RP-Accounting and Finance Department

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Digital financial innovations and financial deepening of commercial banks in Nairobi City County Kenya
(Strategic Journals, 2024) mundia, calor wanjira; makori, daniel
This study explored the effects of digital financial innovations on the financial deepening of Kenyan commercial banks so as to gain a better understanding of this phenomenon. The study aimed to investigate the following specific objectives: ascertain the impact of mobile phone banking, evaluate the influence of ATM banking, ascertain the impact of online banking and determine the effect of agency banking on the financial deepening of commercial banks in Kenya in the connection between financial innovations and financial deepening of commercial banks in Kenya. The study was conducted in Nairobi City County since that was where the banks have headquarters. The study was underpinned on the following theories the innovation diffusion theory, disruptive innovation theory, agency theory and the market power theory. This study was conducted using descriptive and explanatory research design that is cross sectional. The target audience consisted of 39 commercial banks that are licensed and functioning in Kenya as of December 31, 2022. The research involved secondary panel data. The primary source of secondary data was the annual banking report published by CBK. The analysis in this research was conducted using the SPSS version 20. Multiple regression was used to examine the correlation between the independent and dependent variables. The study's results were shown via the use of tables, charts, and figures. The study found that mobile phone banking, ATM banking, online banking and agency had positive significant effects on the financial deepening Kenyan commercial banks. The study concludes that mobile phone banking allows banks to reach a larger customer base, especially those in remote areas where physical bank branches are limited. With the widespread availability of ATMs across the country, customers no longer have to rely solely on bank branches for their banking needs. Online banking offers convenience and accessibility for customers in Kenya. Agency banking has significantly increased the accessibility of financial services for individuals in remote or underserved areas. The study recommends that commercial banks can invest in user-friendly interfaces and intuitive design to make mobile banking more accessible and convenient for customers. One-way commercial banks in Kenya are enhancing their ATM services is by increasing the number of ATMs across the country. With the increasing use of smartphones in Kenya, commercial banks can develop mobile banking apps that provide a seamless and convenient banking experience. One way to enhance agency banking in Kenya is to recruit more agents in rural and marginalized communities where traditional bank branches are scarce.
Sacco Based Financial Characteristics and Financial Performance of Deposit Taking Savings and Credit Co-operative Societies in Kenya
(Asian Journal of Economics, Business and Accounting, 2024) Tarus Carolyne; Simiyu,Eddie
In Kenya, Deposit-Taking Savings and Credit Cooperative Societies have faced significant challenges that have adversely impacted their financial performance. While existing literature has linked financial performance to financial characteristics, there remain conceptual and contextual gaps in empirical research. These gaps prompted the current study to examine SACCO-based financial characteristics as a tool for enhancing the financial performance of DT-SACCOs in Kenya. The study employed a descriptive research design, targeting a population of 190 DT-SACCOs. Using purposive sampling, 181 SACCOs that had been operational since 2018 were selected for analysis. Secondary data from the period 2018 to 2023 were utilized, and a quantitative approach was applied togenerate both descriptive and inferential statistics. Panel regression was used to estimate the direct relationship between SACCO-based financial characteristics and financial performance, while also appraising how the Sacco Societies Regulatory Authorityrisk regulations moderated this relationship. The study concluded that capital adequacy had a statistically significant positive effect on financial performance, indicating that stronger capital buffers enhance profitability. In contrast, asset quality and financial investments showed statistically significant negative effects, suggesting that poor loan quality and mismanaged investments negatively impact financial outcomes. Liquidity, however, was positively associated with financial performance, underscoring the importance of maintaining adequate liquidity reserves. Moreover, the relationship between SACCO-based financial characteristics and financial performance was significantly moderated by SASRA risk regulations, highlighting the critical role of regulatory oversight in shaping financial outcomes. Based on these findings, the study recommends that DT-SACCOs in Kenya should: maintain optimal capital adequacy levels to safeguard financial stability; prioritize careful asset quality management and regular loan monitoring to develop sound lending policies; optimize financial investments to ensure sufficient funding for operational expenses; and maintain adequate liquidity levels to meet financial obligations and improve overall performance
