities in particular the interest charged, repayment terms, security/collateral requirements and unwillingness to lend to particular classes of borrowers due to credit risk considerations. The research methodology was descriptive in nature since the data to be collected was of personal nature. A structured questionnaire was the main data collection tool. Data was entered in Ms-Access 2003 and analyzed using SPSS and Microsoft Excel. Frequencies averages and percentages were computed and data was presented using graphs pie-charts e.t.c as may be relevant. The findings of this study indicated that the factors that limit access to credit by salaried borrowers at Kemri-Kilfi in the order of importance are interest rates, shortage of suitable credit products, security/collateral requirements and unfriendly repayment terms.
The impact of a stock split on the firm's share price on the Nairobi Stock Exchange.
(2013-01-16) King'ori, Justus Ndirangu; Abdul, Farida; Jane Karugu
The purpose of this study is to investigate the impact of a stock split on the firm's share price on the Nairobi Stock Exchange. A stock splits "is Just a finer slicing of a given cake" (Lakonishok and Lev, (1970)).In theory, this has no effect on the investors returns nor the shareholders value but it's not so in practice. Stock splits have been widely explored in the developed nations with the first study having been done by James Dolly in 1933 but are relatively new events in the Kenyan market; since the year 1994, the NSE registered its first stock split in 2004; that was for Kenya Oil Company. This was later followed by a series of 8 more splits by the end of the year 2008. Theories of stock splits and reasons for splitting have been explored but little is known about the effect of a split on the stock price in the NSE and the magnitude of the effect which is the focus of this study. A total of nine companies that split their stock between the year 2000 and 2008 will be studied to establish whether there were any abnormal returns recorded within the event window and calculate the magnitude of the returns. The event study methodology will be used to examine the behavior of firms' stock prices around the stock split. Abnormal returns within the event will be measured. Bar graphs representing average prices for the month prior and after the split will be drawn. Further; a graph of the abnormal return against cumulative abnormal return over the event window will be drawn to check the effects of the event on return. Conclusion and recommendations will be made based on the research findings.
The impact of earnings, debt/equity and net current assets on dividends for firms listed at the Nairobi Stock Exchange
(2012-07-06) Masanya, Hezron O.; Gerald Atheru; Abdul, Farida; Ndede, F.W.S.
This was a study on the impact of determinants of dividend policy on earnings distributed to shareholders. A four variables multiple regression models was used to assess the impact of measurable variables; earnings per share, debt/equity and net current assets on dividends. Measurable variables (earnings, debt /equity and net current assets) were used as independent variables while immeasurable variables such as; access to capital market, desire for control, target payout, investment opportunities, restriction on debts, legal consideration and growth prospects were used as intervening variables. The dependent variable was dividends. Past studies combined both measurable and immeasurable as independent variables. Data for 55 NSE quoted companies for the period 2002-2009 were analyzed by applying the SPSS in which F-test was used to ascertain the applicability of the model of the study ,Div=β0+ β1EPS+ β2 LogNCA+ β3/(D/E)%+€ and t-test tested significance of the independent variables used. It was found that an increase in dividends by shs 1 was as a result of increase in EPS by shs 0.628, decline in both net current assets and debt/equity by 0.011 and 0.040 respectively.
An investigation into factors that hinder access to housing loans: a case study of primary school teachers in Thika Municipality
(2013-02-19) Maina, John; Abdul, Farida
The study aimed at analyzing factors that hinder access to housing loans. The objectives of the study included finding out how remuneration, interest rates, collateral, land availability and transfers affect teachers in accessing housing loans. The study was important in that it would help the banks to appreciate their role in facilitating development of housing in Kenya. The government would also be able to develop policies that regulate and promote provision of loans by financial institutions. The study was limited within Thika Municipality. The study adopted descriptive research design. The study population comprised 480 public primary school teachers within Thika municipality. The study used both stratified sampling design and simple random Sampling to select a sample of 120 teachers who were used in data collection. The data was collected using questionnaire. The questionnaire included both open ended and closed ended questions. The data collected was coded and entered into the computer for analysis using SPSS. Data presentation was done by the use of pie charts, bar graphs, percentages and frequency tables. The study found out that majority of teachers do not own the houses they lived in. Teachers were found to earn very low salaries which made them to qualify for low loan amounts. The study also revealed that the high interest rates charged by financial institutions greatly discouraged teachers from accessing housing loans .Land availability was also seen as a prerequisite for accessing loans .Further, the study revealed that teachers transfers were a hindrance to the access to the of housing loans and affected their settling down. Based on the research findings, the study made a number of recommendations. Firstly, the government should consider improving on the teachers' remuneration which will empower them to secure higher loan amounts for housing purposes. Secondly, the financial institutions should consider lowering interest rates to lure more teachers to borrow from them .Thirdly, the banks should not overemphasize the need for collateral as a requirement for credit access. To solve the problem of land availability teachers should form investment groups through which they can purchase huge tracts of land and have it subdivided among themselves .The study also recommended that Teachers Service Commission should abstain from arbitrary transfers of teachers considering the destabilization such a phenomenon can cause.
