Browsing by Author "Ndede, Fredrick W. S."
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Item Benchmarks and Yield of Unit Trusts in Kenya Akama Thaddeus Onyinkwa, Kenyatta University, Kenya(INTERNATIONAL JOURNALS OF ACADEMICS & RESEARCH - IJARKE, 2025-10) Jagongo, Ambrose; Ndede, Fredrick W. S.Investors expect money market unit trust schemes to deliver above-market financial returns, relying on the expertise of professional managers. However, many of these schemes struggle to consistently outperform the market, leading to diminished portfolios and missed investment opportunities. This underperformance can be attributed to various factors, including inappropriate benchmark selection, inefficient management practices, high operational costs, and potential conflicts of interest within certain institutional affiliations. To address these challenges, investors should carefully evaluate the performance of unit trusts against relevant benchmarks, consider the impact of management fees on net returns, and assess the ability of funds to generate real returns in different inflationary environments. Fund managers may need to reform their operational structures, enhance investment strategies, and optimize fee structures to improve performance and attract investors. The study aimed to investigate how benchmarks impact unit trust yields in Kenya. The research was guided by a conceptual framework that posited relationships between these variables and unit trust yields. The study employed an explanatory research methodology, utilizing panel data analysis over the period from 2013 to 2022. Data were collected from secondary sources, including Capital Markets Authority, Central Bank of Kenya, Kenya National Bureau of Statistics, and unit trust performance reports. The empirical review of existing literature informed the study's hypotheses and provided context for interpreting the results. The findings revealed that benchmarks significantly influenced the yield of money market unit trusts in Kenya. Money market funds affiliated with independent institutions and insurance companies exhibited higher yields compared to bank-affiliated funds. Benchmarks such as bank deposit rates, 182-Day Treasury Bill, and 364-Day Treasury Bill were positively related to fund yields. Based on these findings, the study recommends that fund managers carefully evaluate their institutional structures and closely monitor relevant benchmarks. Regulators should ensure fair competition and transparency in the industry, while investors should consider benchmark performance when selecting money market unit trusts.Item Board Characteristics and Profitability of Manufacturing and Allied Firms Listed at the Nairobi Securities Exchange, Kenya(The Strategic Journal of Business and Change Management, 2024) Kariuki, Candy Hellen Mwihaki; Ndede, Fredrick W. S.This study delved into the effect of board characteristics on the profitability of manufacturing and allied companies listed on the Nairobi Securities Exchange. Guided by stakeholder theory, institutional theory, and stewardship theory, the survey deployed a design that is explanatory and a census approach to unravel these complex relationships. The nine (9) listed manufacturing and allied firms were the intended populace in this investigation and secondary data gathered from audited and published yearly statements of the firms and reports published on NSE websites were gathered and analyzed using correlation analysis, panel analysis along with descriptive statistics. Data obtained was evaluated and accessed using diagrams, figures and table for drawing conclusions and recommendations from the interpreted results. Ethical standards were duly followed during this study. An examination of board independence effect on profitability was performed. The survey unraveled that board independence exerted a positive effect that is statistically significant on profitability. The effect of board activity was determined on profitability. Outcomes uncovered that board activity held a negative but statistically insignificant effect on profitability. The board size effect was also sought on profitability. The output unfolded that board size had an inverse and insignificant effect on the profitability. Further, the moderating effect of firm size on the nexus of board characteristics and profitability was analyzed. The survey unveiled that board characteristic linkage with profitability was insignificantly moderated by firm size. It was concluded that board independence is a major predictor of the NSE listed firms’ profitability in Kenya. Conclusively, board activity is not the major determinant of the firms’ profitability in Kenya. In conclusion, board size does not play a major role in determining the profitability of the firms in Kenya. It was concluded that firm size moderating role is insignificant on the nexus of board characteristics with profitability of firms in Kenya. The survey recommended that independence of the board should be increased to improve the profitability potentials of the firms in Kenya. The survey advised that board activity should be reduced to curtail the number of resources spent on the meetings held annually.Item Board Composition and Dividend Decisions of Companies Listed at the Nairobi Securities Exchange Kenya(IJCAB Publishing Group, 2019) Naburi, Jackline; Ndede, Fredrick W. S.Boards play a vital role in the field of corporate governance in corporate by acting as the overall governing body on all affairs of an organization. Dividend decisions determine the amount of retained earnings that