RP-Accounting and Finance Department

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Assessing the Effect of Financial Literacy on Investment Decisions Among Matatu Savings and Credit Cooperative Societies in Kenya
(International Journal of Financial Research, 2025-04) Wakanyi, Moses Gathecha; Musau, Salome
Financial literacy has garnered significant attention in the realm of investment on a global scale over the years. This phenomenon is ascribed to its pivotal role in the process of making investment decisions. The global economy has undergone increased complexity; thus, it is imperative for each individual to engage actively and astutely in investment decision-making to effectively navigate the escalating cost of living. Numerous individuals exhibit interest in various forms of investments, finding them captivating due to the ability to make decisions and subsequently observe the consequences of those decisions. Nevertheless, not all investment endeavors yield profits, given that investors may not invariably be accurate in their decision-making. Therefore, this research sought to analyze the influence of financial literacy on the investment decisions of designated Matatu SACCO employees in Nanyuki town, Kenya. Specifically, the research involved evaluating the influence of savings techniques, debt management, financial planning, and project appraisal methods on investment decisions. Underpinning theories were information asymmetry, behavioral economics and financial education. A causal research design was employed, focusing on 8 Matatu SACCOs in Nanyuki Town, Kenya, as the units of analysis. Data was gathered from 195 employees of the SACCOs, representing various departments, utilizing a stratified sampling method and simple random sampling techniques for participant selection. The study encompassed a sample of 131 participants. Primary data was acquired through questionnaire. Descriptive analysis, correlation and multiple regression was utilized for data synthesis. The study revealed that saving techniques, debt management techniques, financial planning and project appraisal techniques had a positive significant effect on investment decisions. The study concludes that savings strategies often encourage financial literacy and education. As Matatu SACCO employees engage in saving, they may also seek information on various investment options available to them. Debt management strategies often involve education on financial planning, budgeting, and investment options enabling employees to gain a better understanding of their financial situation, which enhances their ability to make informed investment choices.. The study recommends that the Matatu SACCO should organize regular workshops focusing on financial literacy, covering topics such as budgeting, saving, and investment options. The Matatu SACCO should create a clear debt management policy that outlines acceptable debt levels, repayment schedules, and consequences of default. The Matatu SACCO should invite financial experts and successful investors to share their experiences and insights, providing real-world context to theoretical knowledge. The Matatu SACCO employees in Nanyuki town, Kenya should organize regular workshops and seminars focused on project evaluation methodologies, financial analysis, and investment decision-making
Financial Reporting, Tracking,and Analysis Practices Effect on Financial Performance of Commercial State Corporations in Kenya
(EdinBurg Peer Reviewed Journals and Books Publishers, 2024-07) Mwangi, Nguyo Stephen; Nkuru, Faith
In Kenya, legislative acts by parliament establish state corporations to promotesocial and economic progress. The state corporations advisory committee has identified eight distinct categories of these entities, which include financial, commercial, industrial, regulatory, public universities, training and research, service, regional development authorities, as well as tertiary education corporations. Out of the 33 state corporations in commercial and manufacturing category, 18 fall under manufacturing while 15 are commercial-oriented and therefore by their operational nature expected to make profits or operating surplus. The study focusedon the fifteen (15) profit-making state corporations. Most commercial state corporations are in a state of perennialloss-making. Their financial performance trend between 2016-2020, shows that out of the 15 corporations in the commercial sector, only four (26.67%) are sustainable from their operations. This leaves over 73.33% of them struggling to survive and have to depend on government funding to address their liquidity challenges.This study sought to assess the impact offinancial reporting and analysis on the financial performance of commercialstatecorporations in Kenya. The study assumed a descriptive study design. The study used a census procedure since all fifteen State Corporations under the commercial category were studied. Data was analysed using descriptive and inferential statistics. The inferential statistics results indicate that financial reporting and analysis have a positiveandstatistically significant effect on financial performance of commercial SOEs. The study found that improved financial performance was observed upon conducting periodical operational budget estimations, capital project estimations, periodical cash flow projections, and comparison of actual costs and budget variance analysis. The management and finance department to ensure that financial reporting processes are strengthened to enhance accuracy, openness, and compliance with governing requirements.Keywords:Financial Reporting, Tracking, Analysis, Financial Performance, Commercial State Corporations
