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Effect Of Loan Products On Asset Quality Of Commercial Banks In Kenya
No full textThe lending function is considered as the most important function of any commercial bank,
since most of the banks’ earnings are generated from interest income. In the past, large number
of non-performing loans had contributed quite significantly to low profits in Kenyan banks.
Banks are now reviewing their lending portfolios using the laid down criteria such as credit
modeling by Basel Committee on Banking Supervision. This study examined the effect of loan
products on asset quality of commercial banks in Kenya. The specific objectives determined the
effect of commercial loans, asset financing, vendor financing and real estate loans on asset
quality of commercial banks. Agency theory, theory of information asymmetry and Loanable
funds Theory informed the study. The study adopted a descriptive research design approach
where the target population included the 41 commercial banks for the period 2015-2019. The
study used secondary data that was extracted from the websites of the respective commercial
banks. The study used panel regression analytical model. This study conducted serial correlation
tests, heteroscedasticity tests and multicollinearity test to evaluate the data collected before the
actual analysis. The results indicated a positive and significant relationship between commercial
loans and the asset quality of commercial banks (β= 0.071, p=0.030). Further, there was a
positive and significant relationship between asset financing loans and asset quality of
commercial banks (β= 0.144, p= 0.000). Vendor financing loans had a positive and significant
relationship with asset quality of commercial banks (β= 0.076, p= 0.025). Lastly, real estate
loans revealed a positive and significant relationship with asset quality of commercial banks (β=
0.151, p= 0.000). The study concluded that commercial loans, asset financing, vendor financing
and real estate loans affected asset quality of commercial banks in a positive and significant way.
The study recommended that the commercial bank should focus on reducing the level of non-
performing loans because when diversifying the loan portfolio where there is a high credit risk.
The study recommended that the commercial bank to be sure that the collateral is protected and
will not deteriorate, this costs the bank money. Lastly, the study recommended banks should
develop comprehensive strategic plans detailing on how they will deal with non-performing
loans in their occurrence in a systematic way
Determinants Of Service Delivery In The National Police Service In Nairobi County, Kenya
No full textIn the recent past the general public has remonstrated on the service delivery of the police occasioned by the numerous protests on police corruption, extra- judicial killing and non responsive to increased crime. Despite the reforms proposed by the Waki and Philip Ransley Taskforce occasioned by the Post-Election Violence of 2009 not much significant difference in service delivery had been realized. Citizen’s perceptions had significantly reduced for the last five years, despite the government having invested in improving police equipment for detecting and fighting crime this did not translate to improved service delivery to the citizens. The overall security situation in the prefecture continues to deteriorate and there are still widespread crime rates across the country, resulting in the renewal of law and order and a decrease in public confidence. It is upon this background that this study assessed how Police Training, Police Leadership, nonmonetary rewards, monetary rewards influenced quality police service delivery. The study utilized descriptive research design. Data was cleaned and preliminary analysis performed to aid in the decision of choosing test statistics which were performed. Data analysis results established that police training and non-monetary rewards had a significant positive (sig. p=0.000, p= 0.000) relationship with service delivery. Conversely, there was insignificant positive relationship (sig. p = 0.09 and p= 0.378) respectively between monetary and police leadership and service delivery. Finally, on average, the level of service delivery in the absence of any predictor variables was found to be 0.081. Therefore, the study recommends that the Kenya police service should conduct regular training to impact the police officers with the relevant knowledge on the use of modern technology and skills on situation response, strategic patrolling, firearm proficiency skills, first responder in an active shooter situation, risk and crisis intervention analysis, crowd control skills and administrative courses. It further recommends that police commanders should create awareness on police mission and vision to all police officers through workshop and seminars to provide the police officers with a clear and effective guide for making decisions, hold them accountable for their actions to avoid cases of misuse of power and improper use of fire arm. Counselling and Psychosocial is key in ensuring quality service delivery, this can be actualized by setting up a counseling unit to help officers experiencing stress and trauma in the line of duty to maintain psychological well-being and perform their duties more efficiently. Exemplary performance, dedication and selfless service should be recognized and appreciated in order to increase in performance, productivity, morale, retention and overall satisfaction. The National police service should ensure that the officers’’ pension is promptly paid, medical cover is comprehensive, workplace injury benefits to the police officers who get injured while carrying out their duties are expedited in order to increase their committed in fight against crime in the Country and overall increase in quality service delivery to the citizenry
