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Browsing by Author "Aluoch, Moses Odhiambo"

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Board Characteristics and Profitability of Tier III Commercial Banks in Kenya
(International Academic Journal of Economics and Finance (IAJEF), 2025-05) Muigai, Francis Ngugi; Aluoch, Moses Odhiambo
The study assessed the impact of corporate governance attributes on the profitability of Tier III commercial banks in Kenya. Despite their vital role in fostering economic growth and providing financial services, these banks continue to face persistent profitability challenges. The research examined key governance factors, including board independence, gender diversity, board size, audit committee structure, and directors' educational backgrounds, to determine their influence on financial performance. The study was anchored in several theoretical frameworks, including Agency Theory, Resource Dependence Theory, Organizational Theory, Audit Quality Theory, Human Capital Theory, and Stakeholder Theory. Using quantitative methods, including descriptive and correlational analysis, the study analysed data from the annual reports of Tier III banks in Kenya covering the period from 2018 to 2023. The findings indicated that board independence and gender diversity were positively correlated with financial performance, suggesting that autonomous boards and diverse leadership enhance decision-making and accountability, leading to improved profitability. Additionally, a wellstructured audit committee played a significant role in financial performance, highlighting the importance of effective oversight and expertise in risk management and regulatory compliance. However, the study found no significant relationship between board size or directors' educational backgrounds and profitability, suggesting that the composition and functional effectiveness of the board are more critical than its size or formal qualifications in driving financial success. Based on these findings, the study recommended that Tier III banks enhance board independence, increase gender diversity, and strengthen the structure and expertise of their audit committees to improve profitability. Furthermore, the study identified potential areas for future research, including the impact of digital transformation, corporate social responsibility, and long-term governance reforms on the financial performance of banks. This research contributes valuable insights into corporate governance practices that can enhance financial outcomes for banks in emerging markets, particularly in Kenya.
Board Characteristics and Profitability of Tier III Commercial Banks in Kenya
(International Academic Journal of Economics and Finance (IAJEF), 2025-05) Muigai, Francis Ngugi; Aluoch, Moses Odhiambo
The study assessed the impact of corporate governance attributes on the profitability of Tier III commercial banks in Kenya. Despite their vital role in fostering economic growth and providing financial services, these banks continue to face persistent profitability challenges. The research examined key governance factors, including board independence, gender diversity, board size, audit committee structure, and directors' educational backgrounds, to determine their influence on financial performance. The study was anchored in several theoretical frameworks, including Agency Theory, Resource Dependence Theory, Organizational Theory, Audit Quality Theory, Human Capital Theory, and Stakeholder Theory. Using quantitative methods, including descriptive and correlational analysis, the study analysed data from the annual reports of Tier III banks in Kenya covering the period from 2018 to 2023. The findings indicated that board independence and gender diversity were positively correlated with financial performance, suggesting that autonomous boards and diverse leadership enhance decision-making and accountability, leading to improved profitability. Additionally, a wellstructured audit committee played a significant role in financial performance, highlighting the importance of effective oversight and expertise in risk management and regulatory compliance. However, the study found no significant relationship between board size or directors' educational backgrounds and profitability, suggesting that the composition and functional effectiveness of the board are more critical than its size or formal qualifications in driving financial success. Based on these findings, the study recommended that Tier III banks enhance board independence, increase gender diversity, and strengthen the structure and expertise of their audit committees to improve profitability. Furthermore, the study identified potential areas for future research, including the impact of digital transformation, corporate social responsibility, and long-term governance reforms on the financial performance of banks. This research contributes valuable insights into corporate governance practices that can enhance financial outcomes for banks in emerging markets, particularly in Kenya
Board Characteristics and Tax Planning: Evidence from Manufacturing Firms Listed at the Nairobi Securities Exchange
(Research Beacon, 2025-08) Mwita, Emily Boke; Aluoch, Moses Odhiambo
Tax planning plays a critical role in enhancing the financial efficiency and regulatory compliance of listed manufacturing firms. In Kenya, where firms operate under dynamic tax legislation and increasing regulatory oversight, board characteristics have become an important determinant of effective tax planning. This study examined the influence of board characteristics—specifically board size, board age, board meeting frequency, and board education—on the tax planning practices of manufacturing firms listed at the Nairobi Securities Exchange. Anchored on stakeholder theory and resource-based theory, the study employed a descriptive research design and utilized secondary data drawn from financial statements and corporate governance reports of all eight NSE-listed manufacturing firms over the period 2019 to 2023. Tax planning was measured using the effective tax rate, while board attributes were captured using firm-level indicators. Data were analyzed using multiple regression analysis, with diagnostic tests conducted to ensure robustness. The findings revealed that board size, board age, and board education had a statistically significant influence on tax planning, while board meeting frequency had a weaker, marginal effect. The study concludes that board composition plays a pivotal role in shaping tax strategies and recommends that firms maintain optimal board sizes, appoint experienced and well-educated directors, and ensure board meetings incorporate strategic tax planning agendas. These insights offer practical implications for corporate governance reforms and tax policy development within the manufacturing sector in Kenya.