serve as an internal source of finance for most listed companies. The main purpose of this study was to determine how board composition affected dividend decisions of companies listed at the Nairobi Securities Exchange. The study was guided by the following specific objectives: to determine the effect of Director Skills on dividend decisions of companies listed at the Nairobi Securities Exchange, to establish relationship between board independence and dividend decisions companies, listed at the Nairobi Securities Exchange, to examine the effect of board diversity on dividend decisions of companies listed at the Nairobi Securities Exchange and to investigate the effect of board tenure on dividend decisions companies listed at the Nairobi Securities Exchange. The study was anchored on the following theories: agency theory, stakeholder’s theory and stewardship theory. The study adopted a descriptive research design. The population of this study consisted of 700 top management staff drawn from all the 64 firms listed at Nairobi Securities Exchange. Stratified random sampling technique was used to select the sample. The sample size consisted of 254 top management staff of all the 64 listed firms at Nairobi Securities Exchange. The study used both secondary and primary data. Primary data was collected using questionnaires which were structured. Collected research data was analyzed using Statistical Package for Social Scientists software. The analysis was done using both descriptive and inferential statistics. This study provides an objective assessment of the available data and studies regarding the effect of board composition on dividend decisions of companies listed at the Nairobi Securities Exchange. The findings are appropriate and relevant for seeking a solution to combating poor board compositions among listed companies which improve their dividend decisions. This study has intellectual importance especially to other companies not listed on Nairobi Securities Exchange but facing similar problems with their board composition. It provides essential information for scholars seeking a wide variety of options towards approaching the issue of board composition and dividend decisions of companies. At 5% level of significance, directors’ skills, board independence and board tenure were found to be statistically significant while board diversity was not significant. The study used the F- statistic to test the overall significance of the regression model and the model was found statistically significant and suitable for this study. The model had an R2 of 0.7769 implying that variations in the four independent variables accounted for 77.7% of variations in the dependent variable which was further proof that the model was statistically significant and suitable for the study since it explained nearly all the variability of the dependent variable. It is against this backdrop that this research study arrived at conclusions including that profitability had the greatest influence on dividend payout for firms listed at the NSE and recommended among others, that companies listed at the NSE observe and manage well their policies dealing with the four independent variables. Finally, the study made various recommendations among them, further similar research using multiple economic factors. This will enable a thorough research as it gives a wholesome approach to establishing determinants of dividend payout for firms listed at the NSE.Item Cash Management Practices and Financial Performance of Tea Processing Factories in Mount Kenya Region, Kenya(IAJEF, 2024-10) Njore, Wainana Joseph; Ndede, Fredrick W. S.The study objective was to determine the effect of cash management practices on financial performance of Tea processing factories in Mount Kenya Region. The study was anchored on Cash Conversion Theory. The target population included 35 tea processing factories situated in the Mount Kenya region, with Managers of the manufacturing units and accountants in charge of the factories selected as the respondents, totaling 70 participants. Primary data was collected using a five-point Likert scale questionnaire, and the analysis utilized quantitative techniques. Robust cash management practices, such as budgeting and monitoring bank balances, correlate positively with financial performance, emphasizing the need for continued efforts to optimize financial outcomes within the industry. The study concluded that cash management practices significantly affects financial performance of Tea processing factories in Mount Kenya Region. The study recommended that the Tea factories need to optimize cash management practices to ensure financial discipline and sustained growth. Regular monitoring of financial performance indicators and fostering a culture of financial literacy among employees are crucial for enhancing financial health and competitiveness in the sector.Item Credit Information Sharing Practices and Financial Performance of Commercial Banks in Kenya(IJCAB Publishing Group, 2019) Odhiambo, Felix Ouma; Ndede, Fredrick W. S.The banking sector in Kenya suffered increased non-performing credits which prompted collapse of certain banks with an upsurge of loan defaulters. This was mainly attributed to the continued information asymmetry in the industry because of absence of a credit data sharing component. Commercial banks in Kenya have continued to encounter a number of challenges in obtaining information on customers’ payment history that helps guide on determining their ability to access and re-pay loan advancements. This has made more commercial