Browsing by Author "Kimutai, Caroline"

Now showing 1 - 3 of 3
  • Thumbnail Image
    Item
    Board Characteristics and Financial Performance of Selected Microfinance Banks in Kenya
    (International Journal of Management and Commerce Innovations, 2024) Ibrahim, Fardowsa Ibrein; Kimutai, Caroline
    The study sought to examine the effect of board characteristics on financial performance of microfinance banks in Kenya. It delves into the effect of board size, gender representation, and board independence on the financial standing of these institutions. Theoretical framework comprises of agency, resource dependency, institutional and stewardship theories respectively. Research data was collected over time frame 2015-2022. To illuminate the hidden patterns and relationships within the data, a panel of secondary data extracted from audited financial reports and records was subjected to rigorous scrutiny. The outcome unveiled a positive but statistically insignificant effect of board size on financial performance; board composition of the selected banks affected the selected microfinance banks’ financial performance negatively with such effect being insignificant in Kenya; and board independence inversely but insignificantly affected these selected microfinance banks’ financial performance in Kenya. The survey suggests that the management of selected microfinance banks in Kenya should contemplate reducing the size of the board to enhance financial performance.
  • Thumbnail Image
    Item
    Financial Risk Management and Financial Performance of Investment Firms Listed at Nairobi Securities Exchange, Kenya
    (IJSRP, 2023-08) Chiru, Sylvia; Omagwa, Job; Kimutai, Caroline
    Financial performance is a crucial aspect for investment firms as it reflects their overall stability and communicates their financial well-being to investors. Some investment firms in Kenya are currently experiencing a decline in financial performance. This study focused on four dimensions of financial risk management (interest rate risk, exchange rate risk, inflation rate risk, and liquidity risk) to examine the effectiveness of risk management strategies in enhancing financial performance. The study equally assessed the moderating effect of firm size. Primary and secondary data sources were utilized, with a sample size of 40 respondents selected from the five listed investment firms. Data collection spanned eight years from 2014 to 2021. Multiple regression analysis, descriptive statistics, and diagnostic tests were employed. The study found that effective management of interest rate risk, exchange rate risk, inflation rate risk, and liquidity risk significantly affect financial performance. Additionally, firm size was found to moderate the relationship on financial performance. The study imparts valuable understandings regarding the significance of strategies for managing financial risks within investment firms. The study recommends management support for managing exchange rate risk through strategies like currency invoicing, leading and lagging, and exposure netting. It suggests the use of appropriate financial instruments such as forward rate agreements and options, as well as maintaining a diverse bond portfolio, to improve the management of interest rate risk. Effective liquidity risk management, including techniques such as cash flow forecasting and optimizing net working capital, is also highlighted. Managing inflation rate risk requires portfolio adjustment techniques, necessary spending adjustments, and continuous monitoring of changing inflation dynamics. Furthermore, the study recommends that policymakers in Kenya encourage investment firms to provide comprehensive risk disclosures in their financial reports. By implementing these recommendations, investment firms can enhance their financial performance and strengthen their risk management practices.
  • Thumbnail Image
    Item
    SASRA Prudential Regulations and Financial Performance of Deposit Taking Saving and Credit Co-Operative Societies in Kenya
    (Stratford Peer Reviewed Journals and Book Publishing, 2023) Gatu, Kamau Antony; Njehia, Bernard K.; Kimutai, Caroline
    Financial performance of Kenya’s deposit-taking savings and credit co-operative societies has been a source of concern, as evidenced by declining indicators over time. According to the SASRA study, profitability has declined significantly, as evidenced by a drop in Return on Assets (ROA) from 2.65% in 2020 to 1.59% in 2021. The purpose of this study was to investigate the effect of prudential requirements imposed by Kenya's Savings and Credit Cooperative Societies Regulatory Authority (SASRA) on the financial performance of Deposit Taking Savings and Credit Cooperative Organisations (SACCOs). The objectives of the study were to investigate the effect of liquidity, asset quality and capital sufficiency on and financial performance of deposit taking saving and credit co-operative societies in Kenya. The study was based on public interest theory, buffer theory and agency theory. The study employed a comparative research design and positivist research theory. The population studied in this study consisted of 175 licenced Deposit Taking SACCOs. Secondary data was used in the study, which was then analysed using descriptive and inferential statistics. Stata was used to conduct the analysis in this study. A multiple linear regression model was used to forecast financial performance. Diagnostic tests were performed to ensure that the linear regression model assumptions are not violated. The correlation results showed that liquidity has a negative correlation (-0.0497) with ROA. Capital adequacy showed a positive correlation (0.6710) with ROA. Similarly, asset quality had a positive correlation with ROA (0.5663). Panel regression results confirmed the importance of capital adequacy and asset quality in driving financial performance, as evidenced by highly significant coefficients (0.7140 and 0.2087, respectively) with p-values of 0.0000. The liquidity coefficient, on the other hand, was found to be -0.0008 with a p-value of 0.7380, indicating that changes in liquidity have a negligible impact on ROA. The study discovered that liquidity, capital adequacy, and asset quality explain 62.65% of the variation in financial performance (ROA). The study recommended that deposit taking savings and credit co-operative societies (SACCOs) should take a balanced approach to liquidity management in order to optimise financial resources and potentially increase returns, and employ a solid capital base to improve stability.