MST-Department of Accounting and Finance
Permanent URI for this collection
Browse
Recent Submissions
Item Firm Characteristics, Interest Rate and Financial Performance of Microfinance Banks in Kenya(Kenyatta University, 2024-09) Ouma, Cavine OnyangoKenya has one of Sub-Saharan Africa's most active microfinance marketplaces. Microfinance gives the forte to improve the economic activity of low-income individuals and eliminate poverty, resulting in economic progress. However, microfinance's financial performance in the country has declined over time. With this view, this investigation aims to explore how firm characteristics (capital adequacy, assets quality, managerial efficiency, earning ability and liquidity) with interest rate as the moderating variable that affects the Kenyan performance of microfinance banks financially. The survey was grounded on stakeholders, liquidity preference, financial intermediation, buffer capital, efficiency structure and interest rate parity theories. The study research methodology rested on positivism research philosophy. Research Design was explanatory non-experimental design. Secondary panel data was utilized. 13 microfinance banks in Kenya were target. Information was gathered using secondary data sources from microfinance banks accounting report from 2016 to 2022. Data was descriptively and inferentially analyzed. Descriptive analysis was performed using tendency central measures like mode, mean, skewness, median, kurtosis, maximum and lowest values, and standard deviation. The investigation employed panel multiple regressions and Pearson’s Product Moment Correlation analysis. Diagnostics test such as multicollinearity, normality, autocorrelation, heteroscedasticity and stationary tests were carried out. All ethical considerations were appropriately observed. Findings uncovered that adequacy of capital exerts a notable and direct effect on financial performance, underscoring the importance for microfinance banks in Kenya to prioritize maintaining sufficient capital levels to support their overall stability and financial outcomes. Conversely, quality of asset demonstrates a significant and adverse influence on performance financially, highlighting the need for microfinance banks to enhance their credit assessment processes to ensure the quality of their loan portfolios. The research reveals that efficiency of management has an insignificant direct influence on performed banks financially. To address this, microfinance banks are advised to invest in comprehensive management training programs and capacity-building initiatives to improve operational effectiveness and decision-making processes. Earning ability, on the other hand, exhibits a considerable and direct influence on performance financially. Microfinance banks should thus focus on continuous innovation of their products and services to enhance their earning potential and overall financial outcomes. Liquidity levels exhibit an insignificant and inverse effect on the financial performance outcomes. To mitigate potential risks, microfinance banks should establish comprehensive policies and procedures to monitor and manage liquidity effectively. Interestingly, the study reveals that the connection concerning firm-level attributes and financial outcomes for microfinance institutions in Kenya does not appear to be subject to a substantial moderating influence from interest rate movements. Therefore, the survey recommends that microfinance banks concentrate on improving governance structures, operational efficiency, risk management practices, and asset quality. This can be achieved through capacity-building programs, training initiatives, and adopting best practices from successful microfinance institutions. Strengthening these firm characteristics will enable microfinance banks to enhance their financial performance, irrespective of interest rate fluctuations.Item Mortgage Financing and Profitability of Commercial Banks Listed at Nairobi Securities Exchange, Kenya(Kenyatta University, 2024-06) Mwale, Wilson OyeyeIn Kenya, commercial banks have experienced dwindling profitability in the recent past. The commercial banks’ growth rate in profitability recovered in 2021 following the continuing decline experienced in the recent years that closed in a negative growth rate in the year 2020. This necessitates the need to understand the factors leading to reduction in profitability in the banking sector. Empirical evidence shows mixed results on how mortgage financing affects commercial banks’ profitability. Evidence on mortgage financing and commercial banks’ profitability in Kenya is therefore unclear and inconclusive. Subsequently, this study wanted to determine the effect of mortgage finance on profitability of listed commercial banks in Kenya. The specific objectives were to assess the effect of mortgage NPL ratio, mortgage concentration, mortgage size and mortgage ratio on profitability of quoted commercial banks in Kenya. This study also investigated the effect of long-term debt as a moderating variable on the link between mortgage financing and profitability of listed commercial banks in Kenya. Hypotheses testing was at 0.05 level of significance. The study was anchored on the following theories: modern portfolio theory, mortgage value theory, title and lien theory, and financial intermediation theory. The target population of the study was all the 11 quoted commercial banks on NSE in Kenya and were operational in the period 2012-2021. Positivism research philosophy and explanatory research design were applied in the study. The time scope of the research was 10 years (year 2012 to year 2021). Secondary data was obtained from audited financial reports of commercial banks and CBK bank supervision annual reports. Preliminary diagnostic tests done included: stationarity, normality, multicollinearity and Hausman test. Data analysis done using STATA software included descriptive statistics, inferential statistics, correlation and panel regression analysis. The study adhered to ethical considerations by seeking authority from Kenyatta University Graduate School and NACOSTI. Panel regression results indicated that mortgage NPL ratio had an insignificant negative effect on profitability of commercial banks listed on NSE. In addition, mortgage concentration had a positive but insignificant effect on profitability of commercial banks listed on NSE. The study equally found mortgage size to have a significant negative effect on profitability of commercial banks listed on NSE. Also, mortgage ratio had a significant positive effect on profitability of commercial banks listed on NSE. Long-term debt had a significant moderation effect on the link between mortgage financing and profitability of commercial banks quoted at NSE. The study recommends that the CBK and all housing sector stakeholders should come up with policies and regulations that will develop the secondary mortgage market. Commercial bank managers should also enhance their mortgage credit risk management policies since non-performing mortgage loans affect profitability negatively. CBK and bank managers should come up with strategies that will increase mortgage loans borrowing thereby improve mortgage concentration hence growth in profitability of commercial banks. Since this research focused only on listed commercial banks, future research should be on the effect of mortgage financing on profitability of SACCOS and micro finance institutions.Item Financial Technology, Bank Size and Financial Performance of Commercial Banks in Kenya(Kenyatta University, 2024-05) Muttai, SusanPerformance of commercial bank is an essential component in the study of finance. A number of studies in the field of finance have been dedicated to the purpose of unraveling the enigma of why the performance of two companies that are operating in the same environment may be so drastically different from one another. Over the last decade, Kenya's commercial banks have increased their use of different types of financial technology (2011-2021). Mobile banking, agency banking, internet banking, and automated teller machines are just some of the various forms of financial technology available today. There are a number of fundamental issues that need to be researched before commercial banks can confidently