banks to subscribe to credit reference bureaus since its establishment in 2008. As a result, commercial banks in Kenya have been experiencing high rates of Non-Performing Loans advanced to customers. The general objective of the study was to determine the effect of credit information sharing practices on financial performance of commercial bank in Kenya. The study specific objectives were to determine the effect of information accuracy, volume of lending and customer credit reports on financial performance of commercial bank in Kenya. The study was anchored by adverse selection theory, moral hazard theory and asymmetry theory. The researcher used a descriptive research design. The target population was five banks within Nairobi County including KCB, Equity Bank, Family Bank, Cooperative Bank and Barclays Bank. Primary data was collected using questionnaires and secondary data using financial statements of the commercial banks performance for the past 5 years. Data was analysed using descriptive statistics and inferential statistics. The study found that information accuracy, volume of lending and customer credit reports were positively and significantly related to the financial performance of the commercial banks. The study concludes that information accuracy increases the banks ' understanding of the applicants’ features and allows a more precise forecast of their probabilities of repayment, it decreases the information rents that banks could otherwise obtain from their clients and it can function as a borrower discipline tool. Lending volume enhances business banks ' enhanced operations, which in turn leads to banks’ enhanced economic results. Sharing of credit information has made commercial banks grant more loans on the basis of their reputation to deserving clients, thereby improving their profitability. When extensive consumer credit history information are easily accessible, it considerably decreases the cost of entering loan markets for fresh lenders, enhances competition and lowers credit rates. The research recommends that for enhanced results, all financial institutions in Kenya need to protect the precision of their platforms for data sharing. Regular site visits should offer credibility to the precision of the borrowers’ data. The data supplied by CRB should be used efficiently by commercial banks to lend to prospective borrowers. Only borrowers with a strong history of credit should be permitted access to the loans. The research also proposes that Kenya's commercial banks should base credit awards on the borrowers’ reputational assets, ensuring that the loan default rate is small, thus enhancing commercial bank performanceItem Determinants of Acquisition of Financial Services by Micro and Small Enterprises in Langata Sub-County of Nairobi County, Kenya(Kenyatta University, 2015) Ndede, Fredrick W. S.Globally Micro and Small Enterprises have been acknowledged as agents of economic development. They have been cited as being the seedbed to the medium and large enterprises. MSEs have been known for their crucial role in creation of employment, income generation and supplementing the provision for goods and services by large enterprises as well as eradication of poverty. The contribution of MSEs in the creation of wealth and support to the development and growth of medium and large scale enterprises has been enormous. In recognition of their contribution to development, several governmental and non-governmental agencies have been set up to support their activities. The failures of MSEs to recognize the important role played by external sources of finance usually pose a serious challenge to their functions. Since MSEs regularly suffer serious financial constraints, they are yet to realize their full potential as agents of economic growth. In Kenya for example, the failure rate of MSEs is still as high as 65 percent. The general objective of this study was to investigate the determinants of acquisition of financial services by MSEs in Langata Sub County of Nairobi County in Kenya. The specific objectives of the were to determine the relationship between legal and regulatory framework, level of education and entrepreneurial training, demographic factors as well as economic factors and acquisition of financial services by MSEs in Langata Sub County. The study design was descriptive with a target population consisting of 2,098 micro and small enterprises. A sample size of 250 businesses was determined through stratified random sampling technique by sector. Primary data on the selected businesses were collected using semi-structured questionnaires. The response rate was 231 firms representing 92.4 percent. Data was analysed using frequency distribution, chi-square tests, correlation analysis and multinomial regression analysis. The study found that there was a negative but significant relationship between legal and regulatory framework, level of education and entrepreneurial training and acquisition of financial services by MSEs. Demographic factors also had a negative but significant relationship with acquisition of financial services by MSEs in Langata. For practice the study recommended that: firstly, accessibility to financial services can be enhanced by financial intermediaries and the government by working on a framework that relaxes the complexities in loans acquisitions. Secondly the government should enhance entrepreneurship financial training, including cascading it through formal education system and thirdly, financial services providers should develop financial products that are inclusive