Board Structure and Financial Performance of Commercial and Service Firms Listed at the Nairobi Securities Exchange, Kenya
(IJMCI, 2023-12) Oboo, Ezra Ochieng; Aluoch, Moses Odhiambo
Board structure has specific country-based features that enables the efficient and effective handling of firms’ financial performance. In Kenya, the all-round board structure importance in enhancing the commercial and service industry performance cannot be over stated as this potentially affects the profitability of these firms and the industry at large. However, the ineffectiveness and poor management of firms by the board over the years has led to the decline in the commercial and service firms’ financial performance. With regard to this background, this inquiry attempts to close existing gaps in literature by investigating the manner in which board structure affects commercial listed and service listed firms’ financial performance at the Nairobi Securities and Exchange Kenya. With the interest variables to be board size, independence, tenure and age affecting the traded firms’ performance financially on Nairobi Securities and Exchange commercial and service firms in Kenya. An ex-post research design was utilized in this investigation. Relying on the presupposition in which the study employed, stewardship, agency and resources dependence theories were adopted to explain their relevance to the work. Eleven (11) listed commercial and service firms was used to determine how such board structure variables determine the listed firms financial performance between 2015 and 2022. Notably from the output, board size was noted to be insignificantly affected inversely Kenyan listed commercial and service firms’ financial performance; board independence was considered by the output to be positive on the financial performance noting significance; board tenure was also revealed to have positive and yet insignificant on financial performance; while board age was negatively in a manner that is insignificantly affected performance financially. The drawn recommendation put across is that the Kenyan management of these firms should consider cutting down the size of the board to improve performance financially.
Capital Adequacy and the Performance of Micro Finance Institutions in Kenya
(International journal of Innovative Research and Advanced Studies, 2023) Gathigia, Beatrice Muchee; Aluoch, Moses Odhiambo
Microfinance institutions are created with the intention of enhancing and fostering direct participation of impecunious groups and people in well-established enterprises as well as improving their socioeconomic position by offering efficient monetary as well as social assistance. The microfinance industry has nonetheless been affected by poor performance. For instance, the data from Association of Microfinance institutions showed that the performance declined between 2017 and 2018. There was a surge in Kenya’s microfinance sector losses in 2017 which contributed to a dramatic drop in financial income. While the micro-lenders struggle to manage a shifting business environment, losses reported by the sector are eroding the main and total capital levels of MFIs. This paper investigated how the financial success of microfinance organizations in Kenya is impacted by capital sufficiency. It distinctively aimed to determine the effect of management effectiveness on the performance of the microfinance institutions in Kenya, to evaluate the impact of asset quality on that performance, to ascertain the impact of total capital on that performance, and to ascertain the contribution of liquidity on that performance. A descriptive research approach was applied. The paper utilized the fixed effects model in analyzing secondary data collected from 14 Kenyan MFIs from 2017 to 2021. The findings reveal that the performance of microfinance institutions has been declining over the years. Furthermore, capital sufficiency and liquidity improve financial results while asset quality and managerial efficiency have a negative effect. This paper proposes that these institutions should adopt debt collection policies and practices that minimize loanee default rate.
