Browsing by Author "Wamugo, Lucy"

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    Credit Information Sharing and Performance of Selected Commercial Banks in Kenya
    (International Academic Journals, 2018) Oira, Sammy Machoka; Wamugo, Lucy
    Many banks in Kenya have been experiencing poor financial performance. Most of these financial problems arise from lack of credit information on the loan applicants which then affect their ability to recover both the principle and the interest. There have been efforts by the Central Bank of Kenya to advance credit information sharing on loan applicants among commercial banks so as to reduce the default rates among loan beneficiaries. This study aimed to establish the effect of credit information sharing on the performance of selected commercial banks in Kenya. The specific objectives were; To establish the effect of competitive information sharing on performance of commercial banks in Kenya; to assess the effect of credit scoring on the performance of commercial banks in Kenya; to establish the effect of efficiency in the information gathering process on the performance of commercial banks in Kenya and to assess the effect of information accuracy on the performance of commercial banks in Kenya. This study employed a descriptive research design. The study was anchored on information asymmetry theory, moral hazard theory and financial intermediation theory. The population of this study entailed all the 43 commercial banks licensed under the banking Act as at 31 December 2015 in Kenya. The study used primary and secondary data. Primary data was collected using closed ended questionnaires administered on drop and pick method while secondary data was collected from CBK annual supervision reports and the banks specific audited accounts. Data was analyzed using both descriptive and inferential statistics. The qualitative data collected was analyzed using mean, standard deviation, frequencies and percentages while inferential statistics including multiple regression analysis was performed to estimate the changes in performance following changes in credit information sharing variables. The study used tables and charts to present the analyzed data. From the findings, there exist a strong correlation between variables. The study established that the credit information sharing explained for a large proportion of changes in the performance of commercial banks in Kenya. The overall regression model was significant in determining credit scoring on credit information sharing and performance of commercial banks in Kenya as shown by the value of R2. The study established that credit scoring system has a significant effect on capability to repay loans. The study recommended that credit scoring system should give information on borrowers’ capability to repay loans, credit scorecards tools should be used to assess the behavior of prospective borrowers while good credit track record should reduce credit risks.
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    Dividend Decisions, Economic Growth and Firm’s Value of Firms Listed at Nairobi Securities Exchange Kenya
    (International Knowledge Sharing Platform, 2020) Gitagia, Francis K.; Wamugo, Lucy; Omagwa, Job
    The declining and highly volatile firm value observed in the NSE over the last decade has raised concern among scholars and financial practitioners. A declining and turbulent firm value implies lost and unstable shareholders wealth which in turn increases risk to the stock holders. It is therefore important to ensure that the firm value is enhanced to ensure growth and stable wealth of the shareholders. The study was carried out to determine the effect of dividend decisions, economic growth and firms’ value of selected firms listed at Nairobi securities exchange Kenya. The target population was the 46 non-financial companies listed in the NSE. A census of all non-financial firms listed in the Nairobi Securities Exchange was done. The study utilized secondary data from financial reports as published in the NSE handbook and Kenya National Bureau of Statistics for the period between 2008 and 2016. Panel regressions analysis and Pearson’s product moment correlation analysis were used for inferential analysis while means and standard deviations were used for purposes of descriptive analysis. Feasible Generalized Least Square (FGLS) regression results indicated that dividend decisions (p=0.012, <0.05) had a statistically significant positive effect on firm value. Whisman test of moderation further indicated that GDP had significant positive moderation effect on the relationship between each of the dividend decisions and the firm value. The study concludes that; dividend yield has a very strong positive relationship with firm value. That is, increases/decreases in dividend yield will be accompanied by increases/decreases in firm value. The study therefore recommends that corporate managers increase the dividend payout in times of profitability
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    Prudential Regulations and Profitability of Microfinance Banks in Kenya
    (AESS Publications, 2025-04) Odhiambo, Willis Omondi; Ndede, Fredrick (; Wamugo, Lucy
    Microfinance banks significantly add to the reduction of Kenya’s youth unemployment and poverty, which boosts the nation's economic development. Despite the implementation of prudential regulations aimed at enhancing financial stability and performance, many microfinance banks continue to struggle, as evidenced by a record decline in profitability over recent years. Therefore, this investigation examined prudential regulations effect on the Kenyan microfinance banks’ profitability. The effect of capital regulation on Kenyan microfinance banks’ profitability, liquidity regulation effect on Kenyan microfinance banks’ profitability and credit regulation effect on Kenyan microfinance banks’ profitability were examined. The study utilized fourteen microfinance finance banks which served as the target population. Census sampling was employed owing to the few microfinance banks in Kenya; hence, all the fourteen microfinance banks were utilized. Descriptive, correlation and panel regression technique was used as methods of data analysis. Findings uncovered that liquidity regulation insignificantly and positively affect the banks’ profitability; credit regulation possess inverse and insignificant effect on the banks profitability; capital regulation disclose a positive and significant effect on the banks profitability. The survey recommends that central bank should assess the current liquidity requirements and consider streamlining them to reduce unnecessary burdens on microfinance banks. This can involve revisiting reserve requirements, liquidity ratios, or other liquidity-related regulations to strike a balance between prudential safeguards and fostering profitability.