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Influence of Credit Risk Supervision Strategies on Financial Performance of Deposit-Taking SACCOs in Mombasa County, Kenya
No full textThe objective of the study was to investigate the influence of credit risk supervision strategies on the financial performance of Deposit-Taking Saccos in Mombasa County, Kenya. The study was supported by the credit risk theory. The study adopted the descriptive research design. The target population included 109 participants from all the six-deposit taking SACCOs in Mombasa County. The stratified random sampling technique resulted into having 86 units of analysis. The study used primary data which was collected using questionnaires. The gathered data underwent decoding and analysis using the Statistical Package for the Social Sciences version 26. The study employed simple linear regression model in data analysis. The study found a strong positive correlation of 0.407 between credit risk supervision strategies and financial performance. Additionally, the results of the regression analysis indicated that credit risk supervision strategies explained more than 40.8% of the variability in the financial performance of the SACCOs in Mombasa County. The hypothesis testing led to the rejection of H01. The rejection of H01 confirmed that credit risk supervision strategies have a positive and significant influence on the financial performance of SACCOs in Mombasa County, Kenya. The study concludes that credit risk supervision strategies a significant role in enhancing the financial performance of the SACCO sector in Mombasa County, Kenya. The study recommends that deposit taking SACCOs in Mombasa County should prioritize the implementation of robust credit risk supervision strategies to enhance their financial performance. Additionally, SACCOs should invest in comprehensive employee training programs to ensure that their workforce is well-equipped to adhere to optimal lending practices and risk management protocols. The study also recommends that policy formulating and regulatory bodies such as SASRA should devise mechanisms and enforce policies which are geared towards enabling SACCOs to develop strategies which will enable them monitor their credit
Keywords: Credit risk supervision strategies, financial performance, deposit-taking saccos Mombasa County, Keny
Analyzing the Effect of Liquidity on Financial Stability: Evidence from Kenyan Deposit-Taking Savings and Credit Cooperative Societies
No full textNon-performing loans have been on the rise among DT SACCOs in Kenya over the past five years as evidenced by the increase in percentage of NPLs to gross loans in SACCO regulatory authority report of 2020. Consequently, if this trend is allowed to continue then this sector’s contribution to financial intermediation through provision of financial services will be negatively affected. In view of the above this study sought to investigate the effect of firm characteristics and financial stability of deposit taking savings and credit cooperative societies in Kenya. In view of the above this study sought to assess the effect of liquidity on financial stability of deposit taking savings and credit and cooperative societies in Kenya. The study was anchored on agency theory. Positivist research philosophy was adopted in this study. The study adopted explanatory research design. The target population for the study comprised 160 DT SACCOs which were fully operational in the period. A census approach was used for the study. This study utilized quantitative secondary data which was obtained from the society’s financial statements and supervision reports from the savings and credit cooperatives regulatory authority. The study utilized annual panel data for the period of 2017 to 2021. Multicollinearity test, normality tests, autocorrelation test, homoscedasticity, stationarity test and model specification test were carried out prior to panel data analysis. Data was analyzed using descriptive statistics, Pearson’s correlation analysis and panel regression analysis. STATA software was used for the analysis. The findings showed that liquidity had a strong, positive effect on NPLs ratio (β = 0.410056, p=0.003<0.05). In view of the findings, the study recommends that DT SACCOs with high liquidity levels should consider implementing rigorous lending practices to ensure that loans are extended to creditworthy borrowers. Additionally, effective credit risk assessment and continuous monitoring of borrower repayment behavior are essential to minimize NPLs. DT SACCOs should focus on improving management efficiency by implementing cost-effective operational processes.
