Browsing by Author "Musau, Salome"

Now showing 1 - 13 of 13
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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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    Cost of Production and Financial Performance of Selected Poultry Rearing Farmers in Kiambu County, Kenya
    (International journal of Current Aspects in Finance, banking and Accounting, 2024) Kibunja, Elvin Taabu; Musau, Salome
    The study sought to investigate the effect of cost of production on financial performance of selected poultry rearing farmers in Kiambu County, Kenya. The study was guided by specific objectives including; the effect of feed costs, the effect of poultry equipment, the effect of brooding costs and the effect of medication costs on financial performance of selected poultry rearing farmers in Kiambu County, Kenya. The study was anchored on cash conversion cycle theory, transaction cost of economics theory, resource-based theory and operating cycle theory. The study adopted descriptive research design and a sample size of 350 respondents. Snow ball sampling method was used to reach the respondents since their location was not well defined. Primary data was collected using questionnaires that was pilot tested to ensure its valid and reliable. Descriptive statistics of mean, percentages and standard deviation and inferential statistics including multiple regression analysis were conducted. The study findings revealed that production cost including feeding cost, poultry equipment, brooding cost and medication cost all individually had a statistically significant effect on financial performance and therefore all the null hypotheses were rejected. Feeding cost and medication cost had negative statistically significant effect, hence concluding that when the cost for feeds and medication increases, they lead to a decrease in financial performance. Also increase in poultry equipment and brooding cost were found to positively affect performance concluding that when the farmers increase investment in relevant equipment and brooding, financial performance improves. On feeding cost and medication cost, the study recommends that the farmers through the regulators to lobby for subsidies from the government so as to lower the cost of production. The study further recommends the farmers to invest in heavy technology in terms of equipment and brooding costs since greatly increase their financial performance.
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    Digital Banking and Financial Inclusion of Women Enterprises in Narok County, Kenya
    (International Journal of Current Aspects in Finance, Banking and Accounting, 2020) Kisotu, David Melubo; Musau, Salome
    Financial inclusion is an important step in development, as access to finances can help the women to build money and lift themselves out of poverty. Lack of financial inclusion among women in Narok County is one of the many factors leading to financial exclusion and an introduction of digital banking is the remedy to its problems. Financial inclusion of women contributes immensely in empowering them. Digital banking in Kenya has been characterized by rapid technological change in the finance sector that has led to the development of mobile banking, online banking, ATMs and agency banking. The banking sector has undergone substantive transformation particularly from the year 2007. This study sought to establish the effects of digital banking and financial inclusion of Women Enterprises in Narok County, Kenya. Financial inclusion includes the provision of affordable financial services, which includes; access to payments and remittance facilities, savings, loans and insurance services by the formal financial system to those who tend to be excluded The study was anchored on finance growth theory and financial asymmetric theory. This study used descriptive research design and data was collected from the target population of all the 184 women owned enterprise in Narok County, Kenya. For this study census sampling was adopted to where all the population will be included in study since the number of target population is 184. Primary data was collected using a semi structured questionnaire to be administered to the women business owner through face to face interviews. The collected data was analysed using descriptive statistics methods; mean, mode, median, standard deviation, percentages and frequencies. Inferential statistical methods included multiple regression analysis was used to establish the relationship among variables. It was established that digital banking services significantly and positively influenced financial inclusion of women enterprises in Narok County. The study concluded that agency banking, mobile banking, online banking and ATM services significantly influenced the access and use of banking services by the locally based women enterprises in Narok County. It was further concluded that the women enterprises did not adequately use online banking due to limited literacy level, computer proficiency and internet availability. The study recommends that the available financial sector players in Narok County needs to sensitize SMEs especially women-owned to ensure that they are aware of the digital services available to be in the loop to enhance financial inclusion. The study recommends that the available digital banking providers need to improve formation of groups among the users of the services to enable improve usability. The study recommends further that the women enterprises managers and proprietors need to be in groups to develop each other and assist access, use and improve digital banking and financial inclusion.