Carbon Financing and Profitability of Renewable Energy Firms Registered Under the Energy and Petroleum Regulatory Authority, Kenya
(International Academic Journal of Economics and Finance, 2025-06) Wainaina, Kareithi Samuel; Aluoch, Moses Odhiambo; Kimutai, Caroline
Erratic profitability for renewable energy firms has pushed them to looking for additional sources of funding and carbon financing has emerged as a critical source which also contributes to achieving sustainable growth. By allowing businesses to generate revenue through the sale of carbon credits, carbon financing offers a powerful incentive for investing in cleaner technologies and processes. This financial mechanism not only supports companies in meeting regulatory climate commitments but also opens new revenue streams, increasing profitability and enhancing their financial resilience. Despite Kenya’s rich potential, high capital costs, inconsistent regulations, limited financing, and operational inefficiencies hinder firms’ financial sustainability. Additional issues like grid connectivity, market competition, and currency fluctuations further complicate their profitability. The study’s principal aim was to establish a link between carbon financing and profitability of renewable firms registered under Kenya’s Energy and Petroleum Regulatory Authority. More precisely, the study examined key carbon financing variables that include carbon credits, project initial cost, credit issuance and transactional costs, tax incentives and their effect on profitability. The study was based on and supported by the resource-based view theory, market-based theory and agency theory. The study employed a descriptive survey design and adopted a positivist research philosophy. The research design relied on primary data collected using a structured questionnaire that relates to carbon financing. The target population was fifty (50) renewable energy companies registered under Energy and Petroleum Regulatory Authority, and a population approach was used. Both descriptive and inferential statistics was used for data analysis with the help of Scientific Package Social Sciences (SPSS). Descriptive statistics including mean and standard deviation. A multiple regression model was performed to estimate the relationship between carbon financing and profitability. The results were presented on frequency tables, charts, and graphs. The results revealed that carbon credit, tax incentives, credit issuance and transactional costs and projects costs have significant effect on the profitability of renewable energy firms registered under the Energy and Petroleum Regulatory Authority. Further, firm size does have a significant moderating effect on the relationship between carbon financing and profitability of renewable energy firms registered under the Energy and Petroleum Regulatory Authority. Therefore, all the five hypotheses were not supported and the study concluded that carbon financing has significant effect on profitability of renewable energy firms registered under the Energy and Petroleum Regulatory Authority and this effect is strengthened by firm size. The study recommended that management should consider diversifying the types of carbon credit projects in which the firm engages. Expanding into various carbon credit initiatives, such as forest preservation and renewable energy projects, can help mitigate risks associated with fluctuations in carbon credit prices and market demand. The government should continue to support the development and growth of carbon credit markets, both locally and internationally. Policies should focus on creating a stable and transparent regulatory framework that encourages both local and foreign investments in carbon credit projects.
Corporate Board Diversity and Profitability of Construction and Allied Firms Listed at the Nairobi Securities Exchange, Kenya
(International Academic Journal of Economics and Finance (IAJEF), 2025-09) Hassan, Grace Ndanu; Aluoch, Moses Odhiambo
Globally, organizations in the construction and allied industry contribute greatly to the expansion and advancement of both the building sector and society as a whole serve as key pillars for Kenya's financial system. However, numerous indexed firms at the Nairobi Securities Exchange have experienced great financial challenges in recent years because of a number of concerns regarding control, such as board diversity which often resulted in the possibility of project stalling and has led to the sequestration, reorganization, and delisting of certain firms. The goal of this investigation is to look into the connection between corporate board diversity and the profitability of construction and related companies that are listed on the NSE in Kenya. The study also evaluated the impact of board nationality, education level, age, and gender composition on the firms' profitability. The theories of Agency, stewardship and stakeholder were all used as the study's theoretical foundation. The study and data analysis was executed using a descriptive research design. The people of interest for the research was the five construction and related companies that are registered with the Nairobi Securities Exchange. There was a design of census sampling used. The Nairobi Securities Exchange's construction and affiliated companies' financial reports was a source of secondary data. Panel regression was used to evaluate the data and determine how the study variables from the years 2017 to 2023 relate to one another. Several evaluation analyses was carried out to assess the suitability of the study framework. Ethical standards was put into considerations and adhered to accordingly. Findings from the outcome noted that board age has an insignificant positive effect on the profitability of the listed firms in Kenya with the conclusion that board age does not play a critical role in enhancing the firms’ profitability. Indicatively obtained from the outcome, board gender composition has an insignificantly positive effect on the profitability of these listed firms with the conclusion drawn that the composition of the board play an insignificant role in the determination of these firms profitability. Also, unveiled by the outcome, board education significantly affects the profitability of these firms positively with the study concluding that the educational background of the board play a major role in driving profitability of these firms. Unravelled by the outcome, board nationality has a significant positive effect on the listed firms’ profitability leading to the conclusion that the nationality of the board significantly drive profitability of the listed construction and allied firms in Kenya. The recommendation is that policymakers should implement initiatives aimed at increasing the educational qualifications of board members. This could involve establishing a regulatory framework that mandates a minimum level of educational attainment for board members, particularly in fields relevant to construction and management.