enough to carter for the different demographic groups.Item The effect of adoption of management accounting practices on financial performance of commercial parastatals in Kenya(International Academic Journals, 2020) Apunda, Mary Auma; Ndede, Fredrick W. S.Purpose: The main purpose of this study was to investigate the effect of adopting management accounting practices on financial performance of commercial parastatals in Kenya. Methodology: The study employed a descriptive survey research design and targeted all the 119 commercial parastatals in Kenya. The study used simple random sampling technique to select 69 respondents from the commercial parastatals in Kenya. Qualitative and quantitative data was analysed descriptively. Inferential statistics was applied where multiple linear regression analysis was done through Statistical Package for Social Sciences (SPSS) to establish the relationship between the selected management accounting practices and the financial performance. The analysed data was presented graphically visually by use of figures and tables. Results: The results from the study concluded that management accounting practices including budget process, variance analysis, and breakeven analysis affected the financial performance of commercial parastatals in Kenya. From the findings, it was realized that budgeting process is critical in supporting financial performance of commercial organizations under the government parastatals. It was established that variance analysis determines the difference between tangible financial performance and the deliberate financial decisions emanating from the various personnel, which thereafter culminate to improved levels of financial performance of the organization. Break-even analysis affects financial performance of commercial parastatals. Unique contribution to Theory, Practice and Policy: The study recommended that the management of the parastatals should adopt budgeting in all financial activities of the firm as it is a central parameter that influences the overall financial performance and dictates how the commercial parastatals utilize assets to generate revenues. Commercial parastatals must have policies in place to help develop financial applications to be used in budgeting and invoicing for monitoring predictions that indicate whether the parastatals are in the right financial trajectories or otherwise.Item Effect of Capital Adequacy on Financial Performance of Commercial Banks in Kenya(The Strategic Journal of Business and Change Management, 2024) Wanjiru, Beatrice Nyokabi; Jagongo, Ambrose O.; Ndede, Fredrick W. S.The performance of the banks has been dwindling in Kenya. Kenya’s commercial banks’ ROA was 2.6 percent in 2017, 2.7 percent in 2018, 2.6 percent in 2018, 1.7 percent in 2019 and 3.3 percent in 2021 and indication of unstable profitability trend. In January, 2013, the CBK issued regulations referred to as prudential guidelines that outlines several aspects of risk management. However, it is not evidently clear through empirical studies how CBK prudential guidelines have impacted bank performance. The study general purpose investigated the extent central bank prudential guidelines has influenced bank performance. The specific objectives sought to establish the effect of capital adequacy on performance of commercial banks. Four theories guided the study; Institutional Theory, Public Interest Theory of Regulation, Stewardship Theory and firm growth theory. The explanatory research design was adopted involving 39 commercial banks in Kenya according to CBK 2022 comprising 9 tier I, 8 tier II and 22 tier III. A census of all the 39 commercial banks was undertaken. Descriptive and inferential tests were adopted in analyzing the data. The descriptive tests included means, minimums, maximums, standard deviation, Kurtosis and Skewness. The particular inferential tests were the unbalanced panel regression model. Prior determining the unbalanced panel regression model, diagnostic model assumption tests were tested. The diagnostic tests comprised the normality tests, serial correlation test, heteroscedasticity, and Multicollinearity and Hausman tests. Presentation of results were done through figures and tables. The findings from the study showed that capital adequacy positively influences the financial performance of commerce banks (β =0.0333113, p=0.027<0.05). It can be concluded that 67% of banks have attained required cash ratio of 0.5 to 1 but still 33% are still struggling with liquidity challenges. A recommendation is made that banks ought to strictly maintain requisite capital adequacy at all times. Tightening of liquidity measures especially taming illicit money is important in enhancing liquidity in the banks. The banks are supposed to revise existing regulations in order to mitigate the growing concern of non performing loans. The study recommends more audit meetings annually to ensure that all systems and activities of the bank are undertaken as required. There is need for review credits systems so that lending procedures are tightened.Item Financial Management Practices and Performance of Government Projects in Kitui County, Kenya(International Academic Journal of Economics and Finance, 2022-11) Musyoka, Jackson; Ndede, Fredrick W. S.Financial management entails the process of planning, organizing, controlling, and monitoring financial resources to achieve institutional goals and objectives. A descriptive research sought to examine the relationship between financial management practices (financial planning, financial monitoring, financial control, and