Stratford Peer Reviewed Journals and Books
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Credit Risk Mitigation and Loan Performance of Financial Institution: A Case Study of Zigama Credit Saving Society
No full textDespite the fact that Rwanda has cooperatives and financial institutions functioning since the 1970s, savings and credit cooperatives have not performed as expected in terms of having an impact on people's lives with the intention of enhancing the wellbeing of its participants, ZCSS was established in 1998. The ZCSS seek to gather funds from its members in order to offer loans to them at a low interest rate. The study's three specific objectives—To assess how risk identification is carried and affect loan performance, to evaluate how risk is assessed, monitored and affect loan performance and to analyze the effectiveness of financial tools for enhancing loan performance and minimizing potential losses at Zigama are designed to help evaluate risk mitigation as a financial tool to improve loan performance. The study adopted a descriptive and correlational research design. Stratified and simple random sampling was utilized to choose the population to be sampled and the individuals for data collection. The research's target population included operational managers, credit officers, finance managers, and loan officers from several Zigama CSS Branches, totaling 41 respondents. Questionnaire was utilized for primary data gathering desirable for the research. Study was conducted in Remera as ZCSS Headquarters, Huye, Karongi, Nyamata and Byumba branches where 5 Point Likert scale questionnaires was adopted. Data was analyzed in form of descriptive and inferential statistics. Because random sampling was utilized to choose the respondent, every participant was given an equal chance of being selected. Questionnaire was used to select primary data and using SPSS Version 27 to analyze data in terms of quantitative method. The study findings regarding to the gender of respondents reveal that, majority of the respondents were male who constituted 82.93% of the total respondents while the female was 17.07%. Research revealed that risk Identification alone has a 21.7% effect on Loan performance at Zigama CSS. Research also revealed that 27.9% of risk assessment had an effect on loan performance at Zigama CSS and Risk monitoring found to have no significant effect on loan performance where findings depicted only 2.9% whereas 97.1% influenced by other factors. The effects for all the three financial tools (risk identification, risk assessment, risk Monitoring) on loan performance was computed to be at an R Squared coefficient of 0.441. It meant that the financial tools accounted for 44.1% of the variation in loan performance could be explained by the three (risk identification, risk assessment, risk Monitoring) belonging to credit risk mitigation. This denotes a low rate of influence that the tools (variables) have on loan performance. the study concluded that Zigama CSS used credit risk mitigation to a very great extent which resulted into not only reduction in default rates among bank clients but also led to significant decrease in level of non-performing loans.
Key words: Risk mitigation, Loan performance, financial tool, Zigama CSS, Loan portfolio, Non-performing loans
Financial Management Impact on Performance Reports in Borrower Multisupplier and Consultancy LTD, Kigali Rwanda
No full textThis study aimed to analyze the impact of financial management on performance reports in Borrower Multisupplier consultancy (BMSC Ltd, Kigali Rwanda). The research uses a descriptive survey design and quantitative method, with 133 employees and 121 sellers as a sample size. Data was collected using structured questionnaires and analyzed using SPSS software version 21. The Cronbach alpha coefficient formula was used for reliability and validity. The results show that quality financial reporting contributes significantly to performance reports, with a high positive correlation between these two factors. The use of ratio analysis is also important, with a high positive correlation between ratio analysis and performance reports. Internal control is also crucial, with a high positive correlation between internal control and performance reports. The ANOVA results show a significant relationship between financial management and performance reports in Borrower Multisupplier and Consultancy Ltd, Kigali Rwanda. The researcher concludes that financial management contributes to performance reports and recommends that companies develop financial management techniques that contribute successfully to their company's performance reports. The findings are presented and interpreted using frequencies and tables. The findings suggest that financial management plays a crucial role in enhancing performance reports and should be considered in the development of financial management strategies for borrower and multisupplier companies.