Keywords: Liquidity, Liquidity Ratio, Financial stability, Deposit-taking, Savings and Credit Cooperative Societies (SACCOs), Kenya
The Moderating Effect of Management Efficiency in the Relationship between IFRS 9 and CRM in Commercial Banks in East Africa
No full textThe adoption of IFRS 9 has ignited a debate among academics about its impact on credit risk management (CRM) in commercial banks. This study sought to evaluate the moderating effect of management efficiency in the relationship between IFRS 9 and CRM in commercial banks in East Africa. The study used quantitative methods, specifically panel data analysis, and is anchored the Problem Loans and Cost Efficiency Hypothesis. The study used data from 2015 to 2021, covering financial years before and after the adoption of International Financial Reporting Standard No. 9. Secondary data was gathered from the annual financial statements of commercial banks in four East African countries chosen for this study. The data was processed using the statistical software STATA version 14 to generate descriptive and inferential statistics to determine the trend underlying the connection between the dependent and independent variables. The results indicated that management efficiency had a significant moderating effect on the relationship between IFRS 9 and CRM. The model coefficient values were all positive, and the p-values were all less than 0.05. After the interaction, the coefficient of determination increased from 58.02% to 74.61% before and after moderation models, respectively. This implies that credit risk management is significantly related to the interaction term of the independent variables; expected credit losses (p=0.0130), credit loss volatility (p=0.000), and the change in the method of computing interest on NPLs (p=0.037). This implies that management efficiency has significant effects on credit risk management in the long run. The study concludes that efficient management practices are essential for identifying, measuring, mitigating, pricing, and controlling credit risks, enhancing overall bank performance. The study recommends that commercial banks in East Africa prioritize and enhance management efficiency by building strong governance structures, developing a risk-management culture, providing employee training, and implementing robust performance management for credit risk management teams
Effect of Client Appraisal on the Profitability of Manufacturing Firms in Kenya
No full textThe objective of the study was to determine the effect of client appraisal on the profitability of manufacturing firms in Kenya. The study was anchored on the Credit Scoring Theory. The study adopted the descriptive research design. The Target population for the study was 1,008 registered manufacturing firms in Kenya, whereas the sample size was 286 unit of analysis which were selected via the stratified random sampling technique. The researcher used primary data which was collected using questionnaires. The statistical package for social sciences version 20 was used in analyzing the collected data. The study conducted the test for normality and the test for linearity so as to confirm the fitness and statistical significance of the simple linear regression model used in this study. The regression coefficients generated from the model were used in testing the hypothesis at .05 level of significance. The p-value of .001 for H01 informed the rejection of H01. The rejection of H01, confirmed that client appraisal has a significant effect on the profitability of manufacturing firms in Kenya. The study therefore, concluded that manufacturing firms in Kenya should focus on investing in client appraisal since they significantly affect their performances. The outcomes from the study would be helpful to managers in the manufacturing firms in making informed decisions with reference to client appraisals. The study also enriched the literature in the field of finance. The study recommends that policy formulating bodies and regulatory bodies should devise policies which support formulation and implementation of client appraisal techniques, this is because it has an overall positive effect on the profitability of manufacturing firms in Kenya.
Keyword: Client Appraisal, Profitability, manufacturing firms, Credit Scoring, Keny
Project Resources Management and Performance of Livestock Projects in Rwanda. A Case of Rwanda Dairy Development Project (RDDP) in Gicumbi District
No full textThe purpose of this study was to assess the effect of resource management practices on the performance of livestock projects in Rwanda. The study was guided by the following specific objectives: To investigate the effect of resource planning to the performance of RDDP in Gicumbi District; to assess the effect of project implementation to the performance of RDDP in Gicumbi District; to find out the effect of resource monitoring and evaluation to the performance of RDDP in Gicumbi District and finally to determine the effect of mediating variables to the performance of RDDP in Gicumbi District. This study was carried out in Gicumbi District using descriptive survey design and targeting 648 population including RDDP implementers, beneficiaries and stakeholders. The sample size was calculated using Slovin’s formula. The study used 219 respondents who were selected purposively from RDDP’s beneficiaries, stakeholders and implementers. Data was collected using structured questionnaire, Kobo Toolbox software and interview. Coded filled sheets were used for extracting data from the returned questionnaires. The data was analyzed using SPSS and the findings showed that a number of factors affect the performance of livestock projects in Rwanda. A correlation matrix indicating the relationships among variables show that there are strong positive correlations with Project performance (0.785, 0.775 and 0.689) emphasizing the significance p-values (Sig. 2-tailed = .000) of effective Project resources planning, Project implementation and Project resources monitoring respectively. The correlation coefficient, represented by the value of R, is 0.864 for this model. This indicates a strong positive correlation between the combined effects of the predictors and the dependent variable. The coefficient of determination, denoted as R2, is 0.747 and Project resources planning, Project implementation, and Project resources monitoring exhibit coefficients of β1: 0.429, β2: 0.477, β3: 0.101 while Mediating variables have β4 of 0.184 and Significance levels (p<0.05) indicate strong positive effects on project performance. The regression analysis p-value of 0.000 (Sig.<0.05) indicates the significant effect of project resource planning, implementation, and monitoring, as well as the mediating variable, on project performance in Gicumbi District. This leads to confirming that there is a significant positive effect of project resource management on project performance
Effect of Risk Management Practices on Project Success: A Case of Project of Intensification of the Beans Which Are Rich in Vitamin B, in Gakenke District, Rwanda
No full textThe study explored the complex relationship between risk management practices and project success in the context of the "Intensification of Beans Rich in Vitamin B" project in Gakenke District, Rwanda. In an era marked by dynamic project environments and a growing demand for sustainable development, effective risk management had emerged as a critical determinant of project success. This study sought to empirically assess the extent to which risk management practices influenced the success of the aforementioned project, with a focus on key variables such as risk identification, assessment, mitigation, and monitoring. The study took a mixed-methods approach, combining quantitative analysis of project data with qualitative insights gained through interviews and surveys. Project stakeholders, including project managers, team members, and local communities, were the primary participants in data collection. The study utilized a systematic random sampling method, collected data through questionnaires and interviews, and employed both quantitative (statistical) and qualitative (narrative) analysis techniques to present the findings. The multiple regression analysis showed that risk identification (β=0.83, p=0.017) and risk monitoring and control (β=0.523, p=0.002) had significant positive effects on project success. The model explained 28.2% of the variance in project success (adjusted R-squared=0.282). Both the null hypotheses that risk identification and risk monitoring/control have no significant effect on project success were rejected at the 5% level. This indicates that better risk identification practices and risk monitoring/control practices lead to greater project success for the intensification of vitamin B-rich bean project in Gakenke District, Rwanda.
