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Relationship between Lending Requirements and Loan Performance of Deposit Taking Savings and Credit Cooperative Societies in Kenya
Full text linkSavings and Credit Cooperative Societies play an important role in providing financial services to many Kenyans. SACCOs have been identified as crucial growth engines in many countries across the world. According to the Sacco Society Regulatory Authority (SASRA) Annual report for 2021, the amount of NPLs increased from Kes 25.79 billion in 2019 to Kes 39.86 billion in 2020. The goal of this study was to determine the relationship between lending requirements and loan performance of deposit-taking SACCOs in Kenya. The anchoring theory was credit default theory. The study used a causal approach research design with a target population of the study 11 SACCOs in Meru County selected using purposive sampling. Results showed that revealed a strong and positive relationship between the lending requirement and loan performance. The study concluded that lending requirements and loan performance are positively and significantly correlated. The study recommends that DT-SACCOs should have a credit risk management policy that guarantees loan repayment, accurate estimation of loan defaults, and suitable mitigation measures
Electronic Taxpayer Education and Tax Compliance of Manufacturing Small and Medium Enterprises in Nairobi City County, Kenya
Full text linkTo enlighten taxpayers regarding their tax information, the Kenyan tax authorities have made tax education a top concern. To promote voluntary tax compliance and boost national revenue, this kind of education is essential. Low tax compliance among SMEs limits revenue generation from the government and, consequently, inefficient government expenditure since it makes it harder for the state to amass family earnings, which are vital assets for speculating. This study sought to investigate how electronic taxpayer education affects the compliance with tax laws of manufacturing SMEs in Nairobi City County, Kenya. The study used a descriptive research approach and 641 manufacturing SMEs in Nairobi were the study\u27s targeted audience. Output showed that electronic taxpayer education positively affected tax compliance in a significant manner as it relates to manufacturing SMEs. The conclusion arising from this outcome is that electronic taxpayer education plays an important role in manufacturing SMEs\u27 tax compliance as most of them can access tax information electronically in their comfort zones. Policy makers should increase the utilization of electronic means to educate taxpayers on the need to pay taxes and the consequences of non-compliance to tax laws in Kenya. It is recommended that the Kenya tax authority should enhance the education of taxpayers via electronic means as most of the participants in the manufacturing SMEs are said to easily access electronic media that would enhance their competitive advantage over other firms in Kenya
Policy Framework and Financial Corporate Compliance in Public Universities in Kenya
Full text linkOne of the important components of corporate governance that improves accountability and transparency in an institution\u27s financial management is financial corporate compliance. The emergence of alarming cases of financial impropriety in Kenya\u27s public universities has intensified the demand for financial accountability in the public sector and exposed the boards and management to increasing scrutiny. Public organizations have reported cases of inadequate or absence of financial compliance, and public universities have also cited comparable circumstances in audit reports. It is unclear, however, what the causes of this compliance are or what function corporate governance plays in it. The purpose of this study was to explore the effect of policy framework on financial corporate compliance at Kenya\u27s public universities. The study adopted a descriptive survey research design. The study\u27s target population was 40 accredited public universities in Kenya. The data were gathered through the use of extensive, quasi-structured questionnaires. The study used descriptive statistics such as frequency distribution tables, percentages, and measures of central tendency such as the mean. Chi-square and correlation analysis were used to establish the relationship between the study variables. The study reached a finding that policy framework has a positive impact on prudential corporate compliance during the period of study. The study found that most universities have adopted ethics and a code of conduct that the universities operate under a specific code of conduct and ethics which enables the university to actualize financial corporate compliance. The study recommends all public universities to be keeping track of all activities required to be adhered to by the public institution finance department more regularly to ensure the smooth running of the institutions. It is also recommended the university management facilitate regular training for the officers in the finance department to equip them with the relevant information of the newly amended policies by the government to govern the finances used to run public universities
Influence of Supplier Capacity on the Performance of State Corporations in Kenya
Full text linkThe purpose of this study was to determine the influence of supplier capacity on the performance of state corporations in Kenya. The study adopted a cross-sectional survey design using both quantitative and qualitative approaches. The target population included 187 state corporations in Kenya. The study applied a census approach. Primary data was collected using questionnaires. Descriptive statistics were used to compute percentages of respondents’ answers. Inferential statistics using linear regression and correlation analysis were applied to establish the relationship between the research variables. The results indicated there was a positive and significant relationship between supplier capacity and performance of state corporations in Kenya. The study concluded that supplier capacity had a significant and positive influence on the performance of state corporations in Kenya. Based on the findings, the study recommended the need for suppliers to enhance their capacity to meet the expectations of their customers. Some of the criteria that firms can use to assess their suppliers are technological level, which involves a general assessment of the supplier’s capability in terms of innovation and technology. Further, the study recommended that state corporations’ managers should ensure that all their suppliers adopt modern technology and this will help them improve their capacity performance
