Capital Flow and Financial Sustainability of Women Table Banking Groups in Embu County, Kenya
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Date
2025-05
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Kenyatta University
Abstract
Poverty among women in Sub-Saharan Africa remains a critical challenge, with many experiencing economic marginalization and limited access to financial resources. Table banking has emerged as an effective strategy to alleviate poverty by empowering women through access to microfinance services, enabling them to start or expand small businesses, save, and enhance their economic well-being. However, the financial sustainability of women's table banking groups, particularly in Embu County, has faced significant challenges, with groups reporting negative gross margins and underperforming national averages. Statistics indicate that only 4% of table banking groups in Kenya survive beyond their third year, and Embu County groups report fluctuating and lower gross profit margins compared to national benchmarks, emphasizing sustainability issues. This study sought to determine the effect of capital flow on the financial sustainability of women's table banking groups in Embu County, Kenya. Specifically, it assessed the effects of capital accumulation, capital apportionment, capital usage, and capital recycling on financial sustainability. Anchored on the Resource Mobilization Theory, Social Capital Theory, Life Cycle Hypothesis, and Financial Intermediation Theory, the study adopted a descriptive research design. The unit of analysis comprised 322 table banking groups, while the unit of observation was the group chairpersons or leaders. A sample of 82 groups was selected using Nassiuma’s formula and simple random sampling. Primary data were collected through structured questionnaires, which were subjected to a pilot test involving eight groups to establish reliability using Cronbach's Alpha and validity through content and criterion tests. Diagnostic tests, including normality, multicollinearity, autocorrelation, and heteroscedasticity, were conducted to ensure robust analysis. Feasible Generalized Least Squares (FGLS) regression results revealed that capital accumulation (p=0.076, <0.05), capital apportionment (p=0.023, <0.05), and capital recycling (p=0.003, <0.05) had a statistically significant positive effect on financial sustainability. In contrast, capital usage was found to have a statistically significant negative effect (p=0.034, <0.05) on financial sustainability. Correlation analysis showed that capital accumulation and capital recycling had a weak positive correlation with financial sustainability, while capital apportionment exhibited a strong positive correlation with financial sustainability. On the other hand, capital usage had a strong negative correlation with financial sustainability. The study concluded that increases in capital accumulation, capital apportionment, and capital recycling are positively linked to improved financial sustainability for women’s table banking groups in Embu County. However, rising capital usage may lead to challenges in maintaining stable financial outcomes. The study recommends that women’s table banking groups in Embu County focus on enhancing capital accumulation by promoting savings and effective resource mobilization. Furthermore, improving capital apportionment processes to ensure that resources are allocated to the most productive and impactful areas can further strengthen financial sustainability Additionally, encouraging effective capital recycling practices will help sustain and improve financial health over time. Lastly, caution should be exercised when increasing capital usage, ensuring it remains balanced and does not jeopardize the group’s overall financial sustainability. All ethical issues regarding authorization were sought from graduate school Kenyatta University and the National Council of Science and Technology.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirement for the Award of Degree of Master in Business Administration (Finance) of Kenyatta University, May 2025.
Supervisor
Francis Gitagia