Effect of Road Infrastructure on Selected Economic Development Indicators in Kenya
(East African Journal of Interdisciplinary Studies, 2025-05) Njihia, Dennis Kiiru; Nzai, Charles
Kenya, as a developing nation, has been making significant investments in infrastructure projects, including roads, railways, ports, and energy, in recent years. Such infrastructure development is expected to have far - reaching implications for various sect ors of the economy. Efficient and reliable infrastructure networks are crucial for facilitating trade, attracting investments, improving connectivity, reducing transaction costs, and promoting economic activities. However, while there is a general understa nding of the importance of infrastructure, it is essential to conduct a focused study to examine the specific effects and outcomes of infrastructure development in Kenya. The study was anchored by Solow neoclassical growth theory. A longitudinal research d esign was adopted. The study utilized time series secondary data from 1991 to 2021 on an annual basis. The data was obtained from the World Bank and the Kenya National Bureau of Statistics. Empirically, the study developed a transport - growth model that is an extension of Solow (1956) neoclassical growth function and estimate the model with time series data of Kenya. The study adopted Autoregressive Distributed Lag (ARDL) model and Granger causality approach as the technique for testing the study relationshi ps. Diagnostic tests such as normality, Multicollinearity, heteroskedasticity and autocorrelation was conducted to ensure that the assumptions of regression analysis are not violated. Ethical considerations was adhered to by obtaining permit from NACOSTI, Kenyatta university graduate school and the permission from the ethical committee. The short run effect were analysed using ECM informed by the positive cointegration status of the variables all the models. Road infrastructure, labour participation and ins titution quality index significantly affected economic growth. However, technological growth has insignificant effect on economic growth. It can be concluded that, based on empirical results technological progress has not been fully utilised to generate ec onomic growth. It is also important to point out that the creation of a conducive environment, particularly innovation and technological space enhances economic growth. This can be attained by having a tax haven for the inaugural innovators to sustain their motivation. Strong institutions are defined by adherence to the rule of law and conformity to
Digital Financial Services and Profitability of Microfinance Banks in Kenya
(International Journal of Social Science and Economic Research, 2024-11) Kimalit, Betty Jepkorir; Musau, Salome
This study's primary intent was to ascertain how digital financial services influenced Kenyan microfinance banks performance in terms of profitability. More precisely, mobile banking, internet banking, electronic funds transfer and credit card usage effect on profitability of microfinance banks in Kenya were the specific objectives. Transaction Cost Economics, Innovations Theory of Profits, and Technology Acceptance Model theories are the theories that guided formulation of the current study concepts used herein. The research design utilized here is causal research design. The research populace consists of 14 microfinance banks in Kenya which were surveyed in order to collect data from this small group. Drop and pick method was employed to collect data, from the senior managers (finance officers) of the Microfinance Banks. The gathered data was subjected to diagnostic testing, including tests for linearity, and multicollinearity, homoscedasticity, and normalcy. Following this, the data was evaluated using additional descriptive and inferential techniques to test the general evolution of the study variables and each hypothesis respectively. Findings portrayed that digital financial services significantly and positively affected profitability of microfinance banks in Kenya. The management of microfinance banks need to adopt less costly mobile banking approaches when meeting their digital clients’ needs for this will boost the profitability thereof. With reduced cost, it will assure a direct and effective boosting of the financial performance for there is a negative link between cost and earnings of an entity. Regulators including Central Bank of Kenya should develop digital financial services policies which guide on the protection of both the producers and consumers of digital financial services.