Institutional Framework and Financial Corporate Compliance in Public Universities in Kenya
Full text linkOne of the important components of corporate governance that improves accountability and transparency in an institution\u27s financial management is financial corporate compliance. The emergence of alarming cases of financial impropriety in Kenya\u27s public universities has intensified the demand for financial accountability in the public sector and exposed the boards and management to increasing scrutiny. Public organizations have reported cases of inadequate or absence of financial compliance, and public universities have also cited comparable circumstances in audit reports. It is unclear, however, what the causes of this compliance are or what function corporate governance plays in it. The purpose of this study was to determine the effect of the institutional framework on financial corporate compliance at Kenya\u27s public universities. The study adopted a descriptive survey research design. The study\u27s target population was 40 accredited public universities in Kenya. The data were gathered through the use of extensive, quasi-structured questionnaires. The study used descriptive statistics such as frequency distribution tables, percentages, and measures of central tendency such as the mean. Chi-square and correlation analysis were used to establish the relationship between the study variables. The results of the study showed that institutional framework has a positive impact on financial corporation compliance. This illustrated that institutional framework had a compelling impact on financial corporate compliance. This study recommends that the government should employ thorough accountability measures and policies that will make every officer in public universities be held responsible for every activity he/she has undertaken on behalf of the university that may lead the university to incur some expenditures
Financial Management Practices and Quality of Financial Governance of Nairobi City County Government, Kenya
Full text linkThe financial statement Auditor General report of Nairobi County Government has had unfavorable audit opinions since the establishment of County Government in 2013. An unfavorable opinion means the auditor has gathered sufficient audit evidence and concluded that the financial statements include material and extensive inaccuracies. This study sought to investigate the effect of financial management practices on quality of financial governance in Nairobi City County Government, Kenya. The study\u27s target population was 425 employees of Nairobi City County Government\u27s finance and economic planning division. Using a stratified random sampling technique, a sample of 85 employees was chosen. Data was analyzed using descriptive and inferential statistics. Results revealed that revenue mobilization strategy, budgetary techniques, financial reporting, and integrated financial management system had a positive and significant influence on quality of financial governance. The study recommended that counties and other local governments should ensure there is sufficient revenue administration and mobilization policies, budgeting, and financial reporting policies as well as proper utilization of integrated financial management system to achieve quality financial governance
Liquidity Adequacy and Financial Performance of Commercial Banks in South Sudan
Full text linkCommercial banks in South Sudan have shown deteriorating financial performance in the period 2017 to 2021. This has been shown by the substantial number of commercial banks making losses and with the profit-making ones exhibiting fluctuating performance as well as reducing financial performance levels. For example, only 25% of the commercial banks made a profit in the year 2021 with the majority making losses. Further, the sector has made losses for the last five years. For example, Liberty Commercial Bank recorded a decline in ROA from 0.58 in 2018 to 0.53 in 2019 and a further decline to 0.51 in the year 2020. If nothing is done to improve South Sudan\u27s commercial banks\u27 financial performance, then the contribution of the banks to the country’s welfare will be watered down. The primary aim of this study was to determine the effect of liquidity adequacy and the financial performance of commercial banks in South Sudan. An explanatory research design was used in the study. The target populace was commercial banks in South Sudan. 29 commercial banks existed in South Sudan between 2017 and 2021. The study used purposive sampling to sample 23 banks that were in operation between 2017 and 2021. Secondary information was used in the study. For analysis, the obtained information was cleaned and imported into STATA 17. Descriptive statistics and regression analysis were conducted. The inferential statistics used were correlation and regression. The outcomes further showed that the mean of liquidity adequacy from 2017 to 2021 for the commercial banks in South Sudan was 3.178, with the least liquidity adequacy being -0.068 and the most being 64.297. Trend outcomes were clear that liquidity adequacy was increasing amongst South Sudan commercial banks. Regression outcomes were clear that operational adequacy was positive and significantly impacted by the performance. The study notes that though liquid assets attract some returns to commercial banks, too much of it depletes the profitability level of banks. Because highly liquid assets are linked to lower returns than riskier assets, the study advises banks to avoid keeping excessive amounts of liquid assets. Therefore, owning too many liquid assets has a greater opportunity cost than benefit. Consequently, it is advised to have the ideal ratio of liquid assets to total assets. Furthermore, during times of weak economic conditions, the report advises banks to keep a greater proportion of liquid assets. Therefore, it is advised that bank management provide liquidity management with the necessary consideration