Keywords: Financial management, Performance reports, Borrower Multisupplier, Consultancy, Rwand
Profitability and Quality of Voluntary Disclosure among Commercial Banks in Kenya
No full textThe banking sector is featured and prioritized as one of the six key drivers of economic growth in Kenya’s Vision 2030 as it plays a central role in mobilizing resources. The bank operations transparency and information disclosure are amongst the key elements of governance as lack of it can gradually weaken the trust of all parties in the bank’s contracts. The specific objectives was to establish the effect of profitability on the quality of voluntary disclosure among Kenyan commercial banks. This study was guided by signalling theory. This study adopted positivistic philosophy and explanatory research design. The study period was between the years 2013- 2020 and 38 out of 41 commercial banks in Kenya licensed by the Central Bank of Kenya as at 2020 were selected as the sample using purposive sampling method. The data was extracted and compiled for evaluation from the financial statements using the document review guide. Descriptive and inferential statistics evaluated the data. Pearson correlation analysis was done to show correlation between variables and a panel regression model was used. The study found that profitability has a significant positive influence on quality of voluntary disclosure of commercial banks. It is recommended that banks should prioritize strategies that enhance their profitability. This is crucial for maintaining financial stability, as higher profitability allows for the accumulation of retained earnings, which in turn act as buffers to absorb potential losses.
Keywords: Profitability, Quality of Voluntary Disclosure & Commercial Bank
Effect of Corporate Social Responsibility on the Financial Performance of Small and Medium Enterprises in Makueni Sub-County
No full textSmall and medium enterprises have a responsibility to generate profits, obey the law, be ethical and be good corporate citizens. These firms use a variety of tactics in an effort to improve their performance. The processes that enable an organization's financial performance are built through CSR. The general objective of this study was to examine the effect of CSR on the financial performance of SMEs in Makueni sub county. The study aimed to assess the impact of CSR economic activities, legal and regulatory frameworks, ethical issues, and philanthropy on the financial performance of SMEs in Makueni Sub County. The study was underpinned by the social capital theory, stakeholders’ theory, dynamic capabilities theory and the agency theory. The study adopted a descriptive research design. The target population was 741 SMEs registered in Makueni Sub County. A sample of 259 was selected for the study. Simple random sampling was used to select SMEs, from the list of SMEs provided by the Makueni County licencing office. Data was gathered through a questionnaire. The Statistical Package for Social Sciences was used to conduct correlation and regression analyses. Findings indicated a positive and significant influence of CSR economic activities on the financial performance of SMEs in Makueni sub county. There is a positive and significant influence of CSR legal & regulatory framework on the financial performance of SMEs in Makueni sub county. The study further found there is a positive and significant influence of CSR ethical issues on the financial performance of SMEs in Makueni sub county. Findings revealed a positive and insignificant association between of CSR philanthropy and financial performance of SMEs in Makueni sub county. The study concluded that businesses that make a conscious effort to maximize their earnings and engage in CSR activities often enjoy a distinct competitive advantage within their respective sectors. The study recommended that SMEs should engage in CSR activities. A robust CSR legal and regulatory framework is essential for businesses to not only operate ethically but also to maintain their financial stability and reputation within their respective industries. It is also recommended that SMEs should adhere to the laws governing the conduct of business. SMEs should ensure that the rights and dignity of their workforce are respected and protected. SMEs should adhere to human rights principles and apply them in their dealings with employees. SMEs should resolve their issues in an ethical way. Ethical conflict resolution methods can prevent prolonged disputes, minimize legal costs, and protect the reputation of the business.