Effects of Liquidity Risk Management Practices on the Financial Performance of Automobile Companies in Nairobi City County – Kenya
(IJARKE, 2023-10) Kinyua, Devis Kimanthi; Aluoch, Moses Odhiambo
The automobile industry is an important component of economic development. It accounted for about 3% of the world's Gross Domestic Product in the year 2021. In Kenya, the industry is responsible for 7.8% contribution to the Gross Domestic Product. However, the Performance of Finances and profitability of the automobile industry is gaining scholarly concern due to the increasing risks associated with financial management. This study sought to determine how liquidity risk management practices affect the financial performance of automobile companies in the County of Nairobi, Kenya. An exploratory research design was adopted to investigate the characteristics of the phenomenon. The 56 registered automobile companies in Nairobi City County were targeted as the population. The census approach was used to select all the 56 automobiles. In each automobile company, two respondents were selected using purposive sampling: Chief Executive Officer and Financial Officers. Key-informant interview guide and structured questionnaires were employed to gather data. Content analysis was utilized for the study of qualitative data. Version 25 of the Statistical Packages for Social Sciences was additionally applied to quantitative data to generate inferential and descriptive statistics. Hypotheses were tested using F-test at 95% confidence interval. Statistical outputs were presented in tables. It was found that the liquidity risk management had a moderate positive relationship. It implied that financial risks management practices positively related with performance of finances in automobile companies. The study concluded that an increase in liquidity resulted to a positive increase in the performance of finance in automobile companies. It was recommended that the government to develop better policies for effective regulation of financial management amongst the automobile companies
Treasury Budgeting Mechanisms and Financial Performance of Selected Commercial Parastatals in Kenya
(INTERNATIONAL JOURNALS OF ACADEMICS & RESEARCH, 2024) Joel,Evans Okemwa; Simiyu, Eddie
The study sought to research the impact of budgetary control on the economic overall financial performance of the industrial parastatals in Kenya from the year 2013 to 2023. This was accomplished by specifically analyzing the influence of budgetary planning on the financial performance of the industrial parastatals in Kenya. The study used a descriptive research design and targeted the chosen 10 industrial parastatals in Kenya from the listed 46 business parastatals in Kenya. The study utilized primary data collected through structured questionnaires from commercial parastatals. The gathered data was coded and cleaned using SPSS software. Descriptive statistics provided an overview of the sample, including demographic details of the respondents, as well as measures such as central tendencies, standard deviation, range, and variance. The results were presented using tables, charts, themes, and graphs. Causal relationships were evaluated using R², F values, and beta coefficients, with a significance level set at 0.05, and coefficients were tested accordingly. The findings indicate that budgetary planning (β=0.277, p=0.000), have a significant and positive effect on the financial performance of industrial parastatals in Kenya. The moderation analysis revealed that budgetary planning has a positive but marginally non-significant effect when moderated by treasury mechanisms. Thus, the study provides a clear direction for improving financial performance through several key budgetary practices. Strengthening budgetary planning by developing guidelines, investing in training, and using advanced tools will create a more strategic approach to financial management
Financing Structure and Firm Value of Agricultural Companies Listed at Nairobi Securities Exchange – Kenya
(INTERNATIONAL JOURNALS OF ACADEMICS & RESEARCH, 2024-07) Choge, Kiplimo Kevin,; Gitagi, Francis
The agricultural sector is crucial for the economic growth of Kenya. The industry employs around 40% of the whole population and over 70% of Kenya's rural population. Nevertheless, agricultural companies registered on the NSE have seen a decrease in their company value, as shown by their market capitalization. The market capitalization of agricultural listed enterprises had a substantial reduction from 6161 points to 2789.64 points between 2018 and 2022, indicating a major decrease in company value. The study sought to evaluate the effect of financing structure on the firm value of agricultural firms listed in the NSE. The research was based on the pecking order theory, Modigliani and Miller theory, and the shareholder value theory. The target demographic consisted of the seven manufacturing enterprises that listed in the NSE. A comprehensive survey was conducted on all the manufacturing companies listed in the NSE. The