Exploration of Cash Flow Management Strategy and Financial Performance of Saccos in Imenti North Sub-County, Kenya
Full text linkThe study sought to explore the influence of cash flow management strategy on financial performance of Saccos in Imenti North Sub-County, Kenya. Descriptive research design was adopted to collect data from 21 deposit and non-deposit Saccos located in Imenti North Sub-County. The target respondents included 42 accounts department officers, 114 tellers, 93 back-office staff, and 120 loan officers hence a total of 369 respondents. Descriptive and inferential statistics were used to analyze the data. Cash flow management strategy had a correlation coefficient r=0.772** at α < 0.000 and a 99% significance level. The study established that the investment department was still undeveloped in many Saccos therefore limiting on the authorization of incorporation of funds in investment options like capital markets. This limited the Saccos to act as mere institutions of accepting deposits and savings, while at the same time issuing loans. This method of operation at many times did not guarantee consistent income due to competition from other financial institutions doing similar work. The study thus recommends that the Board of Management [BOM] should create policies and provide adequate funds to establish an investment department, if there is none, or strengthen it if in existence. The contribution to the study is that a quality policy structure would introduce the Saccos to endless opportunities in investment at capital markets which has a well-structured and managed fund portfolio. In return, this would improve the income since the operations of the Saccos would have been diversified spreading into various classes of investments available
Bank Characteristics and Financial Performance of Commercial Banks Listed at The Nairobi Securities Exchange in Kenya
Full text linkCommercial banks in Kenya have recently experienced a steady downturn in their financial performance, mostly as a result of strict regulatory requirements and a changing business environment. The subpar financial performance of numerous lower-tier banks has resulted in significant consequences, including the necessity of placing some of these banks under receivership. The purpose of this study was to look into how various factors influence the financial performance of commercial banks listed on the Nairobi Securities market. In particular, this study looked to see how financial performance was impacted by asset quality and liquidity management. The study employed a descriptive methodology and a target population comprised of 11 commercial banks listed on the NSE were included in the population sample for this study. Secondary data was collected and analyzed using descriptive and inferential statistics. The research exhibited that the financial performance of commercial banks is significantly influenced by quality of their assets. Furthermore, the study revealed a positive and statistically significant impact of liquidity on the financial performance of Kenyan commercial banks The study concluded that financial performance was substantially and positively impacted by the quality of assets and liquidity management practices. Consequently, it is recommended that banks maintain a low level of nonperforming loans, as these loans have adverse effects on bank profitability, which in turn affects overall financial performance. Although the statutory ratio is established at 20%, the central bank might think about increasing this ratio by taking into account the general growth of the banking industry in recent years
Working Capital Management and Financial Performance of Deposit Taking Savings and Credit Cooperative Societies in Central Region, Kenya
Full text linkThe goal of the investigation was to determine the effect of management of working capital on the financial performance of deposit-taking SACCOs in Central Region, Kenya. The investigation sought the impact of accounts receivable, accounts payable management, and cash management on performance. The theoretical literature review concentrated on conversion Cycle Theory, agency theory, transaction cost theory, and pecking order theory. The study adopted a causal research design. In this investigation, 27 DT SACCOs in Central Region, Kenya were the target population. Due to small and manageable size of the SACCOs, the study used a census. Five years of secondary data was collected (2017- 2021). The data was analyzed using descriptive, trend analysis and panel regression. The investigation indicated that cash management had a progressive and noteworthy coefficient of (β was 0.219, p was 0.000). The findings further confirms that accounts receivable management had a progressive and noteworthy influence on financial success of the SACCOs (β was 0.005, p=0.002). Further, accounts payable management had a negative and unworthy effect on financial success of the SACCOs (β was -0.004, p was 0.081). Government and the Ministry of Cooperatives could create policies that are fit for the execution of cash management and accounts receivable practices in SACCOs. This will enhance efficiency and uniformity in the adoption and use of working capital practices in SACCOs. SACCOs should invest more in cash management practices since it had the highest impact on financial performance. Also, the report suggests that SACCOs establish a norm of standard liquidity place to lower the risk of losses due to excess cash at the workplace, which could arm the performance of SMEs. However, SACCOs should not emphasize accounts payable since it did not affect their financial performance