An investigation into the challenges facing the financial performance of stock brokerage firms in Kenya
(2012-06-21) Kimunduu, Geoffrey Mbuva; Abdul, Farida; Jagongo, A. O.; Ndede, F.W.S.
Despite the introduction of the risk-based supervision (RBS) by the CMA to detect financial problems facing stock brokerage firms early enough, investors concern over the stability of several stockbrokers abound. The placement of some of the brokerage firms under statutory management within the last ten years points to the challenges these firms and CMA face in a market that is at its lowest ebb. This collapse can therefore be taken as an evidence of horrible institutional and regulatory failure. This study set out to investigate the challenges facing stock brokerage firms' financial performance. It aimed at finding out the factors affecting the financial operations of the brokerage firms in Kenya and the causes of their failure. The study also aimed at finding out the effects of the CMA regulations on the stock brokerage firms' financial performance. The study employed descriptive survey study. The target population was 113 managers whereby 108 of them are from the 27-brokerage firms; other four managers are from NSE and one from CMA-surveillance department. Purposive sampling was used to select one manager from NSE and CMA each and stratified random sampling was used to select 34 managers from both operating and non- operating brokerage firms. The main research instruments used to collect data was questionnaires and interview schedules. These instruments were tested for validity and reliability before any data collection. Data capturing was done using Excel software and entered into computer using statistical program for social sciences (SPSS) for analysis and the output was expressed in form of frequency tables, graphs and pie charts for interpretation purposes. In this study, it was evident that most top management in the stock brokerage firms supported the CMA regulations and real time reporting of information although not all were involved especially on financial issues. Also the study indicates that the stock brokerage firms' top management encourages qualified personnel and development of human resource (HR) department. But they rarely discuss and implement the findings/observations made through internal supervision of the employees. It was also noted that some of these firms don't have research and development departments and those, which have, they are inadequately staffed. The findings also show that these firms don't have a strong senior functional management team to ensure full adherence of the laid down CMA legal framework. The adoption of the right practices by some of these firms as per the findings, implies that the financial performance has been favorable in some firms and those which have ignored the same like failure to have a research and development department, failure to discuss internal supervision results and lacked a strong senior functional management team might have threatened their going concern status or they might have been put under statutory management. Brokerage firms, therefore should ensure that a senior functional management team is in place, establish a research and development department adequately staffed and put efforts in ensuring that the observations made during internal supervision of employees in the organization is discussed and implemented immediately. This will enhance public confidence and the financial performance of the brokerage firms and hence improve the economic growth in general.
An investigation of the factors determining access to housing finance by low and middle income earners in Nairobi
(2012-06-28) Mogaka, Ariemba Jared; Abdul, Farida; Jagongo, A. O.; Ndede, F.W.S.