analysis used secondary data from financial reports as issued in the NSE handbook and KNBS for the time frame of 2018-2022. Various diagnostic tests including Multicollinearity, normality, Stationarity, heteroscedasticity, autocorrelation and test for random or fixed effect was carried out. Inferential analysis was conducted utilizing panel regression analysis and Pearson's product moment correlation analysis, whereas descriptive analysis included calculating means and standard deviations. The findings of the Feasible Generalized Least Square (FGLS) regression demonstrated that short term debt, retained profits, and equity financing had a statistically significant and positive impact on business value. In contrast, it was shown that long-term debt had a statistically significant adverse impact on the firm value. Correlation analysis demonstrated that short term debt and equity financing had a weak positive correlation with firm value; long term debt had strong positive correlation with firm value whereas retained earnings had strong negative correlation with firm value. The study concludes that increasing short term debt, equity s and retained leads to higher firm value. Contrary, long term debt leads to reduced firm value. Consequently, the study recommends that, companies increase short term debt, retained earnings and equity financing in their financing structure. The firms should reduce long term debt in their financing structure to enhance firm value
valuating Effects of Digital Transformation on Quality of Financial Reporting in Nairobi City County Government, Kenya
(Asian Journal of Economics, Business and Accounting, 2024) Chepkorir Faith; Kariuki , Grace
Despite the Nairobi City County Government's implementation of policies designed to ensure highquality financial reporting and enhance accountability and transparency, these measures have not fully achieved their intended outcomes. Persistent deficiencies in financial reporting quality, coupled with an increase in deceptive practices, have undermined public trust. While digital transformation holds promise for improving financial reporting, existing empirical research is limited by conceptual, methodological, and contextual gaps. This study evaluates the impact of digital transformation on financial reporting quality within Nairobi City County Government. The target population comprised 287 officers from the Finance and Economic Planning Department, from which a sample of 105 respondents was purposively selected. Utilizing both descriptive and explanatory research design the study employed structured questionnaires to collect primary data, which were analyzed to produce descriptive and inferential statistics. The study concludes that big data technology has a significantly positive effect on quality of financial reporting (p<0.01; r= 0.618; β = 0.185) as block chain technology has a significantly positive effect on the quality financial reporting (p<0.01; r=;0.447 =0.254) and cloud computing technology has a significantly positive effect of quality of financial reporting in Nairobi City County Government (p<0.01; r= 0.696; β= 0.599). Additionally, there is a positive significant effect of robotic process automation on the quality of financial reporting in Nairobi City County Government (p<0.01; r= 0.5.2.5; β=0.368). Furthermore, readiness to innovate significantly moderates the relationship between digital transformation indicators and financial reporting quality, with a moderating effect of 5.07%, which negatively impacts financial reporting quality in Nairobi City County Government. The research would provide decision-makers in Nairobi City County Government with valuable insights into the dynamics of digital transformation. This information would be used to formulate regulations aimed at enhancing the quality of financial reporting
Cost of Production and Financial Performance of Selected Poultry Rearing Farmers in Kiambu County, Kenya
(2024-05) 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.
Financial Technology Services, Government Regulations and Financial Inclusion of Small-Scale Fish Farmers in Homa Bay County, Kenya
(Stratford Peer Reviewed Journals and Book Publishing, 2024) Opiyo, Fredrick Omondi; Musau, Salome Mwongeli; Irungu, Anthony Mugetha
This study explored the impact of FinTech and Government Policies on Financial Inclusion for small-scale fish farmers in Homa Bay County, Kenya. The study focused on how access to finance has been widened through agency banking, mobile money and online banking services among these people who had low incomes or were marginalized. The research also examined whether government regulations affect the relationship between fintech channels and financial inclusion. The study was underpinned by Innovation Diffusion Theory, Financial Intermediation Theory, Technology Acceptance Theory and Public Interest Regulation Theory. This study employed causal research design with a sample size of 495 small scale fish farmers using stratified random sampling technique that yielded 144 respondents. Data analysis involved multiple regression, correlation analysis and diagnostic tests that utilized SPSS 26.0 for data analysis. The results showed that agency banking; mobile money services and online banking together explained 58.1% of variation in financial inclusion among the farmers indicated by R squared of 0.581.The findings revealed that Agency Banking had significant effect on financial inclusion (β = .231, p = .001 < .05), as well as Mobile Money Services (β = .196, p = .019 < .05) and Online Banking Services (β = .410, p = .000 < .05). Therefore, the study concludes that Agency Banking; Mobile Money and Online Banking play important role in enhancing financial autonomy among small scale fish farming communities through increased access to bank accounts, secured transactions processes and agent incomes respectively. In view of the findings, the study recommends that financial