The Impact of Loss Ratio on the Financial Stability of Insurance Firms in Kenya
(Journal of Finance and Accounting, 2023-06) Ritho, Bonface Mugo; Simiyu, Eddie; Omagwa, Job
The insurance sector is an essential component for the continued expansion and prosperity of the economy. It is the responsibility of the insurance industry to secure the continued existence of enterprises, to disperse the risk that is caused by financial losses, and to work toward eradicating uncertainty in the minds of investors. Despite the important roleof theinsurance sector in the economy, firms operating in this sector have been having trouble maintaining their financial stability. The insurance sector has faced considerable volatility in profitability, resulting in some firms being placed under receivership or even going out of firm. The purpose of this study wasto analyse the effect of loss ratio on financial stability of insurance firms in Kenya. The study was anchored on the Theory of Distress by Wreckers. The research was conducted using an explanatory research design, and the positivist philosophical approach was utilized. The target population for this study consisted of the 46 insurance firms that held IRA licenses and were operating during the time period under consideration (2014-2021). The census method was utilized for the research thesis, which focused on all 46 insurance firms in Kenya. The study usedsecondary data obtained from audited financial statements, which were publicly available on the websites of individual insurance firms. To gather panel data for the study, a secondary data collection template was employed. In order to draw conclusions from the data that was gathered, this study employed both descriptive and inferential statistical methods. The studyemployed a generalized method of moments modelling guided by static panel regression. The data processing was done using the Stata software. The research findings were presented through the use of tables and trend line graphs. The study adhered to research ethics guidelines. The findings of this study showed that loss ratio had a significantnegative influence on the financial stability of Kenyan insurance companies (β = -0.5795373, p = 0.002 < .05).The study concludes that loss ratios and capital adequacy plays a significant role in the financial stability of insurance firms. A lower loss ratio indicates a more efficient underwriting process and risk management, contributing to better financial performance and stability. As a result, the study recommendsthat to enhance their financial stability, general insurers in Kenya should manage their loss ratio.It's also recommended that Kenya should adhere to the principles of the Solvency II framework.
Unravellingthe Dynamics: The Effectsof Leverage on the Financial Stability of Insurance Firmsin Kenya
(Journal of Finance and Accounting, 2023-06) Ritho, Bonface Mugo; Simiyu, Eddie; Omagwa, Job
Despite the crucial part that the insurance industry plays, firms operating in this sector have been having trouble maintaining their financial stability. The insurance industry has faced considerable volatility in profitability, resulting in some firms being placed under receivership or even going out of firm. The purpose of this study wasto analyse the effect of leverageon financial stability of insurance firms in Kenya. The study was informed byPecking Order Theory. The research was conducted using an explanatory research design, and the positivist philosophical approach was utilized. The target population for this study consisted of the 46 insurance firms that held IRA licenses and were operating during the time period under consideration (2014-2021). The census method was utilized for the research thesis, which focused on all 46 insurance firms in Kenya. The study usedsecondary data obtained from audited financial statements, which were publicly available on the websites of individual insurance firms. To gather panel data for the study, a secondary data collection template was employed. In order to draw conclusions from the data that was gathered, this study employed both descriptive and inferential statistical methods. The studyemployed a generalized method of moments modelling guided by static panel regression. The data processing was done using the Stata software. The research findings were presented through the use of tables, figures, and graphs. The findings of this study showed that leverage significantly and negatively impacted the financial stability of Kenyan insurance firms(β = -3.513831, p = 0.000 < .05).The study concludes that if leverage challenges are not adequately managed, they can have a detrimental influence on the profitability and capital of a particular insurance sector, and in the worst case scenarios, they can even force insurance sectors that are otherwise financially secure to fail. Thestudy recommendsthat the general insurers in Kenya should enhance their leverage in order to strengthen the financial stability of their firms. However, insurance firms should be careful not to leveragethemselves too much, since this can also be damaging to their long-term sustainability.
Firm Characteristics and Financial Performance of Licensed Microfinance Banks in Kenya
(International Research Journal Publishers, 2025-03) Munyithya, Veronica Muli; Musau, Salome
Microfinance institutions significantly contribute to the financial sector by providing credit facilities to low-income earners and the unbanked population. However, the rising economic crisis in Kenya has adversely affected the financial performance of Microfinance institutions, raising concerns about their sustainability. This study aims to investigate how firm characteristics such as capital adequacy, bank size, and management efficiency impact the financial health of microfinance banks in Kenya. The research spans a six-year period from 2018 to 2023, a time marked by rapid expansion in the microfinance sector and significant economic challenges, including the devaluation of the Kenyan shilling, corporate consolidation, and the takeover of financial institutions. The theoretical framework of the study is underpinned by Capital Buffer Theory, Economic Theory and Efficiency Structure Theory. A descriptive research design was employed, collected secondary data from the published financial reports of the 13 licensed microfinance banks in Kenya, using a census sampling method. Ethical and logistical standards were rigorously followed, ensuring voluntary participation and maintaining data confidentiality. Results revealed a strong positive correlation between capital adequacy and financial performance. Management efficiency also showed a significant positive correlation with financial performance, while bank size showed a weaker relationship. Panel regression further confirmed that capital adequacy and management efficiency had a positive impact on financial performance, whereas bank size had a minimal effect. Conclusions from the study indicate that firm characteristics significantly influence financial performance. Larger banks due to economies of scale and diversified portfolios, tend to perform better, implying that growth and expansion strategies can enhance financial stability. Capital adequacy emerged as a crucial determinant of financial health, with well-capitalized banks being more resilient to financial shocks and better positioned for growth. Management efficiency also played a key role, with better-managed institutions showing higher profitability through cost control and optimal resource allocation. These insights can guide policymakers and bank managers in crafting strategies to bolster the financial resilience of Microfinance institutions s, with an emphasis on maintaining robust capital adequacy ratios and enhancing managerial capabilities to drive longterm sustainability and competitiveness.