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    Electronic Banking Channels and Financial Inclusion among Small and Medium-Sized Enterprises in Mogadishu, Somalia
    (journaleconomics, 2025-05) Warsame, Abdiaziz Omar; Wamugo, Lucy; Musau, Salome
    This study evaluated electronic banking channels effect on financial inclusion among Mogadishu’s small and medium enterprises. It assessed how mobile, Internet banking, Automated Teller Machine banking, and agency banking affect these enterprises financial inclusion, while allowing for financial literacy role. The following theoretical frameworks; technology acceptance model, financial intermediation theory, and financial repression theory were utilized. An explanatory approach was employed and primary data was used. According to Mogadishu Municipal Authority, there are 5,431 Small and Medium-sized Enterprises from various sectors, including retail, services, and manufacturing which served as the target population of this investigation. 461 respondnets were chosen through sampling of random stratification. Data was gathered using a semi-structured questionnaire. Employing descriptive statistics, correlation, and multiple regression analysis were utilize to interpret the quantitative data. The analysis findings were illustrated on tables and figures. Findings revealed that mobile banking significantly and positively (β=0.2452; ρ=0.000) affect financial inclusion; internet banks also noted a significant positive (β=0.3633; ρ=0.000) effect on financial inclusion; automated teller machine unveiled also significant positive effect (β=0.2167; ρ=0.000) on financial inclusion while agency banking uncovered inverse (β= -0.0997) and insignificant (ρ=0.082) effect on financial inclusion. The survey advocates that the government and financial institutions should collaborate to develop and promote tailored mobile banking solutions specifically designed for SMEs. By addressing the unique needs and difficulties confronted by these enterprises, such as limited access to credit and financial literacy, such initiatives can empower business owners to leverage digital financial services effectively.
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    Financial Inclusion, Bank Competitiveness and Credit Risk of Commercial Banks in Kenya
    (Sciedu Press, 2018-01) Musau, Salome; Muathe, Stephen M. A.; Mwangi, Lucy
    This paper provides an empirical analysis of the synergies and trade-offs between financial inclusion and credit risk of commercial banks in Kenya. The paper analyzed the effect of financial inclusion on credit risk and the mediation effect of bank competitiveness of commercial banks in Kenya. Financial inclusion was measured using three dimensions of bank availability, bank accessibility and bank usage, bank competitiveness used (HHI) while credit risk was represented by the non performing loans ratio. The study was anchored on financial intermediation theory supported by finance growth theory and asymmetry information theory. The target population was all the 43 commercial banks in Kenya. The study used secondary data collected from Central Bank of Kenya annual reports; commercial banks of Kenya published audited financial statements and annual data from Central Bureau of statistics of Kenya for the period of 2007-2015. Data was analyzed using descriptive statistics and panel multiple regression analysis. The results obtained found that bank availability, bank accessibility and bank usage had significant effect on credit risk of commercial banks in Kenya. Bank competitiveness was found to partially mediate the relationship between financial inclusion and credit risk. From the findings the study concluded that financial inclusion has a significant effect on stability of commercial banks in Kenya. The study recommends that commercial banks to formulate policies to ensure they remain stable and competitive while accommodating their activities to ensure financial inclusion, hence forming an all inclusive and stable financial sector over time. Keywords: financial inclusion, stability, competitiveness, credit risk, Kenya
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    Financial Inclusion, GDP and Credit Risk of Commercial Banks in Kenya
    (Canadian Center of Science and Education, 2018) Musau, Salome; Muathe, Stephen M. A.; Mwangi, Lucy
    This paper provides an empirical analysis of the synergies and trade offs between financial inclusion and credit risk of commercial banks in Kenya. The paper analyzed the effect of financial inclusion on credit risk and the mo deration effect of GDP on commercial banks in Kenya. Financial inclusion was measured using three dimensions of bank availability, bank accessibility and bank usage, while credit risk was represented by the non performing loans ratio. The study was anchore d on financial intermediation theory supported by finance growth theory and asymmetry information theory. The target population was all the 43 commercial banks in Kenya. The study used secondary data collected from Central Bank of Kenya annual reports; com mercial banks of Kenya published audited financial statements and annual data from Central Bureau of statistics of Kenya fo r the period between 2007 2015. Data was analyzed using descriptive statistics and panel multiple regression analysis. The results obtained found that bank availability, bank accessibility and bank usage had significant effect on credit risk of commercial banks in Kenya. GDP growth rate was found to partially moderate the relationship between financial inclusion and credit risk. From the findings the study concluded that financial inclusion has a significant effect on credit risk of commercial banks in Kenya. The study also recommended that commercial banks in Kenya to negotiate with Central Bank and the Ministry of Finance to put policies which support favorable macroeconomic variables especially GDP which influences the level of financial inclusion and bank credit risk.