Fundamental Risk Factors and Financial Performance of Insurance Firms in Kenya
(Research Publish Journals, 2024-09) Mutswenje,Vincent; Sifuna, Douglas; Omagwa,Job
The financial performance of Insurance firms plays a vital role in increasing the sector's market value and leads to the economy's overall growth. There exists substantial empirical literature on fundamental risk factors and the financial performance of commercial banks and microfinance institutions. However, few studies have delved much into the relationship between fundamental risk factors and the financial performance of Insurance firms. The downward financial performance trend of the Insurance firms in Kenya is a cause for concerns among various stakeholders. The financial performance has shown a downward trend from 2011 to 2018 before a little bullish movement in 2019. The study investigates the effect of fundamental risk factors on the financial performance of Insurance firms in Kenya. Operating ratio measured financial performance for the Insurance firms as applied by the Insurance regulatory authority. The study's specific objectives are to determine the effect of inflation, exchange rates, and interest rates on the financial performance of Kenya's insurance firms. The study further establishes the moderating effect of capital adequacy on the relationship between fundamental risk factors and the financial performance of the Insurance firms in Kenya. This study adopts Positivism philosophy and an Explanatory research design. The study the Modern portfolio theory, expectations, and the Liquidity preference theory. The study uses quarterly data obtained from the insurance firms in Kenya and uses STATA software to analyze. Data analysis through Descriptive statistics, Pearson's simple correlation, Time-series regression analysis over a time scope of 10 years, Interest rates have a positive but not statistically significant effect on operating ratio as indicated by the p value (P = 0.081 < 0.05). Furthermore, Inflation rates has positive but statistically insignificant effect on Fundamental risk factors with p value (P = 0.863 < 0.05), exchange rate has a positive statistically significant effect on operating ratio (P = 0.000 < 0.05). rom 2014-2021. The hypothesis was tested at the 0.05 level of significance; findings reveal that Interest rates have a positive but statistically insignificant effect on operating ratio at p value of 0.081. Furthermore, Inflation rates has positive but statistically insignificant effect on Financial performance with p value (P=0.863), exchange rate has a positive statistically significant effect on operating ratio (P = 0.000). Therefore, the research suggests the insurance firms should be keen to quantify and control the effect of foreign exchange gain or loss on their financial performance The firms should also take into account the impact of interest and exchange rates to mitigate the impact of their volatility on financial performance
Effects of Debt Financing on the Financial Performance of Investment Firms Listed in Nairobi Securities Exchange – Kenya
(IJARKE Journals, 2024-06) Gathogo, Stephen Mwai; Irungu, Anthony Mugetha
Achieving optimal financial performance is imperative for businesses, especially in the competitive landscape of global markets marked by intense rivalry and an oligopolistic structure. Many companies listed on the Nairobi Securities Exchange (NSE) have adopted a strategy of leveraging debt to bolster their asset base and enhance profitability. Despite the anticipated benefits for operational support, historical trends underscore a concerning pattern. Companies heavily reliant on loans within their shareholders' wealth have consistently incurred substantial losses, leading to severe credit crises where their debts surpass their total wealth. This study, employing a descriptive survey design focusing on five NSE-listed investment firms, investigates the repercussions of debt financing on financial performance. Drawing on data from diverse sources, including CMA reports and online resources, the quantitative analysis reveals a clear correlation: debt financing corresponds to a decline in the financial success of investment firms. With a mean debt-to-equity ratio (D/E) of 1.247, suggesting adequacy for shortterm obligations, it aligns with the consensus that D/E should not exceed 2.0. The study underscores the need for policymakers and regulatory bodies, particularly the CMA, to formulate effective guidelines and policies for prudent debt management among listed investment firms.