integrate new types of financial technology into their business operations. There are a number of issues that customers have with mobile banking, including the price, security, speed, and expertise needed. The purpose of this study was to evaluate the effect that financial technology has had, if any, on the overall financial performance of commercial banks in Kenya. The specific goals were as follows: to establish the effect of mobile banking on financial performance; to determine the effect of internet banking on financial performance; to determine the effect of agency banking on financial performance; to determine the effect of ATMs on financial performance; and to establish the moderating role of bank size on the relationship between financial technology and the financial performance of commercial banks. The research was predicated on four different theoretical frameworks: the technological adoption model, the financial intermediation theory, the diffusion of innovation theory, and the profit maximization theory. The positivist research philosophy was used for this study, and a panel longitudinal research methodology was used for the research. The population of the study was 38 commercial banks as at December 2021. The study was a census. Secondary information was gathered on an annual basis, and it covered a span of ten years (January 2012 to December 2021). The data was evaluated making use of descriptive statistics as well as inferential statistics entailing correlation and panel multiple linear regression analysis. The current research conclusions revealed that financial technology fairly explains financial performance and the current research discoveries also revealed that the financial technology is sufficient in predicting financial performance. Additional study findings were that mobile banking, internet banking, agency banking, adoption of ATMs, and bank size had positive significant correlations with financial performance. Moreover, findings were that adoption of ATMs and mobile banking had a significant positive link with financial performance. Meanwhile, agency banking and internet banking had a positive insignificant relationship with financial performance. Finally, bank size was found to have a significant moderating effect on agency banking, mobile banking and ATM banking. For practice, banks should invest in expanding and optimizing financial technology to enhance customer convenience and operational efficiency. Ensuring financial technology reliability and accessibility can improve customer satisfaction. For policy, regulators should promote financial technology infrastructure development and interoperability to facilitate widespread access to banking services.Item Financial Risk Management and Performance of Investment Firms Listed at Nairobi Securities Exchange, Kenya(Kenyatta University, 2024-04) Mwalolo, Sylvia ChiruInvestment firms play a pivotal role in the economic landscape of Kenya, contributing significantly to GDP and employment levels. The financial performance of these firms is of utmost importance, providing a comprehensive view of their overall stability and communicating their financial well-being to investors. However, recent trends suggest a concerning decline in the financial performance of these firms, necessitating a closer examination of their financial risk management practices. This study investigates the effect of financial risk management strategies, focusing on interest rate risk, exchange rate risk, inflation rate risk, and liquidity risk, on the financial performance of listed investment firms in Kenya. Additionally, it explores the moderating effect of firm size on this relationship. The study hypotheses were evaluated at the 0.05 level of significance. Expectations Theory of Exchange Rates, Arbitrage Pricing Theory, Agency Theory, Liquidity Preference Theory, and Modern Portfolio Theory were the theories underpinning the study. Using a positivist research philosophy and explanatory research design, data spanning from 2014 to 2021 were collected from five selected investment firms, with 40 respondents purposively sampled. Techniques including descriptive statistics and multiple regression analysis were employed to analyse the data. To ensure that the data is suitable for multiple regression analysis, diagnostic tests (multicollinearity, normality, and heteroscedasticity) were performed. The data was visually represented through the use of tables, charts and graphs. The study took into account all the necessary ethical considerations. The findings reveal significant positive effects of interest rate risk management (p = 0.025), exchange rate risk management (p = 0.017), inflation rate risk management (p = 0.020), and liquidity risk management (p = 0.007) on financial performance. Moreover, firm size significantly moderates this relationship (p = 0.002). The study underscores the critical need for effective financial risk management strategies within investment firms. Recommendations include implementing currency invoicing and exposure netting to manage exchange rate risk, utilizing financial instruments such as forward rate agreements to mitigate interest rate risk, optimizing net working capital for liquidity risk management, and adopting portfolio adjustment techniques for inflation rate risk management. The study suggests that policymakers in Kenya should take an active role in encouraging investment firms to provide comprehensive risk disclosures in their financial reports. Furthermore, future research could delve into individual variables' effects on investment firms' financial performance, expanding beyond listed entities to encompass the broader Kenyan context.Item Financial Banking Risks, Bank Size and Financial Performance of Fully Fledged Islamic Banks in Kenya(Kenyatta University, 2024-05) Shukri, Abshir IbrahimIslamic banks must carefully analyze the loans granted in order for them to get back the loans as per the agreements. The aim of this study was to assess how Islamic banking financial risks affect financial performance of fully fledged Islamic banks in Kenya. The key focus of the inquiry was on credit risk, liquidity risk, transactional risk and operational risk as well as bank size and financial performance. The agency theory, the profit-and-loss sharing theory, shift ability theory and the modern portfolio theory guided the inquiry. Descriptive research design was embraced targeting 3 commercial banks offering Islamic products in Kenya and census was used. Secondary cross sectional quarterly data on total liquid assets, total deposits, loan loss provisions, total loans, exchange rates fluctuation, total employee expenses, number of employees and net income was collected for the period 2017 all through to 2021. Three regression models were used to estimate the link between Islamic banking risk, bank size and financial performance. Prior to inferential analysis, diagnostic tests covering Heteroscedasticity test, normality and autocorrelation. Statistical Packages for Social Sciences guided processing of views. The findings were that credit risk, liquidity risk, transaction risk and operational risk significantly affected financial performance of Islamic banks in Kenya. It was wrapped up that Islamic financial banking risks significantly affect financial performance of Islamic banks in Kenya. It was recommend that the credit managers of the Islamic banks in Kenya should review the existing credit risk management framework and mechanisms to manage the increasing trend in NPLs. Islamic financial banks need to ensure they are adequately capitalized to maintain an optimal liquidity position that can allow them to effectively realize their financial intermediation role in the economy. The policy makers at CBK should effectively leverage on existing monetary policy instrumental to control volatility in exchange rate which in turn increase exposure of Islamic bank to transactional risk. The operations managers of the Islamic banks in Kenya review the existing infrastructures regularly and recommend continuous repair and maintenance to avoid possible non-performance of internal processes and the system. The product development managers and the marketing managers of the Islamic banks in Kenya should grow the size of their institutions by