Corporate Board of Directors’ Activities and Profitability of Agricultural Firms Listed on the Nairobi Securities Exchange, Kenya
(International Academic Journal of Economics and Finance, 2024-05-21) Kieti, Winfred Mbinya; Aluoch, Moses Odhiambo
Growing concerns among different stakeholders about the need for increased value in companies that they own stakes in have affected not just a single company or region but also multinational corporations, giving them a worldwide reach. Most firms have been forced to liquidate in situations where there are prolonged periods of decreased profits and eventually the management loses control. The crucial socioeconomic significance played by agricultural firms is visible worldwide. However, their ability to survive is hindered by numerous barriers, which negatively impacts their profitability. The purpose of this study was to investigate how the corporate board of directors' activities affect the profitability of agricultural firms listed on the Nairobi Securities Exchange. The study's precise goals were to assess how corporate board meetings, committees, ownership, and tenure influence the profitability of agricultural firms listed on the Nairobi Securities Exchange. The study was based on four primary theories: agency theory, stewardship theory, stakeholder theory, and resource dependency theory. The study followed a causal research strategy. A data collection schedule was used to survey the six agricultural companies, to obtain information. This survey specifically targeted this small population. The acquired data underwent analysis utilizing both descriptive and inferential methodologies. The research findings were presented using tables and figures. To guarantee that ethical norms were followed, research permission from the National Commission for Science, Technology, and Innovation was required, as well as a letter of authorization from Kenyatta University. According to the study, both board meetings and board committees have a favorable and considerable impact on the profitability of agricultural firms listed on the Nairobi Securities Exchange. In addition, the study discovered that board tenure and share ownership have a positive and minimal impact on the profitability of agricultural firms listed on the Nairobi Securities Exchange. Recommendations of the study are, that the management should encourage the scheduling of regular and organized board meetings to ensure consistent oversight and strategic decision-making processes within the agricultural firms. These meetings should be properly planned to allow for thorough discussions and decision-making processes. Additionally, the study recommended that the firms should establish well-functioning board committees with members who are qualified and experienced in their respective fields of specialization. This is mostly applicable to those committees which are focused on strategic planning, finance, audit, and risk management. Further, while board share ownership and board tenure have a positive association with profitability, their insignificant effect suggests that governance efforts should not overly prioritize these factors. Instead, boards should diversify their focus to include other critical aspects such as strategic planning, risk management, and operational efficiency.
Credit Risk Management and Profitability of Commercial Banks in Nairobi City County, Kenya
(International Academic Journal of Economics and Finance (IAJEF), 2025-03) Ayieko, Vincent Nyakweba; Aluoch, Moses Odhiambo
The connection between credit risk management and profitability in Kenyan commercial banks is a significant issue, as the financial health and profitability of these institutions have been adversely affected by elevated non-performing loans. Thorough credit assessments and strong risk mitigation strategies are necessary for preventing defaults and maintaining stability; however, they can also result in decreased lending and lower revenue from interest income. The Kenyan banking sector faces a delicate balance between managing credit risk and maintaining profitability, which is further complicated by the country's fluctuating economic growth rates and political uncertainties that can exacerbate credit risk, leading to higher provisions for loan losses and reduced profitability. Lending remains the main purpose of commercial banks, making it the main cause of credit risk. Therefore, it is crucial for banks to reduce their exposure to credit risk in order to ensure their continued operation. The aim of this research was to analyse how credit risk management impacts the profitability of commercial banks in Nairobi City County, Kenya. Its main goal is to determine how credit approval, collateral policies, credit limitations, and solvency impact the profitability of commercial banks in Nairobi City County, Kenya. It was based on four theories: adverse selection theory, asymmetric information theory, credit risk theory, and lending credibility theory. Descriptive research design was utilized. The target group consisted of the 38 commercial banks located in Nairobi City County of Kenya according to the Central Bank of Kenya Report (2023). A census was conducted due to the population being fewer than 100 individuals. A questionnaire was used to collect primary data, while a data collection sheet was used for secondary data. The analysis was assisted by a multiple regression model. Various assessments were conducted, such as autocorrelation, heteroskedasticity, multicollinearity, normality, and stationarity tests. Data analysis involved the use of descriptive statistics as well as multiple regression analysis. The findings revealed significant insights into the components of credit approval, with borrower character and collateral being crucial factors. Regarding collateral policies, a strong belief in the link between asset quality and profitability emerged; highlighting that high-quality collateral enhances bank profitability. In terms of credit restrictions, there was a strong consensus on the importance of borrower payment history in determining credit eligibility, with stringent restrictions seen as a means to improve profitability by reducing default risks. The study concluded that that effective credit approval processes significantly enhance the profitability of these banks. Given the positive effect of credit approval on profitability, it is recommended that the management of commercial banks implement comprehensive credit approval processes that rigorously assess borrower character and financial history. While this study examined the impacts of credit approval, collateral policies, credit restrictions, and solvency on profitability, future research could investigate the interaction effects of these factors in greater detail.