A Review Of Innovative Sources Of Funding Blue Economy In Africa
No full textThis study aimed at reviewing innovative sources of funding blue economy in Africa. The study was guided by two
theories: economic theory and market efficiency theory of innovation. The study reviewed selected innovative sources
of funding blue economy namely, Blended Finance, Blue bonds, Development impact bonds, Debt swaps,
Crowdsourcing-Diaspora financing, and contingently recoverable grants. Qualitative desk review from research
papers, journal articles, textbooks and the websites were used in the study. The study recommends that there is need
to strengthen the ocean governance and the knowledge and capacity of those living around the coastal environment
and the authorities that are tasked with ensuring the preservation of the oceanic resources. Additionally, exploration
of the limited oceanic resources requires a coordinated effort from players in both the public and private sectors. This
will ensure the availability of innovative and sustainable financing initiatives that will go a long way into ensuring
that the potentials of this resource are channeled into economic development
Effect Of Selected Firm Characteristics On Financial Performance Of Commercial Banks In Kenya
Get PDFCommercial banks operate in a turbulent business environment and this calls for an
understanding of their internal and external factors to enable them to increase their financial
performance. This study’s objective was to examine the influence of selected firm
characteristics on financial performance of commercial banks in Kenya. Precisely, the study
sought to establish the influence of capital adequacy, board composition, management
efficiency and working capital on financial performance of commercial banks in Kenya. The
study was anchored on the buffer theory of capital adequacy, agency theory, performance
theory and the liquidity-profitability trade-off theory. The study was carried out using a
longitudinal design. The 42 commercial banks operating in Kenya by December 2019 were
the study population. Secondary data from 2015-2019 was collected from Central Bank of
Kenya’s yearly banking surveys, and the commercial banks’ financial statements. To analyse
the collected data, the study applied the panel data regression model. The appropriate
diagnostic tests were conducted before and after fitting of the model. The study findings
established that capital adequacy had a significant and negative influence on financial
performance measured through ROA (β = -0.3186, t = -5.43, p < 0.05), but had no significant
influence on financial performance measured through ROE (β = 0.4091, t = 1.29, p = 0.200).
The study also determined that board composition had no significant effect on the financial
performance of the commercial banks as indicated by ROA (β = -0.2555, t = -0.11, p = 0.91)
and ROE (β = -1.64, t = -0.13, p = 0.893). Moreover, the study findings determined that
management efficiency had a significant and negative influence on financial performance
measured through ROA (β = -0.2105, t = -11.43, p < 0.05) and ROE (β = -0.9342, t = -9.37, p
< 0.05). The findings also established that working capital had no significant effect on the
financial performance of the commercial banks as indicated by ROA (β = -0.7792, t = -1.01,
p = 0.312) but had a significant and negative influence on the financial performance of the
commercial banks as indicated by ROE (β = -8.3384, t = -2.00, p =0.047). The research offers
the following recommendations based on its findings. First, the study recommends to Central
bank of Kenya to be vigilant to ensure that the minimum CAR for commercial banks in
Kenya is met by all banks. Regarding management efficiency, the study recommends to
commercial banks in Kenya to have a suitable and organized policy framework to guarantee
financial management efficiency. Lastly, the study recommends to commercial banks to
carefully balance their working capital to balance the risk and returns that come from holding
liquid assets and current liabilities
The Influence Of Macro Economic Factors On The Stock Market Performance In Kenya
Get PDFThe study sought to analyze the influence of macroeconomic factors on stock market
performance in Kenya. The macroeconomic factors of interest in this study include interest rates,
money supply, economic growth and net capital flow. The study was anchored on the Flow
oriented theory, the monetarist model and the efficient market hypothesis. The study targets all
the firms listed in the Nairobi Securities Exchange (NSE). The study used secondary data which
was sourced from the Central Bank of Kenya (CBK) and Kenya National Bureau of Statistics
(KNBS). Data was analyzed using STATA using time series methods. The characteristics of the
data were determined using exploratory time series analysis. Trend analysis was also done on all
the variables in order to ascertain the behavior across the time period. This was achieved through
line plots. The appropriate time series model for the data was Autoregressive-Distributed Lag
(ARDL). This was used to determine the relationship between macroeconomic variables and
NSE performance. Post estimation tests were done to determine how the model used is effective
in explaining the relationship between variables in the study. This was achieved using the
Granger Causality test. Based on the study findings, the study concludes that the macroeconomic
environment in the country over the study period have been changing greatly. There were huge
variations in the interest rates, exchange rates, and BOP. Based on the granger causality test, the
study concludes that interest rates granger cause NSE performance, hence, the interest changes