Keywords: Risk Management, Project Success, Intensification, Beans, Vitamin
Risks Management Practices on Performance of Road Projects of Kenya Rural Roads Authority in Nakuru Region Kenya
No full textSuccessful road project implementation improves traffic safety and road quality. The performance of road projects of Kenya Rural Roads Authority helps to improve the living conditions of the local population. However, the performance of road projects of Kenya Rural Roads Authority in Nakuru has been fraught with difficulties, which has hampered the quality of the roads that have been built. Delays in project completion, cost overruns, poor quality projects, disputes, litigation, and, in some cases, complete project abandonment. Therefore, the main purpose of this study was to investigate the effect of risks management practices on performance of road projects of Kenya Rural Roads Authority in Nakuru Region Kenya. The study was guided by the following objectives; to assess the effect of risk identification on performance of road projects of Kenya Rural Roads Authority and to establish the effect of risk mitigation policy on performance of road projects of Kenya Rural Roads Authority in Nakuru Region, Kenya. The study was guided by the following theories; Uncertain theory, Project Management Competency Theory, agency theory and Control Theory. This study used descriptive survey research design. The accessible population were 208 employees. The sample size was 136 respondents. The researcher used a questionnaire as the main research instrument. The completed questionnaires were entered into the Statistical Package for Social Sciences (SPSS) Version 25 for coding. Data analysis involved both descriptive and inferential statistical methods. Descriptive statistics were employed to summarize the quantitative data, providing a meaningful representation of the score distribution. These included frequencies, means, and standard deviations. For inferential statistics, correlation and multiple regression analyses were utilized. The analyzed data was presented using percentages, means, and standard deviations through frequency tables. The outcomes of this study are expected to aid the Government, specifically the Ministry of Transport and Public Works, in enhancing the quality of road construction in the county. This study would equally aid the county government in formulating policies and guidelines on how roads are supposed to be constructed with minimal risk. It was concluded that risk management practices are positive correlates of performance of road projects at KeRRA. It was recommended that in order to ensure timely completion of road projects at KeRRA within established quality standards, personnel and budget as well as schedule risks should be carefully identified by the project managers. There is need for accurate estimation of all costs during risk measurement to avoid cost overruns that may negatively affect the quality of the roads constructed by KeRRA. Project managers working with KeRRA should optimally leverage the existing methods of risk mitigation including avoidance, transfer and acceptance depending on the prevailing circumstances in order to enhance the quality and timeliness of the road projects. There is need for sound policies governing risk management activities at KeRRA
The Effect of Water Shortage on Households Well-being in Kigali City: A Case Study of Kicukiro District (2019-2022)
No full textThis research investigated the effect of water shortage on households’ well-being in Kicukiro District, Kigali City, Rwanda. The study employed a mixed-methods approach, combining quantitative and qualitative methods. The study in Kicukiro District includes a target population of 130,112 households. Employing Slovin's formula, the sample size was 398 respondents whom were selected using both stratified and purposive which are probability sampling and purposive and non-probability sampling method respectively. Data collection utilized structured questionnaires with Likert scales, administered to 386 households and 12 WASAC staff households were given semi-structured interviews by which the qualitative data were analyzed using thematic analysis. Both descriptive (mean and standard deviation) and inferential statistics Pearson correlation and regression analysis) were used to examine the relationships between water shortage and household well-being. Therefore, the results reveal significant concerns regarding water shortage-related issues in Kicukiro, with respondents showing high agreement levels. Key concerns include regional disparities (mean = 3.780, SD = 0.795), climate variability (mean = 4.140, SD = 0.656), and urbanization (mean = 4.350, SD = 0.603). Household well-being is strongly associated with water availability, sanitation, and hygiene, with mean scores indicating critical importance (reliable water sources, mean = 4.010, SD = 0.824). Correlation analysis shows moderate to strong positive relationships between water accessibility and various well-being factors. Regression analyses highlight the significant positive impact of water availability on hygiene (B = 0.596, p < 0.001), sanitation (B = 0.499, p < 0.001), quality of life (B = 0.278, p < 0.001), and reduction of waterborne diseases (B = 0.996, p < 0.001). These findings emphasize the relationship between water scarcity and household well-being in Kicukiro District, Rwanda. Hence, urgent interventions are needed to address water infrastructure challenges, promote community engagement, and improve hygiene practices. This study recommends prioritizing water infrastructure development, fostering community participation, promoting hygiene education, and enhancing healthcare services in order to safeguard the health and improve the overall well-being of residents of Kicukiro District, Rwanda.
