Capital Lifecycle and Financial Stability of Women Table Banking Groups in Nakuru County, Kenya
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Date
2025-10
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Kenyatta University
Abstract
Poverty remains a significant challenge for women in Sub-Saharan Africa, with many experiencing economic marginalization and limited access to financial resources. While table banking has shown promise in empowering women through microfinance services, the financial stability of these groups in Nakuru County is under threat, with many failing to sustain operations beyond three years. The consistent underperformance and lower Gross Profit Margins compared to national averages highlight critical issues that jeopardize the long-term effectiveness of table banking in the region. This research aimed to ascertain how Capital life cycle influences the fiscal soundness of women's table banking collectives within Nakuru County, Kenya. Specifically, it probed the effect of Capital generation, Capital distribution, Capital deployment, and capital reinvestment on the financial resilience of these groups in Nakuru County, Kenya. The study's timeframe spanned from January 1st, 2021, to December 31st, 2023. It drew from Resource Mobilization Theory, Social capital theory, life cycle hypothesis, and financial intermediation Theory. A descriptive research design was used. The analysis unit comprised 322 table banking groups in Nakuru County. Data was gathered from chairpersons or leaders of each targeted women's group. Nassiuma's formula guided the sampling of 82 groups. Simple random sampling was employed for selection. A questionnaire was used for primary data collection. A preliminary study in Nakuru town involved 8 women's groups. Research instrument reliability was assessed via Cronbach's Alpha. Evaluative assessments such as Normality, Multicollinearity, autocorrelation, Stationarity, heteroscedasticity, and evaluations for constant/stochastic effects were performed. Descriptive (averages, dispersion) and inferential (Panel regressions, Pearson's coefficient) metrics were employed for analysis. Practicable Generalized Least Squares (FGLS) regression denoted noteworthy affirmative influences of Capital Generation (p=0.044), Capital Distribution (p=0.012), and Capital Reinvestment (p=0.0000) on monetary soundness. Conversely, Capital deployment exhibited a statistically significant negative effect (p=0.034) on financial soundness. Coefficient analysis revealed that Capital Generation and Capital Reinvestment showed a slight positive relationship with monetary soundness; Capital Distribution displayed a robust positive relationship with financial soundness, whereas Capital deployment presented a strong negative relationship with financial soundness. The study concluded that increases in Capital Formation, Capital Allocation, and Capital Recycling are positively associated with enhanced financial stability for women’s table banking groups in Nakuru County. However, when Capital Utilization rises, it may lead to difficulties in sustaining stable financial outcomes. Subsequently, it is recommended that women’s table banking groups in Nakuru County focus on strengthening Capital Formation by encouraging savings and efficient resource mobilization. Additionally, improving Capital Allocation processes to ensure that resources are directed towards the most productive and impactful areas can further enhance financial stability. Furthermore, promoting effective Capital Recycling practices will help maintain and improve financial health over time. Finally, caution should be exercised in increasing Capital Utilization, ensuring that it is balanced and does not compromise the group’s overall financial stability
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, October, 2025
Supervisor:
1.Francis Gitagia