Financing Options and Growth of Real Estate in Savings and Credit Cooperative Societies in Nairobi City County, Kenya
(International Academic Journal of Economics and Finance, 2024-08-16) Sangori, Roselyne Auma; Aluoch, Moses Odhiambo
The challenges confronting real estate enterprises in Kenya, especially within Nairobi City County, are substantial, particularly regarding financing decisions given the capital-intensive nature of their projects. The evident gap between annual housing demand and actual supply underscores the critical need for effective financing mechanisms to bolster the expansion and development of the real estate industry. The research concentrated on investigating the impact of various financing options available through Savings and Credit Cooperative Societies in Nairobi City County is particularly relevant, given Savings and Credit Cooperativess' role in offering financial services to their members. Evaluating the effects of mortgage financing, lease financing, savings financing, and equity financing on real estate growth can offer valuable insights into the feasibility of different funding avenues for these enterprises. Considering the moderating influence of real estate firm size on the relationship between financing options and growth rates enriched the analysis, acknowledging that a firm's size and scale can significantly shape its financing strategies and growth trajectory. Drawing on theoretical frameworks such as the lien theory of mortgage financing, resource dependency theory, transaction costs theory, and housing cycle theory provided a robust foundation for understanding the dynamics of financing and growth in the real estate sector. Adopting a descriptive research design, along with panel data analysis spanning a five-year period, facilitated a comprehensive examination of trends and patterns among real estate firms operating within Savings and Credit Cooperative Societies in Nairobi City County. By employing a census approach to collect data from the entire population of 72 real estate companies, the study ensured a representative sample, enhancing the reliability and validity of the findings. The study found a significant and positive effect between mortgage financing, lease financing, savings financing, and equity financing and growth of real estate in SACCOs. The result indicated a moderating effect on the relationship between financing options and growth of real estate firms in SACCOs. The study concluded that the real estate sector in Nairobi City County requires effective financing and strategic decision-making, relying on mortgage, lease, savings, and equity financing to optimize resource allocation and drive growth, with SACCO size significantly moderating the impact of these financing options on firm performance. Based on the study findings, policy recommendations include reducing mortgage costs through subsidies and regulatory reforms, increasing lease financing options via innovative structures and Public-Private Partnerships, boosting savings financing through mobilization programs, facilitating equity financing with improved market mechanisms, and optimizing SACCO performance through targeted training. The study enriches understanding by demonstrating the significant impact of various financing options on real estate firm growth, advancing theoretical frameworks, addressing methodological gaps, and providing practical policy recommendations to support sector expansion.
Firm Characteristics and Financial Performance of Microfinance Banks in Kenya
(International Academic Journal of Economics and Finance, 2024-10-07) Ouma, Cavine Onyango; Makori, Daniel; Aluoch, Moses Odhiambo
Kenya 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) performance of microfinance banks in Kenya. The study 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. 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. Therefore, the study 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.