can be used to forecast changes in the NSE performance. Changes in the interest rates is
therefore a key factor used by investors in making investment decisions when buying stocks in
the NSE. The granger causality test also found out that exchange rates granger causes the NSE
performance. This implies that investors in the stock market can base their decision on the
exchange rates. From ARDL model, there was a statistically significant relationship between
exchange rates and NSE performance. Specifically, the study concludes that exchange rates
significantly influence the NSE performance in that an increase in exchange rates leads to a
decline in the NSE performance. This means that an increase in the exchange rates reduces
foreign participation in the NSE. This is likely to lower the returns and hence a low NSE index.
A stable currency is thus crucial as it helps to maintain market vibrancy as trading continues.
When market volatility is high, the risks are high since it is hard for investors to approximate
precisely the future direction of their investments. This discourages investment and hence low
NSE index. Regarding the influence of net cash flow on the NSE performance, the study
concludes that changes in the BOP influence the stock market performance. This implies that,
when making decisions on whether to invest in the NSE, investors consider the net capital flow.
The findings imply that an increase in the BOP causes the stock market returns to increase which
indicates the listed companies get the capability to expand productions and increase sales. This
leads to increased sectors earnings for firms which results in better dividend payments for firms
leading to an increase in the stock market shares. Generally, the study concludes that interest
rates, exchange rates, and BOP influence the NSE performance and can be used to predict the
NSE performance. There was a strong and significant relationship between all the
macroeconomic factors and the NSE performance. This implies that the macroeconomic
environment in Kenya is a key determinant of business activities including the performance of
equity markets
Effect Of Short-term Financing Decisions On Firm Value Of Non-financial Firms Listed On The Nairobi Securities Exchange, Kenya
No full textFirm value and its creation are some of the main goals of corporate entities. Firm value, unlike profitability firm value is more holistic and views at sustainable institutions. A host of non-non-financial listed firms have in the recent times faced financial turbulence and this has impacted on their value. The firms include Mumias Sugar, ARM Mining, Nairobi Business Ventures, among others. Resulting to decline in performance of this firms is drop in their share prices and this have affected their value. In this in mind, this study sought to determine the effect of short-term financing decisions on firm value of non-financial firms listed on the Nairobi Securities Exchange, Kenya. Specifically, the study sought to: examine the effects of cash management on firm value of non-financial firms listed on the Nairobi Securities Exchange, Kenya; determine the effects of receivables management on firm value of non financial firms listed on the Nairobi Securities Exchange, Kenya; examine the effects of payables management on firm value of non-financial firms listed on the Nairobi Securities Exchange, Kenya and establish the effects of inventory management on firm value of non financial firms listed on the Nairobi Securities Exchange, Kenya. Based on the specific objectives, four corresponding hypotheses were formulated and tested. Four theories, the pecking order theory, the trade-off theory, the financing theory and liquidity theory anchored the study. The study adopted quantitative research design and employed panel data regression methodology. The study targeted all the non-financial firms listed and trading at the Nairobi securities exchange over for the period 2010 to 2019. The study adopted census and targeted all 44 non-financial firms that were listed as of December 2020. However, due to data concerns, only 28 firms were studied. The study used secondary panel data obtained from published financial statements of each firm. Hausman specification tests determined that Random effects generalized least square method was appropriate. Prior to data analysis, diagnostic tests were carried out to ensure non violation of the classical linear assumptions. Amongst the diagnostic tests undertaken were the multi collinearity tests; normality tests; homoscedasticity test and auto correlation tests. Descriptive statics inform of mean, standard deviation, minimum and maximum values was presented. Results of the study indicated that inventory management had a positive and statistically significant association with firm value both individually and jointly with other variables. Payable management, independently and also with other variables was also found to have a positive and statistically significant effect on firm value. On its own, receivables management was found to have a positive and statistically significant association with firm value. Jointly with other variables, receivables management was found to have an insignificant effect on firm value. Cash management, according to the findings of the study, had a positive but statistically not significant effect on firm value both individually and jointly with other variables. The study makes recommendations to policy makers to legislate on firm value reporting. Further, it recommends to management of the listed firms to ensure a clear understanding on how different short term financing decisions impacts on firm value
The Effect Of Employee Involvement On Performance In Commercial Banks In Nairobi County, Kenya
Get PDFThe more autocratic management is threatened by employee involvement in decision-making.