Keywords: Economic activities, legal and regulatory framework, ethical issues, philanthropy, financial performance, SMEs, Keny
Effect of Financial Risk Management Practices on Profitability of Listed Companies in Rwanda: A case of CIMERWA PLC (2020-2022)
No full textThe main objective of the study was to analyze the effect of financial risk management practices on profitability of listed companies in Rwanda with a reference to Cimerwa Plc. The study is based on the following specific objectives to examine the effect of liquidity risk management practices on profitability at Cimerwa Plc; to explore the effect of foreign exchange risk management practices on profitability at Cimerwa Plc and to determine the effect of market risk management practices on profitability at Cimerwa Plc. To achieve these objectives; the study adopted a correlational research design whereby the total population was 224 employees in marketing, production and operations, legal, sales and finance departments. The sample size was 144 respondents selected by stratified sampling technique. Data were collected from both primary and secondary data using a structured questionnaire and documentary reviews. Data were analyzed by descriptive and inferential statistics, presented using frequency tables and percentages, mean and standard deviations as well as regression analyses. The findings confirmed that Cimerwa Plc effectively assesses its liquidity risk exposure (µ=4.0909; STD=0.53936); the liquidity risk management practices at Cimerwa Plc positively influence its profitability (µ=4.1818; STD=0.601442). The foreign exchange risk management tools used by Cimerwa Plc are appropriate in mitigating currency fluctuations (µ=4.4545; STD=0.68755); the Cimerwa Plc's foreign exchange risk management practices contribute positively to its profitability (µ=4.6364; STD=0.50452); Cimerwa Plc actively hedges against foreign exchange risks to protect its profitability (µ=4.0000; STD=1.0000). Cimerwa Plc effectively assesses market risks associated with its operations and investments (µ=4.4545; STD=0.68755); Cimerwa Plc uses financial instruments to hedge against market risks effectively (µ=4.2727; STD=0.78625); Cimerwa Plc actively monitors and manages its exposure to market volatility (µ=4.7273; STD=0.46710). The Cimerwa Plc effectively communicates its market risk management strategies to relevant stakeholders (µ=4.4545; STD=0.68755) and the market risk management practices at Cimerwa Plc adapt well to changing market dynamics (µ=4.6364; STD=0.50452). Regarding the profitability, there were improvement in profitability indicators as the Return on Asset (ROA) changed from 1.7% in 2020 to 3.8% and 11.4% in 2021 and 2022. The Return on Equity (ROE) improved from 3.4% in 2020 to 6.7% and 17.6% in 2021 and 2022 while Net Profit Margin changed from 100% in 2020 due to previous credit taxes to 76% and 78% in 2021 and 2022 respectively and the Earning per Share (EPS) improved from 2.78 in 2020 to 5.86 and 18.74 in 2021 and 2022. These results imply that the profitability indicators in Cimerwa Plc have depicted improving trends in last three years under consideration. Besides, the value of adjusted R squared was 0.608, an indication that there was variation of 60.8% on profitability of Cimerwa Plc due to changes in liquidity risk management practices, foreign exchange risk management practices and market risk management practices at 95% confidence interval. We also recommended that CIMERWA Plc's liquidity risk management practices should be well aligned with industry best practices and the liquidity risk management practices at CIMERWA Plc should be well transparent and well-communicated across the organization
The Role of Transformational Leadership on Digital Innovation and Performance in Large Organizations
No full textTransformational leadership is a leadership style that emphasizes the importance of inspiring and motivating employees to achieve a common goal. The role of transformational leadership on digital innovation in large organizations is critical. Transformational leaders are able to inspire and motivate their employees to embrace the digital innovation process. They are able to create a vision of the future that is compelling and inspiring. This paper sought to determine the role of transformational leadership on digital innovation and performance in large organizations. The paper adopted a desk study review methodology where relevant empirical literature was reviewed to identify main themes. The study was conducted in large organizations. The study finds that role of transformational leadership on digital innovation and performance in large organizations is vital. Transformational leaders have the ability to inspire and motivate their followers to achieve common goals, and this is particularly important in the context of digital innovation and performance. The study concluded that digital innovation has become a critical aspect for large organizations to remain competitive in the rapidly evolving business landscape. As organizations continue to embrace digitalization, there is a growing need for transformational leadership to drive digital innovation initiatives successfully. The study recommends that leaders should develop a clear vision and strategy for digital innovation that is aligned with the organization's overall objectives. This should be clearly communicated to all stakeholders and employees. The leaders should foster a culture of innovation that encourages experimentation, risk-taking, and creativity. This can be achieved by promoting an environment that rewards new ideas and initiatives.