researching and recommending viable markets for expansion of the operations to grow the asset base.Item Financial Structure on Liquidity of Manufacturing Firms Listed in Nairobi Securities Exchange, Kenya(Kenyatta University, 2023-05) Ngue, E. MinooLiquidity of a manufacturing firm means a lot for it providesi ai cushioni thati wouldi enablei thei companyi toi survivei ai periodi ofi lowi earningsi duringi whichi thei companyi mighti bei unablei toi accessi capitali markets. Studies, both theoretical and empirical, demonstrate that a firm's financial structure affects the firm's liquidity. However, as a corporation`s liquidity desires are mainly impacted through the character of its operations, a corporation`s liquidity call for will range relying on its unique circumstances. Specifically, the look at was looking to; discover the impact of brief time period debt, long time debt capital and equity capital on liquidity of manufucturing corporations indexed in Nairobi Security Exchange, Kenya.The usage of corporation size forms the moderating factor/ variable. The look at can be pegged on 5 major theories which encompass the Working Capital theory, Modigliani-Miller theorem, the Pecking Order Theory, the Bird in Hand Theory, and the Theory of Optimal Firm Size. The positivist philosophy was used in the current investigation. Explanatory research design was used in the investigation. Nine Firms listed under the Manufacturing and allied sector of the Nairobi Securities Excjange were used as the study population There was no sample frame used in the investigation. Census was utilized because the target population Was below the central limit theorem threshold of normal population. Using a data extraction tool, information on accruals, leases, debentures, preference shares, retained earnings, reserves, cash balances, bank balances, and account payables was gathered. The researcher took care at some stage in records amassing and evaluation to make certain that the cloth given withinside the thesis represents the real records received from the monetary statements of the diverse manufacturing establishments and NSE reports. Diagnostic test for the best linear unbiased estimator was conducted through Multicollinearity test, heteroscedasticity test, normality test and stationarity test was done to reduce data ‘noise’. Data was analyzed by the use of inferential statistics which included bivariate analysis using Pearson correlation and multivariate analysis using static panel regression. Robust Static Panel selection was done using Hausman test, in addition to descriptive statistics, inclusive of mean, mode, general deviation. Finally, the data analysis output were presented by the use of tables as was deemed appropriate. The study concluded that financial structure affects liquidity of listed manufacturing firms in Kenya. Short-term debt is the main factor of financial structure that affects the liquidity of listed manufacturing firms in Kenya. The study further concludes that short-term debt significantly affects liquidity of listed manufacturing firms in Kenya. From the regression analysis, short-term debt showed a strong significant negative effect on cash ratio of the listed manufacturing firms in Kenya. The study concludes that long-term debt has a positive effect on liquidity of listed manufacturing firms in Kenya. Thus, increased long-term debt increases the liquidity of listed manufacturing firms in Kenya. The study concludes that Equity have a significant effect on liquidity of listed manufacturing firms in Kenya. The study threfore concludes that firm size has a significant effect on liquidity of listed manufacturing firms in Kenya. In accordance to the findings in the regression analysis, the study concludes that firm size has a positive effect on the liquidity of listed manufacturing firms in NSE, Kenya. Thus, increased assets base improves the liquidity of manufacturing firms listed in Kenya.Item Systematic Risk and Financial Performance of Commercial Banks Listed at the Nairobi Securities Exchange, Kenya(Kenyatta University, 2024-06) Okello, Serfine AdhiamboThe systematic risks and financial performance subject on commercial banks have been widely discussed by many scholars with minimal theoretical, contextual and methodological solutions thereof. The general objective of this study was to establish the influence of systematic risk on the productivity aspect of the commercial banks in terms of financial performance which are listed at the NSE in Kenya. Specific objectives were; to determine the influence of inflation on financial performance of commercial banks listed at the Nairobi securities exchange, Kenya, to examine the influence of interbank interest on financial performance of commercial banks listed at the Nairobi securities exchange, Kenya and to evaluate the influence of foreign exchange on the financial performance of the commercial banks listed at the Nairobi securities exchange, Kenya. The study was anchored on International Fisher Effect theory, Loanable Funds theory and purchasing power parity theory. The study utilized descriptive research design. The target population comprised of twelve (12) listed commercial banks in NSE, Kenya whereby census approach was used therein with only 11 firms qualifying for the data collection exercise. The study utilized descriptive as well as panel regression for analysis purposes. Ethical issues will be given pre-eminence where a permit from Kenyatta University graduate school will be sought and NACOSTI in that order. The research outcome portrayed that commercial bank which are listed at the Nairobi securities exchange, Kenya has their financial performance being influenced by inflation and it took an inverse and statistically insignificant direction. Again, commercial bank which are listed at the Nairobi securities exchange, Kenya have their financial performance being influenced in a statistically significant way by interbank interest and in a positive manner and lastly, foreign exchange negatively influenced the productivity aspect of the commercial banks which are listed at the NSE, Kenya as far as financial performance is concerned and it was statistically significant. To the top management of commercial banks, the theoretical viewpoint of inflation, interbank interest and foreign exchange and financial performance is a eye opener for the inverse link of inflation will guide them to establish policies which foster the purchasing power of the end users of their products, namely their customers. The top management of Nairobi securities exchange have an empirical frontier set for them in making financial sustainability policies specifically targeting the commercial banks for those financial institutions are uniquely affected by foreign exchange and interbank interest in addition to the normal interest rates. This will help the NSE team to mitigate cases of delisted banks. The academicians are beneficiaries of the study outcome for the methodological gap on how to measure the inflation, interbank interest, foreign exchange and financial performance of commercial banks has been placed in a new debatable frontier.Item Investment Decisions and Financial Performance of Matatu Saccos with Offices in Nairobi City County, Kenya.