Firm Characteristics and Financial Performance of Microfinance Banks in Kenya
(International Academic Journal of Economics and Finance (IAJEF), 2024-10) Ouma, Cavine Onyango; Makori, Daniel; Aluoch, Moses Odhiambo
Kenya 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) performance of microfinance banks in Kenya. The study 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. 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. Therefore, the study 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
Firm Characteristics, Interest Rate and Financial Performance of Microfinance Banks in Kenya
(International Academic Journal of Economics and Finance, 2024-10) Ouma, Cavine Onyango; Makori, Daniel; Aluoch, Moses Odhiambo
Microfinance Banks gives the forte to improve the economic activity of low-income individuals and eliminate poverty, resulting in economic progress. However, microfinance's Banks financial performance in Kenya has declined over time. The objective of this study is to investigate firm characteristics, interest rate and financial performance of microfinance banks in Kenya. The study was grounded on 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 analysed using descriptive and inferential statistics. The study used multiple regressions and Pearson’s Product Moment Correlation analysis. All ethical considerations were appropriately observed. Findings indicated 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 revealed that efficiency of management has an insignificant direct influence on financial performance of Microfinance banks. To address this, microfinance banks are advised to invest in comprehensive management training programs and capacitybuilding initiatives to improve operational effectiveness and decision-making processes. Earning ability, on the other hand, exhibits a considerable and direct influence on financial performance. 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
Microfinance Banks Characteristics and Credit Risk of Microfinance Banks in Kenya
(International Journal of Commerce and Innovation, 2023-10-31) Nyamai, Jonathan Sila; Aluoch, Moses Odhiambo
The study sought to determine the effect of bank characteristics on the credit risk of Kenyan microfinance banking institutions was done. The research was anchored by agency theory and adverse selection theory. The adoption of a causal research design was eminent to analyze thirteen banks for the period 2015 to 2021 based on the census approach. The study outcomes were arrived at using secondary data obtained under the guidance of the secondary data collection schedule. The output of the analyzed investigation demonstrated that capital levels had an inversely significant effect on credit risk; liquidity also significantly inversely affected credit risk with bank size positively affecting the credit risk of microfinance banks significantly. The recommendation amongst which included that the microfinance banks’ management in Kenya should strengthen banks’ liquidity measures to allow for loans that are non-performing hence, lowering the risk associated with such intermediation function of the Kenyan microfinance banks.
Organisational Performance as Outcome of Strategic Partnerships in the Context of selected Quickmart Supermarkets in Nairobi City County, Kenya
(International Academic Journal of Human Resource and Business Administration, 2025-04) Wanyama, Ecla Nekesa; Aluoch, Moses Odhiambo
Small and medium-sized enterprises are major drives of economies worldwide constituting more than ninety percent of the industries in both developed and developing economies. However the financial performance for most small and medium-sized enterprises is declining in most economies including Kenya due various factors including shift from being product-drive to market-driven to meet their complex financial needs. Globalization, technological advancements, competition, capital adequacy and lack of financial inclusion pose significant challenges to financial viability and growth of the enterprises. Despite several challenges small and medium-sized enterprises continue to play major roles to economies. This study investigated mobile microfinance services and financial performance of small and medium-sized enterprises in Trans-nzoia County in Kenya. The specific objectives included mobile credit facilities, mobile savings services and mobile money transfer or payments on financial performance of small and medium-sized enterprises. The study further explored how entrepreneurial training moderated the relationship between mobile microfinance services and financial performance of the small and medium-sized enterprises. The study was anchored on the resource-based view theory, modern portfolio theory, Modigliani and Miller’s capital structure theory, and the financial growth nexus theory from 2018 to 2023. The study employed descriptive research design, targeting 197 small and medium-sized enterprises in Trans-nzoia County. Small and medium-sized enterprises owners served as the unit of analysis, and respondents were selected through simple random sampling methods. Primary data was collected using a closed-ended, semistructured questionnaire utilizing a fivepoint Likert scale. The study ensured validity by achieving a satisfactory construct score of 0.7 or higher. Quantitative data was analyzed through descriptive, correlation and multiple linear regressions, and all ethical considerations were adhered to. The study revealed significant relationships between mobile microfinance services and small and medium-sized enterprises financial performance. The moderating effect of entrepreneur training was also tested and confirmed to influence this relationship. The recommendations highlighted the need for further studies to explore additional factors influencing small and medium-sized enterprises performance, as well as the importance of enhancing financial literacy and entrepreneurial training to maximize the benefits of mobile financial services for small and medium-sized enterprises.

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