Financial Technology and Financial Inclusion among Youth Operating Businesses in Central Business District Nairobi City County, Kenya
(IJRISS, 2023-12) Nyokwoyo, Douglas Ouso; Musau, Salome; Kosgei, Margret
Financial inclusion is the cornerstone of savings and investment initiatives among. Youth who are financially included have greater access to credit from financial institutions and can create and expand investment opportunities. In addition, the inclusion of youth in financial systems improves access to financial education and planning, which increases employment opportunities and ensures that previously marginalized and alienated youth are reintegrated into the economy. The purpose of this study was to evaluate the effect of financial technology on the financial inclusion of youth owned businesses in Nairobi’s central business district. The researcher targeted a large population of approximately 32100 youth owned business enterprises in the central business district of Nairobi. Convenient sampling was used to select 500 respondents aged between 20 and 35 years, per the definition of youth by the Department of youth affairs. The researcher employed a descriptive research methodology. Using open-ended questionnaire, primary data was collected. The research discovered that the utilization of mobile phones, access to the internet, and the provision of agency services have a noteworthy impact on enhancing the financial inclusion of young individuals. The research findings suggest that the achievement of financial inclusivity for enhancing the participation of young individuals in economic frameworks is facilitated by the utilization of cellular devices, the utilization of online technology, the utilization of services through intermediaries, and the acquisition of financial literacy. Therefore, the formulation of strategies aimed at enhancing financial inclusivity among the youth in the central business district of Nairobi should prioritize the enlargement of entry and amplification of financial technology solutions.
Organizational Structure and Financial Performance of Insurance Companies Listed at Nairobi Securities Exchange, Kenya
(International Research Journal of Economics and Finance, 2025-01-21) Kiraithe, Mawira Robin; Kimutai, Caroline
In Kenya, insurance companies have been experiencing a decline in their financial performance assessed by ROE. In the turbulent and competitive business environment, firm characteristics have been playing a vital role in shaping overall financial performance and market competitiveness. The general aim of this study was to establish the interplay between organizational structure and financial performance of listed insurance companies listed at the NSE in Kenya. This research was guided by the growth of the firm theory. This research applied descriptive research methodology. The target population of this research was 6 firmslisted at the NSE. The period under study spanned from 2018 to 2022. A Census ofthe 6 listed insurersin the NSE in Kenya was performed. This study utilized secondary data, extracted using a data extraction tool. Descriptive and inferential statistics were utilized in data analysis. Descriptive statistics comprised of standard deviation, mean, minimum and maximum. The relationship between independent and dependent variables was established using inferential statistics such as multiple regression and correlation analysis. The study found that organizational structure positively and significantly influences the financial performance of insurance companies listed at the NSE in Kenya. The study recommends that regulatory bodies, like the Insurance Regulatory Authority (IRA), encourage insurance companies to adopt organizational structures that improve decision-making, efficiency, and accountability, alongside supporting training and performance evaluations. It also suggests a decentralized approach to organizational restructuring, empowering lower-level employees, to enhance operational efficiency, innovation, and overall financial performance
Agency Banking and Profitability of Commercial Banks Listed at Nairobi Securities Exchange, Kenya
(International Academic Journal of Economics and Finance (IAJEF), 2024-10-23) Mukhtar, Hassan Matan; Aluoch, Moses Odhiambo; Suva, Mark
Despite the instrumental role played by listed commercial banks in Kenya in terms of employment creation, these institutions are currently facing problems of the profitability. For instance, across the period 2018-2022, the value of return on equity has averaged at 13.15% against similar industry figures in South Africa estimated at 20.15%. This provide a clear indication that majority of the listed commercial banks in Kenya are underutilizing their equities to generate profits for shareholders. The inquiry’s essence was to establish the effect of agency banking liquidity agency banking fee and bank size on profitability. The transaction cost theory, market power theory and public interest theory of bank regulation. Relevant empirical studies were reviewed to inform the development of the conceptual framework anchored the inquiry. Positivist philosophy and explanatory design were used. The study adopted direct regression model and moderation regression model to achieve the analysis of the findings. This study targeted 12 listed commercial banks in Kenya and census was used since the population is small. Information in its secondary nature will be gathered with aid of data collection SPSS for descriptive analysis as well as inferential analysis aided by the sheet on a period from 2018 all trough to 2022. Prior to this, diagnostic tests covering Heteroscedasticity Test, multicollinearity and normality were done and appropriately interpreted. Results presentation was in tabular and graphical means. As part of the ethical concern, the study sought for relevant authorization documents. The study established that agency banking fee had significant effect on profitability of the listed commercial banks in Kenya. Furthermore, firm size was not significant while interaction term was significant and hence firm size as deduced to be a partial moderator variable. In conclusion, agency banking was a significant predictor of profitability of a financial institution. It was recommended larger banks in tier I and II should leverage the economies of scale they enjoy in the market to invest heavily in agency banking for more profit generation.