Keywords: Households’ Well-Being, Hygiene and Sanitation, Water Availability, Water Shortage, Waterborne Disease
Effect of Healthcare Inventory Management Practices on the Performance of Pharmaceutical Companies’ in Rwanda; A Case of Selected Retail Pharmacies in Gasabo District
No full textThis study investigated the effect of healthcare inventory management practices on the performance of pharmaceutical companies in Rwanda with special focus on selected retail pharmacies located in Gasabo District. This research adopted a descriptive design to describe healthcare inventory management practices most used in retail pharmacies setting and a multivariate regression analysis to determine their effect on retail pharmacies performance. This study targeted a population of 195 respondents where all responsible pharmacists were selected to take part in it, unfortunately only 142 respondents took part in it and the data were collected using a questionnaire of both open ended and close ended questions. Then after, data gathered were processed and analyzed based on objectives to test the hypothesis. The study revealed that retail pharmacies in Rwanda employ a variety of approaches in managing inventory where the Economic Order Quantity (EOQ) method was the most widely used at 46.3%, indicating a focus on cost-effective inventory management. The majority of respondents strongly agreed that inventory control techniques were effective in reducing stock outs, maintaining appropriate inventory quantities, minimizing wastage and losses. Inventory shrinkages, such as expiration, damages, theft, and stock outs, significantly impact pharmacy performance, so emphasizing on addressing these issues through good inventory management would improve the performance effectively. The use of various stock management software systems was also examined, with Ishyiga being the most widely adopted system. These findings suggest that effective inventory management is essential for pharmacy performance, with technology adoption playing a pivotal role in enhancing efficiency and accuracy. The study also highlights the importance of addressing inventory shrinkages and utilizing various inventory control techniques. Therefore, inventory management practices play a crucial role in enhancing various aspects of pharmacy operations.
Keywords: Healthcare Inventory Management Practices, Performance of Pharmaceutical Companies, Retail Pharmacies, Gasabo District, Rwanda
Effect of Investment Diversification in Short-term Government Securities on the Financial Performance of Retirement Benefits Schemes in Kenya
No full textThe study investigated the effect of investment diversification in short-term government securities on the financial performance of the retirement benefits schemes in Kenya. The study further investigated the moderating effect of the foreign exchange rate on the relationship between the independent and the dependent variable. The liquidity preference theory was employed in supporting this study. The study embraced a descriptive research design and the study population constituted of 87 retirement benefits schemes. The stratified random sampling technique used resulted into having 72 units of analysis. Primary and secondary quantitative data were employed in this study. Data analysis was through the statistical package for social sciences. The hypothesis testing led to the rejection of H01, and H02. The rejection H01 confirmed that investment diversification in short-term government securities has a significant positive effect on the financial performance of the retirement benefits schemes in Kenya. The rejection of H02 confirmed that foreign exchange rate has a significant positive moderating effect on the relationship between investment diversification in short-term government securities and the financial performance of the retirement benefits schemes in Kenya. The researcher therefore, recommends that the retirement benefits schemes should consider diversifying their investments in short-term government securities because it affects their financial performance. The researcher also recommends that the schemes should be cautious on the volatility of the foreign exchange rate because it has a moderating effect on the relationship between the investment diversification in short-term government securities and their financial performance.
Keywords: Short-term Government Securities, Investments Diversification, Portfolio, Financial Performance, Retirement Benefits Scheme