(Kenyatta University, 2024-06) Mutua, Joram KasyokiMatatu SACCOs in Kenya play a pivotal role from both locally and nationwide perspective. Even though it is widely known that matatu SACCOs have manifold benefits to the country, past studies portray controversial debate over linkage between financial outlay decisions and returns realized over the years. Purposely, this paper endeavored to test NTSA regulations moderation effect of on the relationship between investment decisions and financial productivity in terms of performance of matatu SACCOs in Nairobi City County, Kenya. The specific objectives were, to determine the influence of replacement decision by matatu owners on financial performance of matatu SACCOs with offices in Nairobi CBD, Kenya, to examine the influence of modernization decision by matatu owners on financial performance of matatu SACCOs with offices in Nairobi CBD, Kenya, to evaluate the influence of diversification decision by matatu owners on financial performance of matatu co-operatives with offices in Nairobi CBD, Kenya and to assess the NTSA regulations moderation implications on the linkage of investment decisions and of matatu SACCO financial performance with offices in Nairobi CBD, Kenya. The research project is anchored on modern financial theory, risk and uncertainty-bearing theory of profit and opportunity cost’ theory. This research applied descriptive survey research design. The four hypotheses were tested at 95% confidence level using multiple both multiple and Hierarchical regressions models. The target population is 625 matatu SACCOs registered under the national transport and safety authority out of which with use of stratified sampling method selection of a sample size of 206 was obtained. Then again, with use of a structured questionnaire, data needed was collected via the drop and pick methodology was applied. Research findings portrayed that replacement investment decision influenced financial performance of Matatu SACCOs which was direct and significant. Again, modernization investment decision influenced financial performance of Matatu SACCOs which was negative and statistically significant, diversification investment decision caused a significant financial performance of Matatu SACCOs which was direct and lastly NTSA regulations portrayed a statistically significant moderation effect on investment decisions to matatu SACCO financial performance conceptual connection. The results portray that government is able to establish policies which can guide on transport sector operations which promote matatu SACCO financial performance and by extension raise its tax base. The top management of the matatu SACCOs have an in-depth conceptual linkage between investment decisions they make and the financial performance implication which help them improve their financial sustainability through increased profitability. The academicians have a base of further debate on aspects of investment decisions which can significantly influence financial performance of matatu SACCOs.Item Internal Control System and Loan Performance of Deposit Taking Saccos in Nairobi City County, Kenya(Kenyatta University, 2024-04) Njane, Julius KigothoThe so-called DT-SACCOs has proven to directly donate to social-economic threats arising from poverty, augmented job chances and economic upscaling. Even with such an amazing provision, they still have trials on their future survival due to loan default rates over the years. The main objective of this study was to establish the influence of internal control system on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya. Specifically, the study evaluated the influence of control activities on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya; examined the influence of control environment on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya, established the influence of information communication on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya and assessed the influence of monitoring on loan performance of deposit taking savings and cooperative societies in Nairobi City County, Kenya. Systems theory, agency theory, information asymmetry theory and credit risk theory are the key suppositions which were utilized in this study. The study utilized causal research design for the purposes of developing the research problem. A total of 42 DT-SACCOs representing the study population located in Nairobi City County. To collect the needed data, survey approach was utilized for the population was small. Structured questionnaire was the main tool which was utilized for collecting primary data from top officials of the DT-SACCOs. To collect the secondary data, a data collection schedule was utilized. The research findings were reported using chart and tables. Ethical issues were addressed as supposedly through the respective permissions. Before testing of hypotheses, diagnostic test was performed which entailed normality test, multicollinearity test and heteroscedasticity test Research findings portrayed that the four COSO affiliated ICS predictor variables, namely; control activities, control environment, ICT and monitoring activities had a direct and statistically significant influence on loan performance of DT-SACCOs in Nairobi City County, Kenya. Top management will benefit from the research findings for the consideration of the contextual aspects of ICS which are relevant and suitable to DT-SACCOs aid in development of information decision system which is well-informed for future planning on the ways in which loan default rate may be mitigated. The government policy makers such as SASRA will take advantage of the outcome of this investigation for the conceptual viewpoint addressed herein pinpoints areas of loan lending policy making to create user-friendly financing environment for the borrowers and lenders. The academicians have a reliable empirical anchorage for the linkage between ICS and loan performance the contextual viewpoint provide an avenue to advance on this topical issue in the future.Item Enterprise Risk Management (ERM) Practices on the Financial Performance of Non-Deposit Taking Savings and Credit Co Operative Societies within Nairobi City County, Kenya(Kenyatta University, 2024-03) Kisero, Jacob O. KaweneThe overall performance of NDTs in operating within Nairobi and the entire country, Kenya has shown a significant decline and turbulence. The SACCOs have faced losses resulting from increase credit risk, embezzlement and misappropriation of funds, cybercrime, and weak governance practices. For instance, CBK, (2018) reported that the Kenya financial sector lost up to Kshs. 29.5 billion while singling out misappropriation of members’ deposits, accumulating risky assets and flouting prudential guidelines. Since 2011, the interest spread has been rather erratic. Operational risk has always existed for the NDTs due to the rise in the ratio of operating expenses to total assets. This study sought to determine how risk management strategies affected the NDTs in Nairobi in terms of their financial performance. Specifically, the study evaluated the effect of Internal Control Systems, Top Management Commitment to ERM, Risk Assessment and Internal Audit on financial performance of NDTs within Nairobi. The purpose of this study is to close the knowledge and information gap about the impact of ERM practices on the performance of NDTs in Nairobi, Kenya. The study population was 964 branch managers of the NDTs within Nairobi. Two hundred and seventy-four (274) questionnaires were administered to respondents of the sampled 274 non deposit taking SACCOs using purposive sampling. Analysis of the data obtained will be done using SPSS and multiple regression analysis. The study concluded that the highlighted ERM practices including internal control systems, risk assessment process, internal audit and top management commitment to ERM play a critical role in enhancing financial performance of the NDTs with a recommendation of replication of this study for validation purposes. Secondly a similar study with a larger number of SACCOs be sampled to provide an enhanced reflection of the situation on the ground, a similar study using sample of commercial banks to also be undertaken and the same study be conducted but with different indicators for ERM practice help improve knowledge of ERM practices on financial performance in general.Item Tax Education and Tax Compliance of Manufacturing Small And Medium Enterprises in Nairobi City County, Kenya(Kenyatta University, 2024-06) Gichohi, Peter King’oriTo enlighten taxpayers regarding their tax information, the Kenyan tax authorities have made tax education a top concern. In order to promote voluntary tax compliance and boost national revenue, this kind of education is essential. Low tax compliance among SMEs limits revenue generation from government and, consequently, inefficient government expenditure since it makes it harder for the state to amass family earnings, which are vital assets for speculating. Because they produce taxable income for a nation, SMEs are important for the advancement of the financial sector. SMEs are considered to be the "difficult to evaluate aggregates from the informal sector" and are less in compliance with taxes than large enterprises. However, the goal of this study is to investigate how tax education affects the compliance with tax laws of manufacturing SMEs in Nairobi City County, Kenya. It specifically seeks to assess the effects of stakeholders' awareness programs, electronic taxpayer education, and print media taxpayer education on the tax compliance of manufacturing SMEs in Nairobi City County, Kenya. Stakeholders, tax planning, and planned behavior theories served as the study's foundations. 