Financial literacy and investment decisions among middle and long-distance elite athletes in Kenya
(Strategic journals, 2024-02) Nyang’au, Fednard Machoka; Njoka, Charity
This study examined the impact of financial literacy on the investment decision-making process among middleand long-distance elite athletes in Kenya. 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 of both stratified and purposive sampling methodologies in order to identify the specific participants. Data collection was conducted using structured questionnaires. 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 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.
Internal Corporate Governance Mechanism and Firms Value of Selected Companies Listed at the Nairobi Securities Exchange, Kenya
(IOSR Journal of Economics and Finance, 2024) Abdullahi, Guhad Ibrahim; Simiyu, Eddy
Manufacturing, construction, and allied firms at the Nairobi Securities Exchange (NSE) faced significant challenges, as evidenced by a decline in market value over recent years. Despite effective corporate governance beneficial value in instilling the confidence of investors and enhancing the market value, empirical studies specifically focusing on the manufacturing, construction, and allied sector in Kenya were lacking. These sectors were important in the Big Four Agenda, specifically in affordable housing and manufacturing policies, with manufacturing expected to grow to 15% of GDP by 2030. Drawing from recent market data, it was evident that companies such as Unga Limited, Eveready, Mumias Sugar, Bamburi Cement, Crown Paints, and East African Portland experienced stagnation or decline in their firm value, highlighting the need for a comprehensive examination of corporate governance mechanisms within the sector. This study's main objective was to ascertain how internal corporate governance practices affected the selected firm value in the NSE. The specific objectives included examining the effect of board size, ownership structure, and board independence on firm value, determining the mediating effect of profitability and the moderating effect of foreign capital flows on the relationship between internal corporate governance mechanisms and firm value. The study variables were anchored on Agency Theory, Transaction Cost Theory, Stakeholder Theory, Knight's Theory of Profit, and Efficient Market Theory. The research opted for the explanatory design and collated panel data for 14 firms at the NSE covering the years 2014 to 2023. Data collection relied on secondary sources, primarily annual financial reports, to identify trends and patterns. Data analysis encompassed both descriptive and inferential techniques, including means, standard deviations, and panel regression analysis using the STATA software. Diagnostic tests were conducted to validate the model and address potential issues such as multicollinearity, normality, stationarity, heteroscedasticity, and model specification. The study tested various hypotheses and found that board size positively affected firm value (p = 0.001 < 0.05, t = 3.41 > 6, β = 0.075), with the optimal size around nine members. Board independence was positively correlated with firm value (p = 0.006 < 0.05, t = 2.76 > 6, β = 0.008), emphasizing the importance of having independent directors. The study also found that ownership structure, while balanced, did not significantly influence firm value (p = 0.0287 > 0.05, t = 1.12 < 1.96, β = 0.065), indicating other governance mechanisms may be more critical. The mediating variable profitability significantly mediated corporate governance and firm value association with a β =0.344, (p = 0.025 < 0.05). The moderating variable foreign capital inflow was found to be a positive and significant determinant of foreign capital inflow. It explained 10.002% variance of firm value with a Beta of 1.85831. Recommendations for corporate managers include optimizing board size, increasing board independence, and enhancing profitability strategies. Policymakers are advised to promote balanced ownership structures and foreign investment. Stakeholders should advocate for governance practices that align with these findings to ensure sustainable firm value.