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    Inventory Management Systems and Profitability of Small and Medium Manufacturing Firms in Nairobi City County, Kenya
    (International Academic Journal of Economics and Finance, 2025-05) Njagi, Rosaline Karimi; Musau, Salome
    Inventory management is a critical component of operational efficiency particularly in manufacturing sector’ small and medium-sized enterprises (SMEs). In Kenya’s Nairobi City County, many SMEs face challenges related to inadequate inventory management systems, which can significantly impact their profitability. Therefore, the present study sought to ascertain inventory management systems effects on profitability of Kenya’s Nairobi City County small and medium manufacturing firms with specific objectives on establishing effects of lean inventory system, Economic Order Quantity system and Just in Time inventory system. Dynamic theory of profit, theory of constraints, Economic Order Quantity model, Innovation Diffusion and Just-InTime model theory anchored the examination. Employing descriptive research, Nairobi’s SMMEs as target population was categorized as follows; food and beverage production, textiles and apparel, metal fabrication, plastics, woodwork and electronics. The respondents were the 1333 owners of the firms. The study employed a stratified sampling design and purposive sampling method for respondents’ selection where 308 forms the sample size. The research employed a questionnaire as its primary tool. The research systematically collected quantitative data which were analyzed using descriptive statistics, summarizing key features specifically mean and standard deviation which describe central tendency, variability, and distribution. Inferential statistics of correlation and regression analysis was adopted. The diagnostic tests comprised normality, multi-collinearity and autocorrelation tests. Tables and figures presented findings clearly. The study found that there was a positive significant relationship between establish lean inventory system, economic order quantity system and just in time inventory system and Kenya’s Nairobi City County SMME’s profitability. The study concludes that lean inventory solutions significantly lower the expenses associated with obsolescence, insurance, and storage by reducing excess inventory. The economic order quantity system allows businesses to release capital that would typically be engaged in surplus inventory, facilitating reinvestment in growth opportunities or enhancements to profit margins. The just-in-time inventory system removes waste from production, allowing businesses to enhance product quality. The study recommends that companies should ensure proper process standardization by implementing clear and consistent procedures for inventory management, which helps enhance efficiency and minimize errors. The businesses ought to focus on reducing ordering expenses by making fewer, larger orders to lower the administrative costs linked to ordering and receiving inventory. The companies ought to perform precise forecasting to accurately anticipate demand, which assists in ensuring that supplies arrive on time, reducing delays and surplus inventory.
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    Loan Restructuring and Financial Performance of Commercial Banks in Kenya
    (Journal of Accounting and Finance, 2024) Makui, Risper Siroma; Abdul, Farida; Musau, Salome
    The study sought to evaluate the influence of corporate restructuring on the performance of commercial banks in Kenya. The financial performance of Kenyan banking institutions has been improving over the last five years. However, there was a reported decline in profitability in 2020, dropping from 159.1 billion shillings to 112.1 billion shillings. The specific objectives were to determine the effects of loan restructuring, non-interest income restructuring, financial technology restructuring, and the moderating role of bank size in the relationship between corporate restructuring and financial performance. The study was based on four theories: the technology acceptance model, financial intermediation theory, agency theory, and profit maximization theory. It adopted a causal research design and included 40 commercial banks operating in Kenya as of December 31, 2020, as the population. Secondary data collected from the Central Bank of Kenya covered a two-year period from January 2020 to December 2021. The data analysis included the use of descriptive statistics and panel regression analysis. Diagnostic tests were also performed to confirm that the assumptions required for regression analysis were satisfied. The findings revealed that loan restructuring, non-interest income restructuring, and financial technology restructuring all had a positive and statistically significant impact on the financial performance of commercial banks in Kenya. However, bank size did not moderate the relationship between corporate restructuring and financial performance. In conclusion, corporate restructuring significantly influenced the financial performance of commercial banks in Kenya. Based on the findings, the study recommends that banking institutions should enhance their use of technology in banking services. Commercial banks can develop secure and tamper-proof banking applications with robust security measures. Additionally, they can leverage technology to assess customers' creditworthiness based on personal information. Finally, commercial banks should consider diversifying their operations to improve their overall performance.
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    Nexus between Financial Technology and Investment Decisions among Youths Involved in Sports Betting in Nairobi City County, Kenya
    (EdinBurg, 2024-12) Kipkirui, Nahashion; Musau, Salome
    AbstractPurpose:Increased access to technology and the widespread use of technology devices in Africa have created new opportunities for sports betting that were not previously available.Sport betting has taken off among Kenya’s youth population, who are mostly sports lovers. Poor investment decisions among the youths have led to these youths suffering huge losses.This study aimed to ascertain how financial technology influences the investment choices made by young people in Nairobi City County, Kenya who bet on sports. This study aimed to specifically investigate how data-based services, mobile services,anddigital platforms affect the decisions of young people who bet on sports. Methods:Prospect theory, technological acceptance theory, and heuristic theory applications were used to support this study. The study employed a descriptive research designand target population was 302,540 young people who wager on sports. In this study, 384 young people were sampled using a basic random sampling technique. Primary data was collected using a questionnaire and analyzed using correlation and regression analysis. Results:The study foundthat among young people who bet on sports, data-based services, mobile services, and digital platforms had a positiveand significant impact on investment decisions. Conclusion:The study concluded that financial technology has a significantly positive effect on investment decisions among youths involved in sports betting in Nairobi City County, Kenya. It is imperative for policymakers overseeing sports betting organizations to establish laws that facilitate the establishment of social media accounts by betting companies that effectively and efficiently disseminate information about sports bets.The government needsto lower the data subscription charges to allow the youths to place their bets.The management of sports betting organizations should keep funding mobile money technologies.