Furthermore, failing to respond to employee compliments is an example of how failure to do so
decreases employee involvement in decision-making. Commercial banks in Kenya still lack the
required structures to properly conduct their businesses, owing to a lack of involvement of bank
employees, or at the very least their employee representatives, in decision-making processes.
Therefore, the present study aimed at determining how employee involvement affects employee
performance in commercial banks in Nairobi County, Kenya. The study specific focus was to
examine the effect of employee delegation, employee consultation, employee collective decision
making and job enrichment on the performance in commercial banks in Nairobi County, Kenya.
The study was anchored by human capital theory, human resource management theory,
administrative management theory and goal interdependence theory. The descriptive survey
research design was used in this investigation. The commercial banks in Kenya were the study's
target population, and three banks were involved that included; Kenya Commercial bank,
Cooperative Bank and Barclays bank in Nairobi City County. The respondents were employees
from these selected banks who were 569 in total number. To ensure that all instances are
represented, a stratified sampling method was employed to sample respondents as per their
departments. The respondents were chosen using a simple random selection procedure. A total of
235 respondents were sampled. For the objective of gathering primary data, questionnaires were
employed. The questionnaires were piloted to 14 respondents. The validity and reliability of the
questionnaires were tested by conducting a pilot study. Analyis of data in quantitative form was
done using descriptive analysis. In addition, inferential analysis constituting of analysis of multiple
regressions was done to assess how one variable influences the other. Presentation of the results
was by tables and figures. The study established that employee delegation, employee consultation,
employee collective decision making and job enrichment had a positive and significant influence
on employee performance in commercial banks in Nairobi County, Kenya. According to the study,
deployment allows managers to focus on more important tasks or better-qualified jobs, and
extended time reduces stress and strain. Employee consultation is a rewarding and constructive
activity that promotes understanding and problem-solving between managers and sub-employees
in the bank. Involving employees in decision-making is a sure way to make them feel important
and develop character. Enrichment is a method used by bank management to motivate employees
and provide job satisfaction, as well as to address the problem of declining employee motivation
and happiness in the workplace. According to the study, commercial bank managers should choose
tasks to delegate based on employees' skills, preferences, and availability, and explain why this
task is important to them. To the greatest extent possible, consultation should take place prior to
making decisions on issues affecting the legitimate interests of the other party. The manager can
reduce misunderstandings and help team members focus on their analysis, discussions and
discussions by highlighting the magnitude of the decision, including its importance. Create a
working environment in which group members can communicate in a meaningful, honest, and
open manner. The bank's management should assign tasks to employees who do not normally
perform them, or make teams collaborate with other teams on projects to allow employees to gain
new skills
Impact Of Incremental Infrastructure On Economic Development Of County Governments In Kenya
No full textInvestments are essential for the efficient functioning of the economy. The need for a large part of government investment stems from the fact that some goods and services cannot be provided at all by a market economy and some may not be provided adequately. This has aroused the interest of many economists in determining the extent to which infrastructure development affects economic performance. The people of Kenya clamored for a new constitution to promote equitable distribution of national resources and end development inequality between regions of the country. With the onset of devolution in 2013, Counties embarked on infrastructure development of roads, waterworks, public health facilities, affordable housing among other projects to spur pecuniary progress. The aim of the study was to examine the effects of incremental infrastructure on the economic development of County governments in Kenya. The study was based mainly on the fact that huge investments have been made in infrastructure, and it is important to assess the influence of infrastructure investments on the economic advancement of Kenyan Counties. The study’s