Influence of Mobile Banking on the Profitability of Deposit-taking Saccos in Kenya
(International Journal of Social Science and Humanities Research, 2025-03) Otieno, Lilian Atieno; Omagwa, Job
The Deposit Taking Savings and Credit Cooperative Societies in the Country are gradually adapting to rapid changes by embracing new ways such as establishing loan products, enhanced communication, knowledge and technology. Savings and credit deposits Cooperative societies have adopted transactional self-service via mobile and telephone banking. Through the introduction of Front Office Services, Savings and credit deposits Cooperative societies also use of computerized technology, like the networks of Automated Teller Machines, to serve its customers this has led to increased customer satisfaction, transaction costs have decreased, and the efficiency and profitability of banks have both improved from the widespread embracing of electronic banking. Therefore, this study sought to assess the influence of mobile banking on the profitability of deposit-taking SACCOs in Kenya. The study used a descriptive survey research design. With a focus on forty companies that are licensed by the Savings and Credit CoOperative Societies Regulatory Authority and function in Kenya. A census took place on all forty teacher-based companies with a scope of five years from 2018 to 2022. Secondary data was used that was obtained through a specialized data gathering instrument. In addition, the study relied on publicly available information sources, such as published financial statements and annual reports for the enumerated Savings and credit deposits Cooperative societies. To evaluate data, descriptive statistics (percentages, measures of central tendency and frequencies) as well as multiple regression analysis was used. The research revealed a significant positive impact of mobile banking on the profitability of deposit-taking Savings and Credit Co-Operative Societies in Kenya. The research finds that the companies analyzed which implement mobile banking access a wider customer segment, enabling them to draw in additional deposits and enhance their ability to lend. The research suggests that companies should create a mobile banking app that is user-friendly and straightforward to navigate, allowing individuals of all ages to utilize it efficiently.
Branchless Banking Services and Financial Stability of Commercial Banksin Kenya
(Journal of Finance and Accounting, 2025-02) Momanyi, Moraa Lucy; Mungai, John
Purpose: Financial stability is a key goal for commercial banks, as it allows them to operate effectively in fulfilling their role as intermediaries in the financial system. Technological advancements, creative financial products, shifting consumer needs, and the utilization of different distribution channels are all having an impact on the banking sector. The purpose of this study was to investigate how Kenyan commercial banks' financial stability is impacted by branchless banking services. Methods: Using an explanatory research approach, the study concentrated on all 38 commercial banks as of December 31, 2023. From commercial banks, primary and secondary data spanning the years 2016 to 2022 was gathered. Data collecting sheets were used to gather secondary data. The gathered data were coded, cleaned, tabulated, and shown in tables before analysis. Statistics, both descriptive and inferential, were used to conclude. Descriptive statistics included the mean and standard deviation and inferential statistics included regression analysis. STATA 15 software was used for the analysis in this study. Results: The study found a positive and significant relationship between agency, mobile, and online banking services and financial stability. Conclusion: Agency, mobile, and online banking services have a positive and significant effect on financial stability of commercial banks. The study made recommendations that commercial banks should implement measures that will lead to increased use of branchless services such as ATM banking, agency banking, mobile banking, and online banking to improve their financial stability. The study also recommended that policymakers should make policies that aim at increasing the use of branchless banking services.
Strategy Implementation and Performance of Bakeries in Mombasa County
(The Strategic Journal of Business & Change Management, 2024-06) Omar Bakari Omar; Maende, Chrispen
Strategy implementation has been on the rise in the recent past due to its inherent capabilities of fostering organizational performance. None-the-less and despite embracing strategy implementation, organizations have been recording subpar performances. This study therefore sought to undertake an investigation in an attempt to unravel the effect of strategy implementation on the performance of bakeries in Mombasa County. Precisely, the study investigated the effect of strategy communication, resources availability, organizational culture as well as strategy monitoring and control on the performance of bakeries in Mombasa County. The agency theory, the resource-based view theory, the Hawthorn studies on organizational behavior as well as the balance score card theory were used in supporting the study variables. The study used the descriptive research design. The study employed primary data which was gathered via questionnaires. The primary data collected was quantitative in nature. The study sample size determination was through the stratified random sampling technique. The Cronbach Alpha value of 0.774 confirmed that the research instruments used in this study were reliable. The study conducted descriptive as well as the Pearson’s correlation analysis on the collected data. The test for normality, the test for autocorrelation as well as the test for multicollinearity were conducted on the data before running the multiple linear regression model. The R square result of 0.409 and the ANOVA p-value of .000 confirmed that the instruments used in this study were fit and statistically significant. The regression coefficients generated from the model informed the conclusions in this study. The study, after data analysis, concluded that strategy communication, resources availability, organizational culture as well as strategy monitoring and control have a significant positive effect on the performance of bakeries in Mombasa County. The research therefore, recommended that the managers in the bakeries in Mombasa County should always endeavor to implement the strategies formulated, because it was evident from this study that implementing strategies results into positive performances. The researcher also recommended that policy formulating and regulatory bodies in the baking industry should devise policies and regulation which favor strategy implementation.