Inflation targeting and its effect on food price volatility in Kenya
(ajoeijournals, 2024-06) Meni, Fredrick; Kimunio, Isaac
Purpose of Study: The study investigates the effectiveness of inflation targeting in stabilizing food prices by examining its impact on food price volatility and the broader economic factors influencing this instability, including global commodity prices, exchange rate fluctuations, climate variability, and regional conflicts. Inflation targeting, introduced by the Central Bank of Kenya in 2011, aims to control inflation and stabilize prices. Problem Statement: Despite achieving its overall inflation objectives, Kenya continues to face volatile food prices, posing significant socioeconomic challenges, especially for low-income households that are heavily burdened by high food costs. Methodology: The study aopted non-experimental research design with secondary quarterly time series data from 2011 to 2022 sourced from the Central Bank of Kenya, Kenya National Bureau of Statistics, and the Food and Agriculture Organization, this research analyzes factors including the Consumer Price Index, exchange rates, and food prices using a Vector Error Correction Model (VECM). Result: The findings indicate that, while inflation targeting has succeeded in controlling overall inflation, it has struggled to reduce food price volatility. This suggests the need for more comprehensive policies that go beyond traditional monetary strategies to stabilize food prices effectively. Conclusion: The results highlight the necessity for a multifaceted approach involving monetary, fiscal, and trade policies to manage food price dynamics, improve food security, support farmers' incomes, and enhance overall economic stability in Kenya
Inflation Targeting and its Effect on Food Price Volatility in Kenya
(African Journal of Emerging Issues, 2024-06) Meni, Fredrick; Kimunio, Isaac
Purpose of Study: The study investigates the effectiveness of inflation targeting in stabilizing food prices by examining its impact on food price volatility and the broader economic factors influencing this instability, including global commodity prices, exchange rate fluctuations, climate variability, and regional conflicts. Inflation targeting, introduced by the Central Bank of Kenya in 2011, aims to control inflation and stabilize prices. Problem Statement: Despite achieving its overall inflation objectives, Kenya continues to face volatile food prices, posing significant socioeconomic challenges, especially for low-income households that are heavily burdened by high food costs. Methodology: The study aopted non-experimental research design with secondary quarterly time series data from 2011 to 2022 sourced from the Central Bank of Kenya, Kenya National Bureau of Statistics, and the Food and Agriculture Organization, this research analyzes factors including the Consumer Price Index, exchange rates, and food prices using a Vector Error Correction Model (VECM). Result: The findings indicate that, while inflation targeting has succeeded in controlling overall inflation, it has struggled to reduce food price volatility. This suggests the need for more comprehensive policies that go beyond traditional monetary strategies to stabilize food prices effectively. Conclusion: The results highlight the necessity for a multifaceted approach involving monetary, fiscal, and trade policies to manage food price dynamics, improve food security, support farmers' incomes, and enhance overall economic stability in Kenya.