Keywords: Transformational Leadership, Digital Innovation, Performance, Large Organization
Differentiation Strategy and Performance of Fast Moving Consumer Goods (FMCG) Firms. A study of Godrej Consumer Products in India.
No full textDifferentiation strategy is a strategic approach adopted by firms to create unique and distinct offerings in the market. It involves developing and promoting unique features, benefits, and value propositions that set the firm apart from competitors. The success of a differentiation strategy is measured by its impact on the firm's performance indicators such as market share, profitability, and customer loyalty. Effective differentiation enables firms to command premium pricing, attract and retain customers, and gain a competitive advantage. Continuous innovation, brand positioning, customer-centricity, and market research are key elements in implementing a successful differentiation strategy. The study used the descriptive research design. The target population was 40 heads of departments in Godrej Consumer Products firm in India. The study did sampling of 30 respondents that were selected from the target population of 40 heads of departments in Godrej Consumer Products firm in India. The collection of the data was done using questionnaires. The study concluded that GCPL's differentiation strategy has proven effective in creating a distinct identity for their products. The company's emphasis on continuous product innovation and understanding of consumer needs has allowed them to develop unique offerings that cater to specific segments. The ability to command premium pricing, capture market share, and consistently deliver revenue growth and profitability indicates the strength of the differentiation approach. The study recommended that the firm should conduct regular market research and gather consumer insights which will help in identifying emerging trends and unmet needs, allowing GCPL to develop innovative offerings that resonate with target consumers. The company should focus on strengthening product innovation, enhancing brand positioning and communication, expanding regional customization, embracing digital transformation, fostering sustainability, and fostering collaboration and partnerships. This will help in solidifying its market position, attracting and retaining loyal consumers, and navigate the evolving FMCG landscape with success.
Keywords: Differentiation Strategy, Performance, FMCG Firms, Indi
SACCO Refinancing Project and Job Creation in Rwanda: A Case of Business Development Fund in Gasabo District
No full textThe study was composed of four distinct objectives: To examine the effect of loan financing on job creation of beneficiaries of BDF in Gasabo District; to examine the effect of financial literacy on job creation of beneficiaries of BDF in Gasabo District; to find out the effect assets on job creation of beneficiaries of BDF in Gasabo District and to determine the effect of Grants financing on job creation of beneficiaries of BDF in Gasabo District. The study used a survey research design. The target population is 122 SMEs that received services offered by IJABO REMERA SACCO from BDF Rwanda + 2 top managers of BDF concerning the management SACCO Refinancing project while the sample size of this study was 94 small and medium enterprises including 54 micro-businesses; 36 small business; 3 medium business and 1 large business received services offered by BDF Rwanda through IJABO SACCO Remera branch, Gasabo district. The results show that project loan financing has a significant positive influence on job creation in Rwanda as indicated by β1= 0.156, p=0.008<0.05, which means that an increase of one unit in loan financing would lead to an increase in job creation. In addition, financial literacy has a significant positive influence on the Job creation of beneficiaries of BDF in Gasabo District as indicated by β2= 0.336, p=0.000<0.05. For the third objective, assets financing has a significant positive influence on the Job creation of beneficiaries of BDF in Gasabo District as indicated by β3= 0.210, p-value=.001<0.05. For the fourth objective, the findings revealed that grants financing has a significant positive influence on the Job creation of beneficiaries of BDF in Gasabo District as indicated by β4=0.388, p-value=0.000<0.05. The study concludes that 76.3% of the variation in the job creation of beneficiaries of BDF in Gasabo District can be predicted by joint interaction of loan financing; financial literacy; assets financing and grants financing as indicated by Adjusted R squared at 95% confidence interval.