International Financial Reporting Standard 9 and Performance of Commercial Banks in Kenya
(African Development Finance Journal, 2025-03) Thogo, Mburu Daniel; Warui, Frederick; Musau, Salome
Commercial banks play a critical role in resource allocation and financial intermediation, channeling funds from depositors to investors. In response to the 2007–2008 global financial crisis, regulators introduced measures to enhance financial stability, including the International Financial Reporting Standard 9 (IFRS 9), issued by the International Accounting Standards Board in 2014. IFRS 9 replaced IAS 39, aiming to strengthen bank financial performance through a forward-looking credit risk management framework and expected credit loss (ECL) provisioning. However, studies have suggested that the early recognition of credit losses and stricter risk management practices under IFRS 9 may negatively impact bank profitability. This study examines the impact of IFRS 9 on the financial performance of commercial banks in Kenya, focusing on loan loss provisioning, credit risk, and capital adequacy. Additionally, bank competition was analyzed as a moderating factor. The research is grounded in Credit Risk Theory, Asymmetric Information Theory, Agency Cost Theory, the Basel Capital Adequacy Framework, and the Structure-Conduct-Paradigm Theory. A positivist research philosophy and a longitudinal design were employed, utilizing secondary data from 39 banks over the period 2018–2022, sourced from audited financial statements and Central Bank of Kenya supervision reports. Descriptive statistics and panel regression analysis were conducted, alongside diagnostic tests to ensure data reliability. The findings indicate that loan loss provisioning, credit risk management, and capital adequacy have a significant positive impact on bank performance. Additionally, market share was found to moderate this relationship. The study recommends that bank managers enhance loan loss provisioning, maintain adequate capital buffers to meet regulatory requirements, and strategically expand market share to improve financial performance.
Firm Characteristics and Quality of Financial Reporting of Agricultural Firms Listed at the Nairobi Securities Exchange, Kenya
(2024-09) Mmasi, Dennis Kupara; Gitagia, Francis
Statistics show that over 70% of Kenya’s population is employed in agricultural sector. It is further revealed that agricultural sector account for about 27% of the nation’s GDP. Good financial reporting is critical in ensuring transparency, fostering accountability, and bolstering investor confidence within the sector. Even with the acknowledged importance of financial reporting, gaps still exist in empirical research exploring how firm characteristics influence quality of financial reporting (FRQ) among quoted agricultural companies. This inquiry sought to examine the effect of firm characteristics on FRQ of listed agricultural firms. Specifically, the study was carried out to ascertain the impact of profitability, leverage, growth, and liquidity on FRQ among listed agricultural firms. The data was obtained for the period spanning from 2019 to 2023. The project was hinged on agency theory, positive accounting theory, and signaling theory. The research followed a correlational study design to explore the set objectives. The target population constituted 7 listed agricultural firms. The sample size was obtained through a census of all the listed agricultural firms. The study employed secondary data obtained from company’s websites and audited financial statements to achieve the primary goal. The data obtained was analyzed through both inferential statistics such as ANOVA regression and Pearson’s Correlation and descriptive statistics. SPSS version 29 was used as the main tool of analysis. The results showed that firm growth, leverage, and profitability had weak negative effect on the FRQ. It was further revealed that liquidity positively and significantly influence FRQ. The study concluded that an increase in profitability, debt financing, and firm growth lowered FRQ while an increase in firm liquidity led to a higher FRQ. The study recommended that firms maintain strong liquidity positions because it is associated with better FRQ. Future research should determine the mediating role of corporate governance mechanisms on the relationship between firm characteristics and FRQ, and include other firms not listed at the NSE like private companies
Effects of Working Capital Management on Profitability of Deposit Taking Microfinance Institutions in Nairobi City County – Kenya
(IJARKE, 2024) Macharia,Marion Nyambura; Jagongo, Ambrose