Fundamental Risk Factors and Financial Performance of Insurance Firms in Kenya
(Research Publish Journals, 2024) Sifuna, Douglas; Omagwa, Job; Mutswenje, Vnincet
The financial performance of Insurance firms plays a vital role in increasing the sector's market value and leads to the economy's overall growth. There exists substantial empirical literature on fundamental risk factors and the financial performance of commercial banks and microfinance institutions. However, few studies have delved much into the relationship between fundamental risk factors and the financial performance of Insurance firms. The downward financial performance trend of the Insurance firms in Kenya is a cause for concerns among various stakeholders. The financial performance has shown a downward trend from 2011 to 2018 before a little bullish movement in 2019. The study investigates the effect of fundamental risk factors on the financial performance of Insurance firms in Kenya. Operating ratio measured financial performance for the Insurance firms as applied by the Insurance regulatory authority. The study's specific objectives are to determine the effect of inflation, exchange rates, and interest rates on the financial performance of Kenya's insurance firms. The study further establishes the moderating effect of capital adequacy on the relationship between fundamental risk factors and the financial performance of the Insurance firms in Kenya. This study adopts Positivism philosophy and an Explanatory research design. The study the Modern portfolio theory, expectations, and the Liquidity preference theory. The study uses quarterly data obtained from the insurance firms in Kenya and uses STATA software to analyze. Data analysis through Descriptive statistics, Pearson's simple correlation, Time-series regression analysis over a time scope of 10 years, Interest rates have a positive but not statistically significant effect on operating ratio as indicated by the p value (P = 0.081 < 0.05). Furthermore, Inflation rates has positive but statistically insignificant effect on Fundamental risk factors with p value (P = 0.863 < 0.05), exchange rate has a positive statistically significant effect on operating ratio (P = 0.000 < 0.05). rom 2014-2021. The hypothesis was tested at the 0.05 level of significance; findings reveal that Interest rates have a positive but statistically insignificant effect on operating ratio at p value of 0.081. Furthermore, Inflation rates has positive but statistically insignificant effect on Financial performance with p value (P=0.863), exchange rate has a positive statistically significant effect on operating ratio (P = 0.000). Therefore, the research suggests the insurance firms should be keen to quantify and control the effect of foreign exchange gain or loss on their financial performance The firms should also take into account the impact of interest and exchange rates to mitigate the impact of their volatility on financial performance.
Cash Management Practices andFinancial Performance ofLivestock Marketing Cooperative Societies inMarsabit County, Kenya
(Business Management, Entrepreneurship and Innovation, 2025-02) Hido, Dae Malle; Koori, Jeremiah
An objective evaluation of the performance of livestock cooperative societies is imperative in order to ascertain whether they fully reward members for the use of their equity fund. The evaluation of agricultural cooperatives using the conventional measures of financial performance like return on asset, return on equity, return on operating equity net margins on sales etc do no yield unequivocal results. Livestock marketing cooperatives societies in Marsabit County have continuously used these conventional measures giving mixed results but failing to indicate whether they create value for member producers. The objective of this study therefore sought to establish the effect of cash management practices on the performance of livestock marketing cooperative societies in Marsabit County. The key theories anchoring the study are; Keynesian theory of money, free cash flow theory and stakeholder theory. The current study adopted quantitative research design. The target population was twelve livestock marketing cooperative societies in Marsabit County that have been operational in the period 2019-2023. The unit of observation was the 110 employees in the finance departments. The study used stratified random sampling technique to arrive at a sample size of 86.. The study utilized both primary and secondary data where primary data was obtained from questionnaires that was presented to respondents and secondary data collection tool was used to obtain secondary data from audited financial reports accessible from society’s offices and ministry of cooperatives and micro-small and medium enterprises development. Diagnostic tests including multicollinearity test, normality test and reliability were conducted to confirm the model fitness. Data was analyzed using descriptive and regression analysis. The regression results showed that periodic cash plan (p=0.003, <0.05), investing of surplus cash (p=0.19, <0.05), managing cash flows (p=0.00, <0.05) had positive statistically significant effect on financial performance. Bank credit line had positive effect on financial performance even though the change was not significant. The study therefore recommends that managers of Marsabit county livestock marketing cooperative societies should enhance effective use and preparation of cash budgets and consistent investment of surplus cash. Further, there should be more decentralization of receipts and application of accounting packages. For policy, the study recommends that policy makers and regulators should concentrate on creating regulations that will allow marketing societies to thrive through provision of appropriate infrastructure for wider market.