641 manufacturing SMEs in Nairobi was the study's targeted audience, which used descriptive research approach. Using stratified sampling technique, the study selected 100 businesses from different sectors of manufacturing SMEs. Prior to estimating the data, diagnostic tests were performed. The variables were examined through descriptive and inferential analysis. The mean, frequency and pie chart of descriptive statistics were carried out. To evaluate the study, correlational analysis was employed. There was proper adherence to all research ethics. Output showed that stakeholder awareness programmes inversely and insignificantly affected manufacturing SMEs tax compliance; electronic taxpayer education positively affected tax compliance in a significant manner as it relates to manufacturing SMEs; and print media taxpayer education significantly affected tax compliance of manufacturing SMEs in Nairobi City County but however positively. The research advice that the stakeholder awareness programmes should be reduce as other individuals who pay tax may not be included in the awareness programmes thus leaving out a large number of individuals who are tax compliant in Nairobi City County, Kenya. This would provide avenue for a large tax base and hence increasing the level of tax compliance amongst the stakeholders.Item Board Structure and Financial Performance of Commercial and Service Firms Listed at the Nairobi Securities Exchange, Kenya(Kenyatta University, 2024-05) Oboo, Ezra OchiengBoard structure has specific country based features that enables the efficient and effective handling of firms financial performance. In Kenya, the all-round board structure importance in enhancing the commercial and service industry performance cannot be overstated as this potentially affects the profitability of these firms and the industry at large. However, the ineffectiveness and poor management of firms by the board over the years has led to the decline in the commercial and service firms’ financial performance. With regard to this background, this inquiry attempt to close existing gaps in literature by investigating the manner in which board structure affects commercial listed and service listed firms’ financial performance at the Nairobi Securities and Exchange Kenya. With the interest variables to be board size, independence, tenure and age affecting the traded firms’ performance financially on Nairobi Securities and Exchange commercial and service firms in Kenya. An ex-post research design was utilized in this investigation. Relying on the presupposition in which the study employed, stewardship, agency and resources dependence theories were adopted to explain their relevance to the work. Eleven (11) listed commercial and service firms was used to determine how such board structure variables determine the listed firms financial performance between 2015 and 2022. Secondary. Secondary data obtained from the financial statement of the companies listed at the Nairobi Securities Exchange between 2015 and 2022 was used. The outputs of the research were offered utilizing tables and graphs within the scope of descriptive, correlation, and regression technique of analysis. The information was subjected to multicollinearity, autocorrelation, heteroskedasticity, stationarity, and Hausman tests to authenticate the outcomes of the regression. Notably from the output, board size was noted to be insignificantly affected inversely Kenyan listed commercial and service firms financial performance; board independence was considered by the output to be positive on the financial performance noting significance; board tenure was also revealed to have positive and yet insignificant on financial performance; while board age was negatively in a manner that is insignificantly affected performance financially. This study recommends that the country need to strengthen policies to improve firm-level corporate governance in order to bolster financial performance and attract such investors. The regulatory authorities in Kenya need to strengthen the independence of board of directors by making it mandatory upon firms to ensure that boards of directors have sizeable representation of outside directors, as is the practice in other countries, and since the evidence from this study suggest the need for this.Item Credit Risk Management Process and Financial Performance of Commercial Banks in Kenya: A Case Study of Selected Commercial Banks in Kisii County(Kenyatta University, 2024-05) Nyandemo, Nyambane CliffThe success of a lending firm is mainly determined by the financial performance in place, governance, professionalism and procedures. Especially to lenders, the minimizatio of bad loans is benefitial to the entire parties in the loan process. Commercial banks adopt different credit risk management process on financial performance majorly determined by credit scoring systems, banks’ ownership of credit policies, caliber of management and banks regulatory environment. Based on the report of the Central Bank of Kenya, there has been a declining performance Kenya’s banks between 2012 and 2016. The declining perfomance has been attributed to credit risk managemnet ineffectiveness in Kenya. Prescriptive initiatives have been placed in position, like guaranteeing that bad loans financing are adequately prepared for, and the least restrictions laid for capital requirements and liquidity appropriateness are adhered to, and yet profit growth has remained low. The research inquired towards ascertaining effects of risk management processes upon Kisii County commercialized banking establishments branches financial performance. Specifically, research intended towards instituting the effects of credit risk identification, risk, risk monitoring, risk evaluation and risk mitigation measures on financial performance. The investigation was centered on equity theory, assimilation theory, contrast theory and portfolio theory. Kisii Town was the area which the study was conducted. With 111 as the population of the employees as the target from 11 commercial banks, 91 sampled workers was utilized. Descriptive survey layout was employed. Findings shows that Risk Identification, Risk Analysis, Risk Evaluation, Risk Monitoring and Risk Mitigation have positive and significant effect on financial performance. The study concludes that the organizations can proactively develop strategies to mitigate them, thereby minimizing the negative impact on their financial performance by identifying potential risks. Risk analysis can help companies make more informed decisions when it comes to investments, budgeting, and resource allocation. The organizations can proactively identify and mitigate any threats that may impact their financial stability by closely monitoring and assessing potential risks. The banks can proactively mitigate these risks and make informed decisions to protect their financial health by identifying and evaluating potential risks that could impact the company's bottom line by identifying and evaluating potential risks that could impact the company's bottom line. The banks can protect their assets, reduce losses, and increase profitability by identifying potential risks and implementing strategies to minimize or eliminate them. The study recommends that the banks should implement advanced data analytics and machine learning techniques. The commercial banks should integrate macroeconomic factors by enhancing risk assessment methods involves considering macroeconomic factors that can impact a bank's financial performance. The commercial banks can adopt advanced risk assessment techniques, such as stress testing and scenario analysis, to evaluate the potential impact of various risk factors on their financial performance. Commercial banks can enhance their risk management strategies by implementing a comprehensive framework that includes identifying, assessing, monitoring, and