The aim of this research was to ascertain how working capital management affects the profitability of Deposit Taking Microfinance Institutions in Nairobi City County, Kenya. The specific objective was to finding out how accounts payable management affects the deposit of Deposit Taking Microfinance Institutions in Nairobi City-County, Kenya. The study was based on Liquidity Preference Theory (LPT). The study used a descriptive research methodology the target population was all 14 Deposit Taking Microfinance Institutions in Nairobi City-County, Kenya registered, regulated, and operating from 2018 to 2022. The study employed census sampling technique. The research utilized panel data for a five-year period (2018–2022). The results were presented in tables for simplicity of perception. The study concluded that there was significant connection between the cost-effectiveness of Deposit Taking Microfinance Institutions and accounts payable management. The researcher concluded on several issues one of them being that Deposit Taking Microfinance Institutions should concentrate more on sustainability measures on accounts payable management as a unit change in APM led to the highest increment on profitability. The researcher further recommend that other sectors of the economy apart from the Micro-finance institutions be examined as well as other factors of variables of Working Capital Management can be considered
Capital Structure and Firm Efficiency of Deposit Taking Saccos in Kenya
(Journal of Finance and Accounting, 2024-04) Gichinga, Raphael Njenga; Gatauwa, James; Kimutai, Carolyne
The stability and resilience of SACCOs' performance stood out both during and after the coronavirus epidemic. However, the average variable returns to scale regarding the ratio of members' deposits to loans issued by SACCOs is inefficient, with a ratio of less than one. This inefficiency impacts revenues and, in turn, the interest paid on members' deposits.. This study sort to investigate the effect of capital structure on the firm efficiency of deposit taking saccos in Kenya and was anchored on financial intermediation Theory, economic efficiency theory and capital structure theories. The study adopted a positivist paradigm and causal research design and target population of all 176 saccos as at 2021.A data review guide was used to extract secondary quantitative data from the saccos published financial reports from year 2015 to 2021. Stata version 13 was employed to run descriptive and inferential statistics after computing efficiency scores using data envelopment analysis model and results presented in graphs and tables. The study findings indicate that saccos efficiency has an increasing growth trend though not optimal with variable return to scale contributing the highest levels in efficiency relative to scale efficiency while capital structure does not significantly affect level of efficiency. The study recommends that the deposit-taking savings and credit management board strategize and implement a rebate payment policy, comply with regulations on external borrowing, and improve strategies for collecting deposits. Additionally, the study suggests further research to determine if specific elements of capital structure significantly influence the efficiency of deposit-taking savings and credit societies.
Prudential Regulations and Financial Performance of Microfinance Banks in Kenya
(The Strategic Journal of Business & Change Management, 2024-03) Muchai, Grace Wanja; Muchira, Bancy Wawira
As financial intermediaries, microfinance banks are crucial. The growth of an economy is significantly influenced by microfinance institutions’ financial performance, in addition to their function in intermediation. The prudential guidelines and financial health of Kenyan microfinance banks were examined in this study. The precise objectives looked on how credit, capital adequacy, and liquidity regulations affected Kenyan banks’ financial performance. Lastly, the researchers looked into how the microfinance institutions’ size impacts prudential regulations and financial performance. The study was grounded in the theories of stakeholders, capital buffer, and liquidity management. The sample approach used was census sampling, and the research design was explanatory. The 13 MFBs that made up the target population and are accredited by the Central Bank of Kenya produced audited financial statements and yearly reports, which provided secondary data. Normality, multicollinearity, stationary, autocorrelation, heteroscedasticity, and diagnostic tests were performed on the data. Additionally, multiple regression analyses, correlation analyses, and descriptive statistics were carried out. The results showed that capital adequacy regulations significantly influenced MFBs' financial performance, highlighting the importance of maintaining sufficient core capital. However, liquidity regulations did not significantly impact performance, suggesting customer deposit ratios may not be a critical factor. Credit regulation, specifically non-performing loans, had a significant negative impact, highlighting the importance of effective credit management. The association between performance and prudential regulations is not affected by MFB size. These findings highlight the importance of targeted and effective regulatory measures in the microfinance sector
Investment Strategies used by Diaspora Citizens in Social Economic Development in Kenya
(Journal of African Interdisciplinary Studies, 2024-06) Mbabu, Nelly Muthoni; Ondere, Phillip Kilonzo