Internal Audit Function and Financial Accountability of Laikipia County Government, Kenya: Application of Internal Audit Independence
(IOSR-JBM, 2024) Maina, Susan Mumbi; Musau, Salome
The public sector has experienced a growing demand for accountability and the need to optimize value within the constraints of limited resources. This research sought to assess the effect of internal audit function on financial accountability in the county government of Laikipia, Kenya. The specific objective of the study was to evaluate the effect of independence of the Internal Audit function on financial accountability of Laikipia County Government. The study targeted 105 employees working in the finance and economic planning department. Out of these, a sample of 51 employees were chosen and 48 questionnaires were duly filled and qualified for analysis. Data was gathered, sorted, coded, and entered on SPSS for analysis. Descriptive statistical analysis was applied to provide a summary of the data using mean as well as standard deviation metrics. Correlation and multiple regression analysis were employed to explore relationships and provide insights into the variables. The outcomes were presented using tables and charts. The questionnaire was found to be reliable, and the data was normally distributed and homogeneous, with no intercorrelation between the variables under study. The model adopted in the study was confirmed significant using ANOVA. Independence of the audit function was found to be a positive and significant predictor of financial accountability. The study recommended that policymakers should: enhance the independence of the audit function in Laikipia County Government by structurally separating the internal audit section from the Finance and Economic Planning department to strengthen its oversight capacity; implement measures to manage conflicts of interest, minimize management interference, and ensure adherence to auditing standards. To enhance effective financial accountability in the public sector, future research should examine factors influencing internal audit effectiveness.
Financial Technology and Profitability of Small and Medium Enterprises in Nairobi City County, Kenya
(Research Publish Journals, 2025-04) Ndia, Khadija Kawira; Omagwa, Job
Small and medium enterprises are essential to economic growth, wealth generation, and employment in every nation. The manner in which SMEs in Nairobi, Kenya access, manage, and use their finances have been transformed by financial technology. SMEs make up 98 percent of all enterprises, account for 30 percent of annual employment, and make up 3 percent of the country's GDP. However, approximately 400,000, SMEs fail within two years. This has necessitated a rethink of whether these SMEs make profit or not. This research explored the effect of financial technology on Nairobi County's small and medium in size businesses' profitability for the period of 5 years (2019-2023). The objectives of the investigation was to explore the effect of mobile money on the profitability of SMEs, the effect of online banking on the profitability of SMEs, and the effect of agency banking on the profitability of SMEs. The investigation was anchored on technology acceptance, relationship lending and resource dependency theory. Stratified sampling method was utilized in selecting 269 SME representation of the populace. The instrument that was employed to gather data is the questionnaire. Multiple regression analysis was employed and ethical considerations were duly observed. The study found that mobile money services had significant positive effect on profitability; agency banking uncovered an insignificant effect that is positive on profitability as online banking disclosed significant positive effect on the profitability of SMEs in Nairobi City County, Kenya. The government should establish a comprehensive framework that supports the integration and expansion of mobile money services within the SME sector
Financial Planning Practices and Donor Retention Rate of Education-Centered Non-profit Organizations in Nairobi City County, Kenya
(GLOBEEDU Group, 2025-01) Orinda, Victor Omondi; Kosgei, Margaret
This study examines the influence of financial planning practices on donor retention rates in education-based non-profit organizations (NPOs) in Nairobi City County. These organizations are vital in addressing educational disparities in underserved regions, but they have faced increasing donor retention challenges, particularly since 2019. This study relates the need to uncover financial planning practices' effect on the donor retention rate of education non-profits in Nairobi City County. It aimed to evaluate the correlation between budgeting practices and donor retention rates, determine how financial forecasting strategies affect donor retention rates, investigate the effect of cash flow management methods on donor retention rates, and examine the association between risk management approaches and donor retention rates. The study, grounded in stewardship, social exchange, and resource dependency theories, sampled 85 finance and fundraising officers from 109 targeted education-based NPOs. Data were collected through open— and closed-ended questionnaires. Three diagnostic tests were performed before the inferential analysis: the normality, multicollinearity, and heteroscedasticity tests. Descriptive and inferential techniques guided the analysis of data after collection with the help of Excel and SPSS software. The data was analyzed using the Pearson correlation. Multiple linear regression analysis was used as the decision rule for testing the study's hypothesis. The decision rule specified that the null hypothesis rejection or acceptance was established on the coefficient's signage. The findings reveal that all three financial planning practices significantly and positively affect donor retention. The study concludes that effective financial management practices are essential for donor retention and recommends implementing comprehensive financial frameworks. Further research is encouraged to explore these dynamics in other non-profit sectors.

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