mitigating risks.Item Prudential Regulatory Framework and Financial Performance of Micro Finance Institutions in Kenya(Kenyatta University, 2024-06) Nuriye, Abdi AliMicrofinance institutions must abide by strict capital, legislative, operational, and financial reporting requirements, per the regulatory framework. Rising non-performing loans and insufficient cash have been ongoing issues despite prudential regulations being in place to enable the Central Bank of Kenya supervise Microfinance institutions. Therefore, the objective of this investigation was to ascertain how the prudential regulatory environment affected Kenya's microfinance organizations financial performance. The study's specific goal was to investigate how credit risk, liquidity requirements, capital requirements, and microfinance size affect financial performance. Liability management theory, the buffer theory of capital adequacy, agency theory, and the shiftability theory of liquidity served as the study's pillars. In this study, causal research design was adopted. As of December 31, 2019, the 13 microfinance institutions in Kenya that were officially listed on the website of the Central Bank of Kenya constituted the population of this study. Document reviews of information found in publicly available financial statements and annual reports for the preceding five years, from 2016 to 2020, were employed as secondary data for the study. Return on Assets was used to gauge the financial success of Micro Institutions. Tables displayed the results of a quantitative analysis of the data using descriptive statistics such as mean and standard deviation. Inferential statistics were also used in the study, including diagnostic tests like the multicollinearity test, normalcy test, and heteroscedasticity test. The findings of the investigation indicated that, while the size of Kenyan microfinance institutions had no statistically significant effect on their performance, the capital adequacy and liquidity requirement had a significant effect. Furthermore, Microfinance institutions in Kenya were not found to have a statistically significant relationship with credit risk and profitability. The study came to the conclusion that microfinance institutions need for liquidity decides whether it can meet its short-term loan obligations and whether it can use its current or liquid assets to pay its current liabilities. Cash rules make ensuring that investments that raise the risk of default do not dominate microfinance companies and that they have sufficient cash on hand to honor withdrawals and pay operating losses. Since lowering overhead has a direct influence on profitability, the study advised that the micro financial institutions examine their overhead costs and look for possibilities to do so. The microfinance organizations should raise their capital requirements by increasing profits, selling long-term assets for cash, acquiring funds through the issuance of preferred or common stock in return for cash; obtaining long-term financing, and doing all of the above. Lending should be done by microfinance organizations to a variety of clients, including consumers, small enterprises, and big businesses.Item Integrated Financial Management Information System and Financial Performance of Mombasa County Government, Kenya(Kenyatta University, 2024-06) Mutinda, Tabitha MusangiAn integrated financial management information system enhances transparency, accuracy, and efficiency in financial operations by consolidating financial data and processes into a single unified platform, improving decision-making and accountability. The performance of Mombasa County government has been declining for the last five years (2017 to 2021). The revenue collected by the County government of Mombasa decreased by 5.17% between the year 2017 and the year 2018, which later decreased by 7.86% in 2019 and 12.78% in 2020. The pending bills increased by 49.54% between 2019 and 2020. In addition, unsupported expenditure increased 2.57% between 2019 and 2020. The research examined the influence0of0integrated0financial0management0information system of Government of Mombasa County performance in Kenya. The specific objectives were to determine the impact of budget plan, process of procure to pay, financial reporting and Information communication technologies to support Mombasa County Government performance in Kenya. The study0was0based on public finance theory, new public management theory and the theory task-technology fit. An explanatory design was employed by the study. The study targeted various departments in the County Government of Mombasa County. The respondents were 293 workers working in the 11 departments in Mombasa County Government. Stratified0random0sampling was employed to choose 169 staff from the population targeted. The research used data information from both secondary0and0primary0sources. Secondary data on revenue collection, pending bills and unsupported expenditure was collected from the County government of Mombasa. Primary data was obtained by use of a close-ended questionnaire. Inferential statistics and descriptive statistics were used in the analysis of data with the help of statistical0software referred as Statistical0Package for Social0Sciences (SPSS Version 25) for the analysis. Descriptive0statistics included percentages, frequencies, standard0deviation and0mean. Inferential statistics included both correlation and regression0analysis. The results0were presented in0figures0and tables. The study found that procure-to-pay process in integrated financial management information system had a positive0and significant0influence0on performance of Mombasa County Government. In addition, plan-to-budget in integrated financial management information system had a0positive and0significant influence on performance of Mombasa County Government. Also, the study found that financial0reporting using integrated financial management information system had a positive0and significant influence on performance of Mombasa0County Government. Further, the study found that ICT support using integrated0financial management information system has a positive and significant influence on performance of Mombasa County Government. The study recommends that Mombasa County Government should implement procure to pay software, improve supplier engagement, optimize inventory and keep the process transparent to improve financial performance of Mombasa County Government. In addition, Mombasa County Government should implement rolling forecast and budgets, use budgeting software, organize and centralize documentations and plan early for the entire process to improve financial performance of Mombasa County Government.Item Tax Morale and Compliance among Small and Medium Enterprises in Nairobi City County Kenya(Kenyatta University, 2024-04) Kiman, Samuel KarimiThe purpose of this project was to study the factors affecting tax morale and compliance behaviour, among small and medium enterprises in Nairobi City County, Kenya. The study objectives included investigating the impact of automation of tax filing process on tax compliance, examining how taxpayers’ perceptions on tax laws affects tax compliance, and establishing the effect of tax penalties on tax compliance among small and medium enterprises in Nairobi City County. The objectives sought to provide a guide towards examining high cases of tax non-compliance among small and medium enterprises despite the eligibility to pay taxes. The researcher used models of taxpayers’ behavior, including economic deterrence, fiscal exchange, and the comparative treatment theory that explains the inclination of decision to comply with taxes remittance. The researcher employed the survey research design. Primary data through structured questionnaire was obtained from the selected small and medium enterprises offices where interviews were conducted on different representatives of the enterprises. The data was regressed using Statistical Package for the Social Sciences version 26. The findings were used to show the relationship between tax morale factors and the accrued effects on tax compliance among small and medium enterprises. The scope of the study included a target population of 114 employees and a sample of 89 respondents from 3 small and medium enterprises. The