financial evaluation) and performance of Kitui county government’s projects. The study sampled 67 participants from 207 employees of Kitui county government working under ministry of finance and economic planning. Data was collected using structured questionnaires and analyzed using descriptive and inferential statistics. The findings revealed that there is a insignificant positive correlation between financial planning and government project performance (r =0.129, P=0.340); a significant positive correlation between financial monitoring and project performance (r = 0.367, p=0.005); a positive and significant correlation between financial control and project performance (r =0.533, P=0.000); and a positive and insignificant correlation between financial evaluation and project performance (r =0.245, P=0.063). Therefore, the study concludes that financial planning and financial evaluation positively affects government project performance, but the effects are not significant. The study further concludes that financial monitoring and financial control have a positive and strong effect on the performance of government projects in Kitui CountyItem Management Fee and Yield of Money Market Unit Trusts in Kenya(Stratford Peer Reviewed Journals and Book Publishing, 2025-10) Akama, Thaddeus Onyinkwa; Jagongo, Ambrose; Ndede, Fredrick W. S.Management fee is a critical factor in the performance of money market unit trusts. Investors expect money market unit trust schemes to deliver above-market financial returns, relying on the expertise of professional managers to justify the fees charged. However, many of these schemes struggle to consistently outperform the market, leading to diminished portfolios and missed investment opportunities. This underperformance can be attributed to various factors, including the impact of management fees on net returns. Thus, this study investigated how management fees impact unit trust yields in Kenya. The study employed an explanatory research methodology, utilizing panel data analysis over the period from January 1st, 2013, to December 31st, 2022. Data were collected from secondary sources, including Capital Markets Authority, Central Bank of Kenya, Kenya National Bureau of Statistics, and unit trust performance reports. The findings revealed that management fees significantly influenced the yield of money market unit trusts in Kenya. Higher management fees were associated with lower yields, highlighting the importance of balancing fees and returns. The study found a consistent negative association between management fees and yield across different types of money market unit trusts, with insurance-affiliated funds showing the strongest negative correlation. Regression analysis indicated that a one-unit increase in management fees was associated with a 0.62176 decrease in yield, with management fees explaining 2.90% of the yield variations. Furthermore, inflation directly impacted fund yields and moderated the effect of management fees on yield performance. Based on these findings, the study recommends that fund managers critically examine and optimize their fee structures, balancing operational costs with competitive returns. Regulators should implement policies to promote fee transparency, consider setting guidelines or caps on management fees, and encourage performance-based fee structures. Investors should carefully evaluate fee levels when selecting funds, considering the trade-off between fees and potential yields. The study concludes that efficiency in fund management, rather than higher fee structures, may be key to generating superior yields in Kenyan money market unit trusts.Item Socio-Economic Factors and the Performance of Islamic Micro-Insurance Companies in Kenya(International Academic Journal of Economics and Finance, 2023-11) Mohamed, Abubakar Omar; Ndede, Fredrick W. S.Performance of Islamic micro insurance companies play an important part in the economic development of the insurance sector and the economy at large by providing insurance services to benefit the low-income part of a given society. However, all these benefits may encounter challenges as a result of social economic factors among other factors. It is on this basis that the current research examined the impact of socioeconomic factors on performance of Islamic micro insurance in Kenya. The precise objective of the study was: to ascertain the effects of income level on the performance of Islamic micro insurance in Kenya. The study was anchored using Agency theory, expected utility theory and fundamental cause theory. This study used descriptive survey design. The targeted respondents were 105 respondents comprising of 5 managers and 100 Takaful agents. The study utilized census. The study revealed that income level had a positive and significant effect on the performance of Islamic micro insurance in Kenya. The study concluded that low-income individuals have little access to formal financial services for the management of risks. This research advised Islamic micro insurance operators to offer training to their workers in order to strengthen their human capital base and advance the Takaful agenda in the insurance industry. There is a need for public education on the Islamic microinsurance options that are now available and how they might help reduce risk. The results of this research were useful for Kenyan insurance firms and policy makers as they enabled them to comprehend and recognize the advantages of micro insurance and how to overcome obstacles caused by socioeconomic variables that impact their performance.