Browsing by Author "Birisi, Hesborn Birisi"

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    Analyzing the Effect of Liquidity on Financial Stability: Evidence from Kenyan Deposit-Taking Savings and Credit Cooperative Societies
    (Stratford Peer Reviewed Journals and Book Publishing, 2024-05-15) Birisi, Hesborn Birisi; Omagwa, Job; Musau, Salome
    Non-performing loans have been on the rise among DT SACCOs in Kenya over the past five years as evidenced by the increase in percentage of NPLs to gross loans in SACCO regulatory authority report of 2020. Consequently, if this trend is allowed to continue then this sector’s contribution to financial intermediation through provision of financial services will be negatively affected. In view of the above this study sought to investigate the effect of firm characteristics and financial stability of deposit taking savings and credit cooperative societies in Kenya. In view of the above this study sought to assess the effect of liquidity on financial stability of deposit taking savings and credit and cooperative societies in Kenya. The study was anchored on agency theory. Positivist research philosophy was adopted in this study. The study adopted explanatory research design. The target population for the study comprised 160 DT SACCOs which were fully operational in the period. A census approach was used for the study. This study utilized quantitative secondary data which was obtained from the society’s financial statements and supervision reports from the savings and credit cooperatives regulatory authority. The study utilized annual panel data for the period of 2017 to 2021. Multicollinearity test, normality tests, autocorrelation test, homoscedasticity, stationarity test and model specification test were carried out prior to panel data analysis. Data was analyzed using descriptive statistics, Pearson’s correlation analysis and panel regression analysis. STATA software was used for the analysis. The findings showed that liquidity had a strong, positive effect on NPLs ratio (β = 0.410056, p=0.003 <0.05). In view of the findings, the study recommends that DT SACCOs with high liquidity levels should consider implementing rigorous lending practices to ensure that loans are extended to creditworthy borrowers. Additionally, effective credit risk assessment and continuous monitoring of borrower repayment behavior are essential to minimize NPLs. DT SACCOs should focus on improving management efficiency by implementing cost-effective operational processes.
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    The Link between Capital Adequacy and Financial Stability: Evidence from Deposit Taking Savings and Credit Co-Operative Societies in Kenya
    (Journal of Finance and Accounting, 2024) Birisi, Hesborn Birisi; Omagwa, Job; Musau, Salome
    In Kenya, financial stability of Deposit Taking (DT) Savings and Credit Cooperative Societies (SACCOs) as evident in non-performing loans of DT SACCOS has been an issue of concern over the past few years due to evidence indication fluctuating trends. Consequently, should this continue then this sector’s contribution to financial intermediation through provision of financial services will be negatively affected. Though DT SACCOs have sought to enhance their capital adequacy, its effect on enhancement of financial stability remains an issue for further empirical investigation. In view this, the study sought to investigate the effect of capital adequacy on financial stability of DT SACCOS in Kenya. The study was anchored on agency theory. Positivist research philosophy was adopted in this study. The study adopted explanatory research design. The target population for the study comprised 160 DT SACCOs which were fully operational in the period. A census approach was used for the study. This study utilized quantitative secondary data which was obtained from the society’s financial statements and supervision reports from the savings and credit cooperatives regulatory authority. The study utilized annual panel data for the period of 2017 to 2021. Multicollinearity test, normality tests, autocorrelation test, homoscedasticity, stationarity test and model specification test were carried out prior to panel data analysis. Data was analyzed using descriptive statistics, Pearson’s correlation analysis and panel regression analysis. STATA software was used for the analysis. Ethical standards and regulations were adhered to accordingly. The regression results revealed that capital adequacy had a significant negative effect on NPLs (β=-0.3249614, p-value=0.000<0.05). In view of the findings, the study recommends that regulatory authorities in Kenya should take a proactive response in establishing and enforcing robust capital adequacy standards for DT SACCOs. In addition, higher levels of capital adequacy and improved management efficiency are associated with reduced NPLs ratio among DT SACCOs in Kenya, hence improved financial stability.
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    The Link between Capital Adequacy and Financial Stability: Evidence from Deposit Taking Savings and Credit Co-Operative Societiesin Kenya
    (Stratford Peer Reviewed Journals and Book Publishing, 2024-04) Birisi, Hesborn Birisi; Omagwa, Job; Musau, Salome
    n Kenya, financial stability ofDeposit Taking(DT) Savings and Credit Cooperative Societies (SACCOs)as evident in non-performing loansofDT SACCOShas been an issue of concern over the past few yearsdue to evidence indication fluctuating trends. Consequently, should this continue then this sector’s contribution to financial intermediation through provision of financial services will be negatively affected.Though DT SACCOshave sought to enhance their capital adequacy, its effect on enhancement of financial stability remains an issue for further empirical investigation.In view this, the study sought to investigate the effect of capital adequacy on financial stability of DT SACCOSin Kenya. The study was anchored on agency theory. Positivist research philosophy was adoptedin this study. The study adoptedexplanatory research design. The target population for the study comprised160 DT SACCOs which were fully operational in the period. A census approach was used for the study. This study utilized quantitative secondary data which was obtained from the society’s financial statementsand supervision reports from the savings and credit cooperatives regulatory authority. The study utilizedannual panel data for the period of 2017 to 2021. Multicollinearity test, normality tests, autocorrelation test, homoscedasticity, stationarity test and model specification test werecarried out prior to panel data analysis. Data wasanalyzed using descriptive statistics, Pearson’s correlation analysis and panel regression analysis. STATA software wasused for the analysis. Ethical standards and regulations wereadhered to accordingly.The regression results revealedthatcapital adequacy had a significant negative effect on NPLs (β=-0.3249614, p-value=0.000<0.05).In view of the findings, the study recommends thatregulatory authorities in Kenya should take a proactive response in establishing and enforcing robust capital adequacy standards for DT SACCOs. In addition, higher levels of capital adequacy and improved management efficiency are associated with reduced NPLs ratio among DT SACCOs in Kenya, henceimproved financial stability. Keywords:Capital Adequacy, Financial Stability, Deposit Taking, Savings and Credit, Co-Operative Societies