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    Revenue Diversification and Financial Performance of Commercial Banks, Kenya
    (Stratford Peer Reviewed Journals and Book Publishing (Journal of Finance and Accounting), 2024) Muriuki, Nicholas; Musau, Salome
    Financial intermediaries, providers of funds and primary depositors of savings are important to an economy. In Kenya, the banking sector has been facing challenges such as declining profitability since 2015, with a brief uptick in 2019 that was halted by the COVID-19 pandemic. Banks in Kenya proactively set aside funds to cover potentially risky loans in 2020, reevaluating their asset quality due to the unprecedented uncertainty caused by the pandemic, which put the international financial reporting standard (IFRS) 9 for projected credit loss provisioning to the test. The Kenyan banking sector must overcome various challenges, including economic downturns, illiquid stock markets, and other macroeconomic and bank-specific issues, despite demonstrating resilience and stability with robust capital and liquidity ratios in 2022. Thus this research investigated the effect of income diversification on financial performance of commercial banks in Kenya. Specifically, this research assessed the effect of fees and commissions, dividend income, foreign currency trading and transaction fee revenue on the financial performance of commercial banks in Kenya. The research was based on agency theory, portfolio theory and financial intermediation theory. The sample included 38 commercial banks selected from the years 2019 to 2023, and the research used a census sampling method to gather data from the whole population of these banks in Kenya. The study employed an explanatory research design, utilizing descriptive statistics such as mean and standard deviation, as well as inferential statistical tools like panel multiple regression analysis and Pearson correlation analysis, while various diagnostic tests, including multicollinearity, normalcy, linearity, homoscedasticity, Houseman test, and autocorrelation tests, were conducted to validate the model's predictions. The study found that fees and commission income had a positive and statistically significant relationship with the return on assets (ROA) of commercial banks in Kenya (β=3.085506, p=0.000), and dividend income also showed a strong and statistically significant correlation with ROA (β=1.939443, p=0.000). The p-value for foreign exchange trading income was 0.0050, indicating that it significantly affects the financial performance of commercial banks in Kenya. Furthermore, the p-value for transaction fee income was 0.0240, suggesting that commercial banks in Kenya heavily rely on cash from transaction fees to fund their operations. In conclusion, the research determined that there is a significant positive relationship between fees and commissions, dividend income, foreign exchange trading income, and transaction fee income on the financial performance of commercial banks in Kenya. The study recommended that commercial banks need to review transaction rates from time to time to ensure that they derive maximum income from loans. Further, banks need to participate in the securities market by trading in shares and other investment vehicles to expand their revenue base. Banks can diversify their investment options and focus on foreign exchange trading income since it improves their performance.
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    The Effect of Microfinance Services, Financial Literacy and Financial Health of Women Members of Selected Microfinance Banks in Kenya
    (Stratford Peer Reviewed Journals and Book Publishing (Journal of Finance and Accounting), 2024) Riro, Jerusha Kerubo; Musau, Salome; Njoka, Charity
    The World Bank identifies the financial health of women as crucial for poverty reduction and economic development. This study aimed to assess the impact of microfinance services and financial literacy on the financial health of women members of selected microfinance banks in Kenya. Specifically, it examined the effects of micro-credit, micro-savings, and micro-insurance services, as well as the moderating role of financial literacy. Guided by empowerment, gender stratification, finance growth, and information asymmetry theories, the study employed an explanatory research design within a positivist framework. The target population included 37,773 women with active deposit and loan accounts in 14 microfinance banks in Kenya, with a sample size of 384 respondents. Findings revealed that micro-credit, micro-savings, and micro-insurance services significantly enhance the financial health of women. Additionally, financial literacy positively moderates the relationship between microfinance services and financial health. The study recommends that microfinance institutions diversify their financial products beyond traditional micro-credit and implement educational programs to improve awareness and understanding of micro-savings services among women
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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