researcher also paid attention to all ethical guidelines to ensure integrity during the research study including seeking informed consent for interviews, providing authentic data, maintaining anonymity, and using the data for academic use only. The research results demonstrate a notable correlation between the automation of tax procedures and adherence to tax regulations. Additionally, there is a substantial connection between individuals' perceptions of tax policies and laws and their compliance with tax regulations. Moreover, a notable association is present between the implementation of tax penalties and adherence to tax obligations. Therefore, the study concludes that automation of the tax filing process can be used to simplify tax administration, reduce related tax reporting costs, improve the relationship between Kenya Revenue Authority and the SMEs, help in filing the returns online irrespective of geographical location, and overall increase tax compliance. The research also determines that tax policies and laws influenced by patriotism play a role in shaping the outcome, perception of the fair and equitable implementation of tax laws, perceived social pressure on payment of taxes, governments method of tax law enforcement, and continuous civic education and sensitization campaigns on the role of tax laws and taxes by Kenya Revenue Authority increases tax compliance. The research ultimately suggests that consistent enforcement of tax penalties and the possibility of offering alternatives and equitable penalties influence taxpayers' behavior and enhance adherence to tax regulations. Taxpayers' knowledge of tax penalties and application methods and the likelihood of providing alternatives and fair tax fines control taxpayers' attitudes and increase tax compliance. The study makes the following recommendations; Kenya Revenue Authority automate the tax filing process to simplify tax administration, reduce related tax reporting costs, ensure accessibility of the service to all, and strengthen the systems to minimize delays and lengthy processes. Tax policies and laws should be subjective to patriotism, implementation and enforcement of tax laws should be fair and equitable, and Kenya Revenue Authority should continuously provide civic education and sensitization campaigns on the role of tax laws. The study also recommends curbing corruption and impunity against set tax laws to improve tax compliance levels of small and medium enterprises. The study recommends that Kenya Revenue Authority ensure regular application of tax penalties and provide taxpayers with alternatives and fair tax penalties to control taxpayers' attitudes and increase tax compliance. It also recommends that Kenya Revenue Authority sensitize taxpayers on tax penalties and application methods.Item Microfinance Services and Financial Performance of Micro, Small and Medium Enterprises, in Laikipia County, Kenya(Kenyatta University, 2024-06) Kendi FridahIn Laikipia County, Kenya, this study aims to assess the business results of micro, medium, and medium-sized businesses, and the microfinance services available to them. This study was informed by four specific objectives, namely, establish the influence of micro savings on the financial performance of MSMEs in Laikipia County, assess the role of micro insurance on the financial performance of MSMEs in Laikipia County, assess the contribution of micro credit on financial performance of the MSMEs in Laikipia County and to determine the role of training services on financial performance of MSMEs in Laikipia County. This study was informed by, Agency Theory, Finance Growth Nexus Theory, Financial Intermediation Theory and Theory of Financial Sustainability. Descriptive research design informed this study. The study targeted 600 registered licensed enterprises which offer various MSMEs services. This study adopted proportionate stratified random sampling technique through picking of various categories and classes from the targeted MSMEs. The sample size of the study was 120 respondents. This study used primary techniques of data collection. Primary data was collected through issuing out of questionnaires. Inferential and descriptive statistics was used in analyzing the collected data. Both descriptive and inferential analysis in the form of Tables and interactive figures. Model R- Square, ANOVA Statistics and regression coefficients were generated and interpreted for the bivariate model as well as Multiple Linear Regression Model. The results indicates that the products of MFI (micro savings, micro credit, and training) bear a significant strong correlation on the MSMEs financial performance while there was relatively weak correlation between micro insurance and MSMEs financial performance. The regression analysis shows that; micro savings, micro insurance and micro credit had a significant impact on the MSMEs financial performance while training had no significant implication on MSMEs financial performance. The study recommended that the MFI had a significant responsibility of making sure that there is prudent use of credit which is a paramount facility in business financial performance to acquire this, credits need to be MSMEs-oriented and not product-oriented. Extensive and proper activities monitoring need to be provided to the MSMEs who benefits from the micro credit product. MFIs need to research into relatively profitable business lines and provided credit to MSMEs who have the capacity in exploiting such lines of business, micro insurance is considered to be pivotal to safeguarding them in the case of unfavorable happenings, and need to be properly enhanced to the MSMEs and that financial training and business should be offered by the MFIs on a regular basis and majority of the cases need to be tailored towards the MSMEs training needs. Although this study has primarily relied on quantitative methods to ascertain how MFI products affect MSMEs' financial performance, customized individual responses may provide insightful data and provide a clearer picture of how MFI services affect MSMEs' financial performanceItem Financial Literacy and Investment Decisions Among Middle and Long-Distance Elite Athletes in Kenya(Kenyatta University, 2024-05) Nyang’au,Fednard MachokaKenya is known internationally for producing middle- and long-distance champions in athletics. This has been attributed to its dominance in middle- and long-distance races which have exhibited comparable dominance in these races. Most of these athletes are young with no complete formal education. The issue around financial literacy and its relevance to sports remains unresolved. The objective of this study was to examine the impact of financial literacy on the investment decision-making process among middle and long-distance elite athletes in Kenya. The primary aims of this study were as follows: first, to examine the impact of financial knowledge; second, to assess the influence of saving habits; and third, to evaluate the effect of awareness of investment opportunities on investment decision-making among middle- and long-distance elite athletes in Kenya. The study was supported by four theories: goal setting theory, financial literacy theory, absolute income theory, and permanent income hypothesis. The research design employed in this study was descriptive in nature. A total of 1,695 athletes specializing in middle- and long-distance events, and based in Kenya, were included in the study. From this population, a sample size of 318 athletes was selected, the researcher took into account both stratified and purposive sampling methodologies in order to identify the specific participants. Data collection was conducted using structured questionnaire. The study included correlation analysis and a multivariate regression model to assess the hypotheses. The research results were presented through the utilization of graphical representations and tabular formats. The researcher demonstrated adherence to research ethics by obtaining a permit letter and a NACOSTI license in order to conduct the research. The findings revealed that the participants exhibited a lack of knowledge of the functioning of the Nairobi Securities Exchange (NSE). Moreover, it was observed that athletes engaged in moderate buying and selling activities of