Browsing by Author "Gitagia, Francis"

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    Analyzing CAMELS Financial Indicators and the Performance of Microfinance Banks in Kenya
    (INTERNATIONAL JOURNALS OF ACADEMICS & RESEARCH ( IJARKE Business & Management Journal), 2024) Gitagia, Francis; Imaana Kimathi Andrew
    Microfinance institutions in Kenya play a crucial role in the economy, contributing 18% to the GDP and employing 20% of the population. However, the Return on Assets (RoA) for these institutions has declined from 3.5% in 2018 to 1.5% in 2022. This study aimed to analyze the impact of selected CAMELS financial indicators on the financial performance of Kenyan microfinance banks, specifically examining capital adequacy, asset quality, management efficiency, earnings ability, and liquidity. It also explored the moderating role of market concentration on these relationships. The study, grounded in several financial theories, targeted 14 microfinance banks and utilized descriptive research design and comprehensive data analysis through SPSS. The results, derived from Feasible Generalized Least Square (FGLS) regression, indicated that capital adequacy, asset quality, and management efficiency positively influence financial performance, whereas earnings ability has a negative impact. The study emphasizes the need for improved credit risk assessment, staff training, profitability, and liquidity management to enhance financial performance. Ethical guidelines were strictly followed throughout the research, ensuring integrity and reliability of the findings.
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    Financial Risk Management Practices and Asset Quality of Deposit Taking Saccos in Nyeri County, Kenya
    (International Academic Journal of Economics and Finance (IAJEF), 2025-09) Njuguna, Sarah Wambui; Gitagia, Francis
    The sustainability of deposit-taking SACCOs depends on asset quality since it directly affects their financial situation, stability, and capacity to properly control risks, therefore ensuring long-term survival. SACCOs nationally have battled changing asset quality with non-performing loans ranging from 1.98 percent to 2.4 percent between 2019 and 2023. Asset quality in Nyeri County has been even lower, ranging from -1.4 percentage to 3.5 percent, so stressing more difficult maintenance of financial stability than national norms. The research to determine the effect of; liquidity risk management practices on asset quality of deposit taking SACCOs in Nyeri County, Kenya. The time scope of the study was the period between 2019-2023. The study was informed by the Liquidity Preference Theory. The research used descriptive research design. The unit of analysis was 11 deposit-taking SACCOs in Nyeri County. The unit of observation was operations Managers, credit Managers and risk management Managers of each of the SACCOs. The study utilized census to select a sample of 33 selected managers. The study employed both primary and secondary data. Primary data was collected through a questionnaire while secondary data was obtained utilizing data collection sheet. Various diagnostic tests were carried out including. The tool of analysis was Statistical Package of Social Sciences Version 24. Both descriptive and inferential statistics were employed to analyze the data. Descriptive statistics utilized percentages, frequencies, measures of central tendencies (mean) and measures of dispersion (standard deviation) while inferential analysis involved use of correlational analysis and panel regression analysis. Data was displayed tables and graphs. The research found that effective management of liquidity ensures that SACCOs may meet their short-term financial obligations, manage withdrawal requests, and avoid liquidity shortages that can cause financial instability. Preserving asset quality and preventing defaults depend on this approach. The research concluded that the financial risk management policies in Nyeri County, Kenya, had poor quality more especially, SACCO asset quality is affected by effective strategies of financial risk management including liquidity risk management, strategic risk management, interest rate risk management. The research recommends that implementing best practices in liquidity risk management would allow SACCOs to ensure they can satisfy their financial obligations and avert liquidity difficulties. Regulatory bodies like SASRA should also set and apply risk management requirements more aggressively.
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    Firm Characteristics and Quality of Financial Reporting of Agricultural Firms Listed at the Nairobi Securities Exchange, Kenya
    (2024-09) Mmasi, Dennis Kupara; Gitagia, Francis
    Statistics show that over 70% of Kenya’s population is employed in agricultural sector. It is further revealed that agricultural sector account for about 27% of the nation’s GDP. Good financial reporting is critical in ensuring transparency, fostering accountability, and bolstering investor confidence within the sector. Even with the acknowledged importance of financial reporting, gaps still exist in empirical research exploring how firm characteristics influence quality of financial reporting (FRQ) among quoted agricultural companies. This inquiry sought to examine the effect of firm characteristics on FRQ of listed agricultural firms. Specifically, the study was carried out to ascertain the impact of profitability, leverage, growth, and liquidity on FRQ among listed agricultural firms. The data was obtained for the period spanning from 2019 to 2023. The project was hinged on agency theory, positive accounting theory, and signaling theory. The research followed a correlational study design to explore the set objectives. The target population constituted 7 listed agricultural firms. The sample size was obtained through a census of all the listed agricultural firms. The study employed secondary data obtained from company’s websites and audited financial statements to achieve the primary goal. The data obtained was analyzed through both inferential statistics such as ANOVA regression and Pearson’s Correlation and descriptive statistics. SPSS version 29 was used as the main tool of analysis. The results showed that firm growth, leverage, and profitability had weak negative effect on the FRQ. It was further revealed that liquidity positively and significantly influence FRQ. The study concluded that an increase in profitability, debt financing, and firm growth lowered FRQ while an increase in firm liquidity led to a higher FRQ. The study recommended that firms maintain strong liquidity positions because it is associated with better FRQ. Future research should determine the mediating role of corporate governance mechanisms on the relationship between firm characteristics and FRQ, and include other firms not listed at the NSE like private companies
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    Working Capital Management and Profitability of Tea Factories Managed by KTDA in Kirinyaga and Embu Counties – Kenya
    (Kenyatta University, 2024-07) Njagi, Peninah Nyaguthii; Gitagia, Francis
    The current study seeks to establish the effect of working capital management and profitability of tea factories in Kirinyaga and Embu Counties, Kenya. The overall objective of the current study was to ascertain the effect of working capital management and profitability of tea factories in Kirinyaga and Embu Counties, Kenya. The main objective of the study was to determine the influence of working management practices on profitability of tea factories in Kirinyaga and Embu Counties, Kenya. The research was anchored on pecking order theory, transaction cost theory, financing advantage theory, and cash conversion cycle. The study found the existence of a strong and positive correlation between Average payment period, Average Collection Period, Inventory turnover, and Cash Conversion on financial profitability of tea processing factories. Average payment period helps to manage WC since delays in bill payments is an approach that can help factories to access cheaper or competitive sources of funds. There was a positive correlation between inventory turnover and profitability performance in tea factories. Efficient and effective management of inventory enables business survival, profit maximization, and an efficient management of working capital. The study established a positive association between accounts receivable and profitability performance among tea factories, where a unit change in Average Collection Period has a positive change on profit performance in tea factories. Effective management of accounts receivables results in enhanced liquidity that enables tea factories to meet and realize their financial commitments and equally be able to seize opportunities emerging in the market. In conclusion, there is a positive relationship between Average payment period and profitability. Credit collection policies that enable low Average Collection Period will ensure healthy cash flows and enhanced liquidity position for the firm. Effective and efficient management of receivables results in the increase of firm size, sale, and enhanced liquidity. Inventory turnover negatively impacts profitability performance in tea factories, while efficient inventory management and effective control helps in achieving adequate operational results and lessening investment in working capital. Consequently, the study recommends that: factory firms should maintain optimal levels of financial leverage Tea factories must create a credit collection policy detailing the practices and procedures to be applied by the factories to achieve outstanding AR. Tea factories should generally maintain Average payment period higher than Average Collection Period to lessen investment in receivables, meet short time obligations and minimize cost of funds