Keywords: SACCO, Refinancing Project, Job Creation, Loan Financing, Financial Literacy, Asset Financing, Grants Financin
Risk Management Methods and Performance of Construction Projects; A Case of Rwanda Education Board School Construction Project in Selected Districts
No full textThe purpose of the study was to assess the effect of risk management methods on the performance of construction projects, with a specific case study of Rwanda Education Board (REB) School Construction projects in selected districts. Construction projects are still facing the problems generated by little knowledge on methods to be applied while managing different types of risks. Those methods include namely, risk avoidance, risk control, risk retention and risk transfer. In order to explore those various types of risks, the study focused on four objectives: to examine the effect of risk avoidance, risk controls, risk retention and risk transfer on REB School construction project in selected Districts. The study focused on Rwanda Education Board construction projects, with a target population of 122. The researcher employed a descriptive research design and used a census technique to purposively select the entire target population of 122 as the study sample. Questionnaires were utilized as the data collection instrument and were distributed to the aforementioned respondents. The collected data was then analyzed using SPSS to calculate the mean, standard deviation, correlation, and conduct multiple regression analysis. The study found that risk avoidance, risk control, risk retention and risk transfer affect construction project. The results further showed a correlation coefficient (r) of 0.853 meaning that two variables were positively, strongly and perfectly correlated. The study concludes that risk management methods significantly influence project performance in terms of time, quality, and budget. Collaboration and information sharing between clients and contractors play a crucial role in project success, with the involvement of education officers and headmasters being essential for support. The research confirms a strong and positive correlation between risk management methods and project performance, as indicated by a Pearson Correlation Coefficient (r) above 0.8. The study recommends that all stakeholders should work closely hands in hands to ensure that risks are minimized or mitigated at the highest attainable rate. Again, all parties involved in the project should make regular sites supervision to check if the contractor is using resources allocated to him/her rationally to avoid excessive cost. Furthermore, all stakeholders should ensure that the construction work is carried out in compliance with the scheduled time and that the material used is genuine. And finally, while selecting the sub-contractor, in case of risk transfer, the client and the contractor have to consult each other in order to hire the consultant with the highest desirable competence. The study recommends that construction projects, particularly those managed by the Rwanda Education Board (REB) in selected districts, prioritize and implement comprehensive risk management strategies
Keywords: Risk Management Methods, Construction Projects, Rwanda Education Board School Construction, District.
 
Impact of Access to Agricultural Credit on Agricultural Productivity in Iowa, USA.
No full textAgriculture is a critical component for nations' growth and development due to its significant contribution to economic growth. Microcredits are designed to assist rural inhabitants in increasing the productivity of their agriculture, so alleviating issues of hunger and poverty. Country's economic development is aided by agricultural productivity in a variety of ways including increasing the domestic food supply, supplying raw materials for industry and opening up new domestic markets. Improving agricultural productivity is important in order to meet the growing demand for food, reducing poverty, and promoting economic growth in rural areas. The study used the descriptive research design. The target population was 180 farmers. The study did sampling of 140 respondents that were selected from the target population of 180 in USA. Questionnaires were used to collect the data. It was concluded that better credit access allows for increased agricultural investment, particularly among small farmers, resulting in increased output and value addition. More access to finance is related to higher agricultural output in the United States. In low-income countries the sector not only creates employment but it also contributes to the GDP. Credit enables poor rural farmers to diversify their economic activities, diversify their sources of capital, and manage the inevitable shocks and stress. The study recommended that credit availability should be increased in order to lead to an improvement in the agricultural productivity in the United States. This will make it possible to embrace new technologies and sophisticated inputs, increase efficiency, and modify the input and product mix in reaction to weather unpredictability, climate change, and/or changes in input and output prices. The rural communities should have access to financial institutions to boost productivity since agriculture is the cornerstone of any significant economic progress in emerging countries.
Keywords: Agricultural Credit, Agricultural Productivity, US