The marginal and low-income groups face a number of obstacles in their quest to secure housing finance to improve their living conditions. Compared to the neighbors, Kenya has a more developed and effective finance system. However, it appears that the only beneficiaries from it are the middle and upper income groups of the housing market. Housing represents a major investment requiring a substantial capital outlay. As illustratedelsewhere in this document, personal residences account for 75% to 90% of household wealth in emerging market countries. In Kenya, it is estimated that out of a total 150,000 housing units required annually in urban areas, only an estimated 35,000 are produced. The shortage of housing is even acute for low-income households acute in urban areas, since only an estimated 6,000 units, or 20 per cent of the total number of all houses produced, cater for this group. In Kenya, only a small proportion of households of 10%, have traditionally qualified for mortgage loans from housing finance institutions, and borrowers generally consist of high net worth individuals. This study was aimed at determining the effect of level of income, interest rates, lack of a collateral, information asymmetry and requirement for a predetermined deposit on access to housing finance. The research design was a causal research whereby stratified random sampling technique was adopted to select a sample of 120 i.e. 1 % of the employees. A questionnaire was administered and the responses recorded. The data collected was analyzed using various measures of central tendency, measures of dispersion, correlation and ANOV A test. Also, various percentages and ratios were calculated. It was presented through the use of charts and graphs. Only 27% of the respondents owned houses while 65% rented their current houses and 7% stayed in houses owned either by their employers or stayed with relatives and friends. Only 23% financed the houses they owned from their personal savings. The rest got finances from the different institutions, for example, commercial banks, mortgage institutions, co- operative societies, investment groups and loans from their employers. Low monthly income was a factor that influenced the realization of home ownership. While 68% of the respondents said the interest rates are not a problem, 32% saw it as a big factor in accessing housing finance. Lack of security was a factor denying respondents access to finance. Majority of the respondents would not raise the high pre-determined down payment hence could not access housing finance. Therefore, the housing finance providers need to restructure the monthly repayments so that they are affordable to the low income earners. They should give attractive and affordable interest rates to encourage more people to own homes, the issue of down payments should be reviewed and the applications procedures should be made simpler. Also, the high pre determined down payments need to be reviewed so that those who cannot raise can still access housing finance. The nature of the collateral required to borrow especially from commercial banks need to be reviewed so that more options are available for the low and middle income earners.
Managing price risk using futures: case of oil companieis in Kenya
(2011-08-18) Nzuki, V. G.; Abdul, Farida; Muturi, J.
Disruptions and supply insecurity in the world oil markets as a result of growth in demand, shrinking buffers, speculation and underinvestment in exploration and refining have important implications in the use of financial tools in the management of oil price risk in Kenya. The study surveyed the use of futures contracts as means to mitigate price volatility by oil companies registered in Kenya. Daily data on the WTI crude oil futures and spot prices were used to work out the hedge ratios and the measures of hedging effectiveness resulting from using the six-month contract for the period 1997-2006. The study also sought to establish the derivatives used by Kenyan registered oil companies and the extent to which the oil companies in Kenya apply Futures to hedge price volatility and the ratio they hedge when they use the futures as a return balancing portfolio. Exploratory survey design involving both descriptive qualitative and quantitative analysis was adopted in conducting the study. The target population for this study was all the 364 registered oil companies in Kenya. A representative sample of 36 cases was selected using systematic sampling method. Semi-structured questionnaires were utilized to collect primary data while secondary data was sourced from the U.S. official energy website. The descriptive and OLS methods were used to analyses the data. Statistical data analysis was done using excel, SPSS and STATA. The results show that oil companies in Kenya seem to give due consideration to crude oil price volatility and as a consequence, they use a hybrid of derivatives, mainly futures market and forward contracts. Further, oil spot and futures prices don't seem to vary significantly as the two prices move together. The results also indicate that majority of the oil companies in Kenya hedge about thirty one to sixty percent of their oil volumes using futures market and this compares unfavorably to the optimal hedge ratio of 93%. The results imply that oil companies in Kenya are currently under-hedging their futures markets and are therefore exposed to high price risks resulting from the underlying price volatility. The companies are therefore recommended to scale up the value of the hedged oil volumes in line with optimal hedge ratio. Majority of the oil companies indicated that their use of futures contracts impacted positively on their profit margins. However, the oil firms indicated that they usually review their petrol pump prices whenever international crude oil prices go up. This implies that that even as the oil companies sustain their earnings as a result of hedging, they continue to pass the prices hikes to their customers. The findings of this study suggest that in terms of risk reduction, the MV method is an appropriate method for estimating optimal hedge ratio. The empirical results in this paper reveal that NYMEX crude oil futures contract is an effective tool for hedging risk. In conclusion, under the assumption that the hedger's objective is to minimize risk regardless of the risk-reduction trade off, that is the hedger is highly risk-averse, an OHR of 93% for Oil is recommended. By applying the optimal hedge ratio, a company may reduce their risk exposure up to 81.03% compared to an unhedged position. This means that the optimal proportion of future contracts that oil companies in Kenya should hold to offset the spot prices position is 93%. This implies that futures contract deserves consideration as a possible hedging instrument for international oil market price risks by oil firms in the country

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