ordinary shares, preference shares, and bonds for various firms inside the NSE. The findings of the study revealed that a significant proportion of the participants expressed a tendency to infrequently allocate a portion of their profits following each successful race for the purpose of saving. The findings of the survey revealed that a significant proportion of the participants expressed a modest level of awareness regarding various investment prospects both domestically and internationally. The findings of the study suggest that the allocation of investments in real estate, business, and financial assets in the region was only partially and inadequately executed. The findings of the research indicated that the level of literacy among the participants was significantly low. The team had a limited understanding of fundamental concepts in financial literacy, including the overall inflationary trend in the economy, the concept of time worth of money, and the potential misperception of cash holdings. It is imperative that athletes obtain the necessary knowledge that will serve as the fundamental basis for an effective investment strategy. By acquiring such knowledge, athletes will enhance their ability to develop a robust investment plan that is resilient to inflation. Hence, it is imperative for athletes to actively pursue financial counsel, as there exists a multitude of advisors who can offer them the necessary assistance, direction, and expertise required to construct a robust investment strategy that ensures long-term viability, while safeguarding against potential financial setbacks stemming from the prevailing economic climate.Item Macroeconomic Indicators and Mortgage Uptake in Housing Finance Group Public Limited Company, Kenya(Kenyatta University, 2024-05) Malelu,Eunice NdukiKenya has a significant housing demand that is fueled by urbanization trends and a growing population. As a result, the existence of an effective housing financing system is crucial for meeting both individual housing demands as well as the growth of the construction, financial, and related industries. However, Kenya has faced challenges in providing accessible and affordable home finance options, with fewer than 27,000 mortgage accounts reported as of December 2021. Additionally, financial institutions have often offered limited long-term financing solutions, with only a few utilizing capital markets for mortgage loan financing. The primary objective of this research project was to establish a relationship between macroeconomic indicators and mortgage uptake within HF Group Plc. Specifically, the study aimed to investigate the impact of inflation rates, mortgage interest rates, exchange rates, and GDP growth rates on mortgage uptake within Housing Finance Group Plc. A number of economic theories, including the Purchasing Power Parity Theory, Fisher’s theory, the Title theory, the Lien theory of mortgages, and the Classical Theory of Interest Rates, informed the study. A descriptive research design was used to carry out this study. The HF Group Plc made up the study's target population. The study used both secondary and primary data sources. Books, academic publications, online databases, and financial records from HF Group Plc were used to collect secondary data. Primary data was collected through questionnaires administered to 180 employees and 120 customers of HF Group Plc. Data was collected over a five-year period, spanning from 2018 to 2022. Data collected from various sources was meticulously organized and checked for outliers and errors using Microsoft Excel spreadsheets. Afterward, the data was transformed into panel format and imported into SPSS version 26 for analysis. Panel regression analysis was conducted to draw meaningful conclusions regarding the research variables, which include the dependent variable and independent variables. The study further subjected to statistical analysis that entailed Multicollinearity, Heteroscedasticity and normality. The researcher was committed to obtaining valid consent from every individual from whom data was collected. Furthermore, the researcher diligently upheld the confidentiality of the gathered information. The study findings led to conclusion that a statistically significant relationship exists between inflation (CPI) and mortgage loan uptake in Housing Finance Group mortgage interest rates significantly affected mortgage loan uptake in Housing Finance Group, exchange rates insignificantly affected the mortgage loan uptake in Housing Finance Group (HF), and finally was that a significant relationship exists between GDP and mortgage loan uptake in Housing Finance Group (HF). The research findings can assist financial institutions in shaping their marketing strategies and exploring diversification opportunities to enhance profitability and foster growth. This research findings can also aid potential homeowners in making informed decisions about real estate derivatives, potentially leading to significant cost savings The study recommends that the government, through its line ministries and policy institutions, should implement effective inflation control measures to mitigate the effects of inflation on mortgage loan uptake. The study also suggests that the management of Housing Finance (HF) in Kenya should consistently review and evaluate the prevailing economic conditions before extending mortgage loans. The study recommends that individuals considering mortgage loan uptake should regularly review and monitor any increases in lending interest ratesItem Cost of Production and Financial Performance of Selected Poutry Rearing Farmers in Kiambu County, Kenya(Kenyatta University, 2024-06) Kibunja,Elvin TaabuCommercial poultry farming in Kenya operate under various conditions and constrains, which stand on the way to the achievement of the enterprise leading to poor performance in the recent past. Comparatively, on a global perspective, the Kenyan poultry farming still struggles to remain competitive in the market. Profitability is mainly hampered by feed costs which counts for almost 70% of the total cost of production. The challenges the sector faces include high operational costs, shortage of funds for investing in the sector and inadequate knowledge among the farmers who desire to join into the sector as they lack field extension officers. This study therefore sought to investigate the effect of cost of production on performance of selected poultry rearing farmers in Kiambu County Kenya. The study was guided by specific objectives; the effect of feed costs, the effect of poultry equipment, the effect of brooding costs and the effect of medication costs on 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, the population included the over 10,000 small holder poultry farmers according to country-integrated plan 2018–2020 and the sample was drawn out using the Kothari formula with a sample of 378 respondents. Snow ball sampling method was used to reach the respondents. Primary data will be collected using questionnaires that will be pilot tested to ensure they are valid and reliable. Descriptive statistics of mean, percentages and standard deviation and inferential statistics including multiple regression analysis were conducted. Before data analysis, several diagnostic tests were carried out including normality, multicollinearity and to ensure that the data was fit for analysis. The findings were presented in tables and figures using percentages and frequencies to facilitate comparisons and conclusion. The study was conducted in line with all the ethical considerations pertaining research in Kenyatta University and Kenya, such as securing all required permissions from the University and NACOSTI. The study revealed that production cost including feeding cost, poultry equipment, brooding cost and medication cost all individually had a statistically significant effect on performance and therefore all the null hypotheses were rejected. Feeding cost and medication cost had negative statistically significant effect, meaning that when the cost for feeds and medication increases, they lead to a decrease in financial performance. Also increase poultry equipment and brooding cost were found to positively affect performance. 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.