The aim of this study was to explore the investment strategies used by diaspora citizens in social economic development in Kenya. This study was anchored on the Rational Choice Theory. The study adopted a qualitative research design. The target population included employment agencies that take people to gulf region, government official in the ministry of labor and social services and foreign affairs ministries, returned migrant workers from the Gulf Region, diasporas already in Gulf and their custodians. The study used both snow balling and purposive sampling to select the respondents. Questionnaires, interview guide and Focused Group Discussion (FGD) were used as the main instruments of data collection. The data was organized, edited, analyzed and interpreted qualitatively using thematic analysis and was used in identifying key patterns and themes from interviews. This was presented using narrative form and in relation to the key study objective. Based on this objective, the study findings revealed that the diasporas have offered welfare support, creation of investment, poverty alleviation initiatives, monetary remittances while working in the gulf and by venturing into various businesses. The findings also revealed that remittance flows to Kenya are regular and are remitted monthly, directed at nuclear family members and largely cater for basic household needs such as food, household goods, medicine, paying rent, paying school fees, paying household utilities, clothing needs, setting up businesses and for medical services. The study concluded that investment strategies used by diaspora citizens have a significant effect on social economic development in Kenya from 2014-2022. The study recommends that the government should implement a friendly policy that ensures that the members of the diasporas contribute to national development and this is through introducing productive ventures that will encourage them to remit money back home for national development.
Housing Costs and Financial Health of Housing Development Institutions in Nairobi Metropolitan Area, Kenya
(2025-05) Mokembo, Josephat Nyauncho; Kosgei, Margaret
This study examined the effect of housing costs on the financial health of housing development institutions in the Nairobi Metropolitan Area, Kenya. The study was founded on the theories of housing adjustment, urban economics, positive theory of housing, and Marxist theory of housing. The 53 home development organizations in the Nairobi Metropolitan Area that were registered with the Kenya Property Developers Association made up the study's target population. The study purposively selected 16 institutions. The study employed descriptive statistics for data analysis and utilized the Statistical Package for Social Sciences (SPSS) version 26 as the statistical analysis software. The study found that the financial health of housing development organizations in the Nairobi Metropolitan Area was positively and significantly impacted by building costs (β1=0.018; p-value = 0.000). The financial health of housing development organizations in the Nairobi Metropolitan Area was positively and significantly impacted by operational costs (β1=0.692; p-value = 0.000). According to the study, financing costs had a favorable and significant impact on the financial stability of housing development organizations in the Nairobi Metropolitan Area (β1=0.747; p-value = 0.000). The study concludes that housing development institutions prioritize detailed project planning and efficient resource allocation. It also finds that controlling operating costs is essential for the long-term financial health of these institutions. Housing development institutions should prioritize detailed project planning and efficient resource allocation. It is recommended that housing institutions should control operating costs for long-term financial health. This study recommends that housing development institutions should strive to secure favorable loan terms and explore alternative financing options
Cashflow Management Practices and the Financial Performance of Five-Star Hotels in Nairobi County, Kenya
(Stratford Peer Reviewed Journals and Book Publishing, 2023) Chepkonga, ercy Jepchumba; Kimutai, Caroline
Financial performance of entities in the hospitality industry continue to elicit widespread scholarly interest in the modern competitive business landscape. Effective cashflow management practices remain the mainstay of financial performance in most organizations. However, scholarly research on cashflow management practices enable performance improvement in Kenya’s hospitality industry particularly five-star hotels in Nairobi County is largely limited. The current study examined cashflow management practices’ impact on the financial performance of five-star hotels in Nairobi County, Kenya. The theory that underpinned the study is the Liquidity Preference Theory. A descriptive research design was used and it involved using a survey distributed to all five-star hotels in Kenya. Financial and general managers and their assistants from each five-star hotel provided insights through a closed-ended questionnaire that enabled the researcher to collect and analyze numeric data. Data collected was coded and entered into the package referred to as the Statistical Package for Social Sciences (SPSS) used to analyze quantitative data. The analyzed data revealed that there is a significant relationship between cashflow management practices (p=0.039; p<0.05) and the financial performance of five-star hotels in Nairobi City County, Kenya. The study recommended that five-star hotels in Nairobi County should adopt effective strategies for cashflow management to actualize improved financial performance.

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