Browsing by Author "Kimutai, Carolyne"

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    Capital Structure and Firm Efficiency of Deposit Taking Saccos in Kenya
    (Journal of Finance and Accounting, 2024-04) Gichinga, Raphael Njenga; Gatauwa, James; Kimutai, Carolyne
    The stability and resilience of SACCOs' performance stood out both during and after the coronavirus epidemic. However, the average variable returns to scale regarding the ratio of members' deposits to loans issued by SACCOs is inefficient, with a ratio of less than one. This inefficiency impacts revenues and, in turn, the interest paid on members' deposits.. This study sort to investigate the effect of capital structure on the firm efficiency of deposit taking saccos in Kenya and was anchored on financial intermediation Theory, economic efficiency theory and capital structure theories. The study adopted a positivist paradigm and causal research design and target population of all 176 saccos as at 2021.A data review guide was used to extract secondary quantitative data from the saccos published financial reports from year 2015 to 2021. Stata version 13 was employed to run descriptive and inferential statistics after computing efficiency scores using data envelopment analysis model and results presented in graphs and tables. The study findings indicate that saccos efficiency has an increasing growth trend though not optimal with variable return to scale contributing the highest levels in efficiency relative to scale efficiency while capital structure does not significantly affect level of efficiency. The study recommends that the deposit-taking savings and credit management board strategize and implement a rebate payment policy, comply with regulations on external borrowing, and improve strategies for collecting deposits. Additionally, the study suggests further research to determine if specific elements of capital structure significantly influence the efficiency of deposit-taking savings and credit societies.
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    Financial Risk Hedging and Financial Performance of Commercial Banks Listed in Nairobi Securities Exchange, Kenya
    (Journal of Finance and Accounting, 2025-01) Mohamud, Ahmed Mohamed; Kimutai, Carolyne; Kariuki, Grace
    In Kenya, financial institutions play a vital role in economic development by facilitating investments through receiving and lending funds, but they face market-driven financial risks that impact their performance, including a decline in Return on Assets over the past decade. This study aimed to determine the relationship between financial risk hedging techniques and the financial performance of Kenyan commercial banks listed on the Nairobi Securities Exchange (NSE). The study's specific objectives included forward contract, future contract, currency diversification of currencies, and swaps hence bank size is used as moderating variables. The agency theory, profit maximization theory, and enterprise risk management theory supported the study, providing a theoretical foundation for exploring the relationship between financial risk hedging and the financial performance of publicly traded commercial banks in Kenya. A descriptive correlational approach was adopted to target all publicly traded commercial banks in Kenya, with a census conducted to ensure comprehensive coverage. Secondary data was collected annually over a five-year period (2017–2021) from publications by the Nairobi Securities Exchange and the respective commercial banks, utilizing a structured data collection form. Diagnostic tests, including normality, multicollinearity, heteroscedasticity, and stationarity, were performed, confirming that the data met the required assumptions for analysis. The data was subsequently transformed to ensure that regression analysis could be conducted without producing spurious results. Descriptive statistics were summarized using means and standard deviations, while correlation and regression analyses were employed to test the hypotheses and draw meaningful conclusions. The correlation analysis revealed that using forward contracts as a hedging strategy has a strong positive and significant impact on financial performance. The futures, swaps, and currency diversifications also they had positive correlation against financial performance, and they had significant relationship. The regression study revealed a strong positive link between risk hedging and financial success, indicating a noteworthy correlation. Forward and future contracts were revealed to be risk-hedging approaches with significant effects on commercial bank financial performance, implying that currency diversification and swaps had a positive and significant effect on financial performance. Size had a strong favorable impact on the link between risk hedging and financial performance. The study recommends that bank executives and stakeholders should adopt robust risk management approaches and diversification strategies to enhance financial performance and stability in the banking sector. The Central Bank of Kenya (CBK) should regulate high-risk financial hedging products and require banks to disclose their use of financial derivatives, while the government should create supportive policies to promote these tools, ultimately strengthening financial institutions and fostering economic growth.
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    Financial Risk Hedging and Financial Performance of Commercial Banks Listed in Nairobi Securities Exchange, Kenya
    (Journal of Finance and Accounting, 2025-01) Mohamud, Ahmed Mohamed; Kimutai, Carolyne; Kariuki, Grace
    In Kenya, financial institutions play a vital role in economic development by facilitating investments through receiving and lending funds, but they face market-driven financial risks that impact their performance, including a decline in Return on Assets over the past decade. This study aimed to determine the relationship between financial risk hedging techniques and the financial performance of Kenyan commercial banks listed on the Nairobi Securities Exchange (NSE). The study's specific objectives included forward contract, future contract, currency diversification of currencies, and swaps hence bank size is used as moderating variables. The agency theory, profit maximization theory, and enterprise risk management theory supported the study, providing a theoretical foundation for exploring the relationship between financial risk hedging and the financial performance of publicly traded commercial banks in Kenya. A descriptive correlational approach was adopted to target all publicly traded commercial banks in Kenya, with a census conducted to ensure comprehensive coverage. Secondary data was collected annually over a five-year period (2017–2021) from publications by the Nairobi Securities Exchange and the respective commercial banks, utilizing a structured data collection form. Diagnostic tests, including normality, multicollinearity, heteroscedasticity, and stationarity, were performed, confirming that the data met the required assumptions for analysis. The data was subsequently transformed to ensure that regression analysis could be conducted without producing spurious results. Descriptive statistics were summarized using means and standard deviations, while correlation and regression analyses were employed to test the hypotheses and draw meaningful conclusions. The correlation analysis revealed that using forward contracts as a hedging strategy has a strong positive and significant impact on financial performance. The futures, swaps, and currency diversifications also they had positive correlation against financial performance, and they had significant relationship. The regression study revealed a strong positive link between risk hedging and financial success, indicating a noteworthy correlation. Forward and future contracts were revealed to be risk-hedging approaches with significant effects on commercial bank financial performance, implying that currency diversification and swaps had a positive and significant effect on financial performance. Size had a strong favorable impact on the link between risk hedging and financial performance. The study recommends that bank executives and stakeholders should adopt robust risk management approaches and diversification strategies to enhance financial performance and stability in the banking sector. The Central Bank of Kenya (CBK) should regulate high-risk financial hedging products and require banks to disclose their use of financial derivatives, while the government should create supportive policies to promote these tools, ultimately strengthening financial institutions and fostering economic growth.