data was collected from the 47 Kenyan between 2015 and 2018. Data was analyzed using descriptive statistical tools statistics, correlation and the Prais-Winsten regression analysis. The findings revealed that transport infrastructure, water and sanitation infrastructure and social infrastructure had significant and positive correlation with economic development of county governments in Kenya. Regression findings revealed that transport infrastructure had a positive (B=0.0276746) but insignificant (P value = 0.707>0.05) relationship with economic development (GCP) county governments in Kenya. The finding also revealed water and sanitation infrastructure had a positive (B=0.0547272) and significant (Pvalue=0.022<0.05) relationship with economic development (GCP) county governments in Kenya. Lastly, the findings indicate that social infrastructure had a positive (B=0.0877086) and significant (P-value=0.013<0.05) relationship with economic development (GCP) county governments in Kenya. The study concluded that water and sanitation infrastructure and social infrastructure positively and significantly affected economic development (GCP) county governments in Kenya. The study recommended that county governments should allocate more resources to transport, water and sanitation as well as social infrastructures in order to enhance the counties economic development. The study also recommended an additional research on the effect of other type of infrastructures apart from transport, water and sanitation and social infrastructures to determine their effects on counties economic development. But of concern to Kenyans is the issue of overreliance by County government on National government to finance county functions. Despite ICT Policies and other reforms put in place by the Central Government to improve the capability of devolved units to transfer and exchange information, making them more accessible to citizens and to improve service provision, promote productivity among public servants; encourage participation of citizens in government; and to empower all Kenyans in line with development priorities outlined in the Vision 2030. The report for the year 2015 from Commission on Revenue Allocation revealed worrisome trends especially for the marginalized areas. Most of the marginalized counties collected Revenues which was less than four percent of their total budgets hence we may not achieve Vision 2030 priorities. Most of these Counties are facing a number of challenges in realizing their mandate. The challenges included: delivery of infrastructure and health services, financial management, human resource capacity and managing rapid population growth. These challenges had resulted in poor service provision and management and many analysts had criticized the capacity of Counties to deliver on their mandate. Because of inability of the counties to collect revenues optimally this study recommend that central government increase the county funding to 35% and above
Effects Of Working Capital Management On The Growth Of Manufacturing Companies Listed At The Nairobi Securities Exchange
No full textManufacturing industry is one of the key pillars of economic development in Kenya. The purpose of the study is to find the effects of working capital management on the growth of manufacturing companies listed at the Nairobi Securities Exchange. Specifically, the study sought to establish the effects of inventory conversion cycle, payable conversion cycle, receivable conversion cycle and cash conversion cycle on the growth of manufacturing companies listed at the NSE. The study applied a historical longitudinal research design. This research targeted manufacturing companies listed at the NSE and collected data for 10 years from 2011 to 2020. The data was sourced from NSE website, and audited financial statements of the manufacturing companies under study. The data collected was analyzed through a panel data regression model (fixed effects) after conducting diagnostic tests that included Hausman specification test, test of multicollinearity, test of serial correlation, heteroscedasticity tests and test of normality of errors. The findings determined that inventory conversion cycle had a statistically significant and negative influence on the growth of manufacturing companies listed at the NSE (β= -0.0446, p = 0.003). Moreover, the study findings determined that payable conversion cycle had a statistically significant and negative influence on the growth of manufacturing companies listed on the NSE (β= -0.0503, p = 0.001). The receivables conversion cycle had no statistically significant influence on the growth of manufacturing companies listed on the NSE. Study findings further determined that cash conversion cycle had a negative and statistically significant influence on the growth of manufacturing companies listed on the NSE (β= -0.0496, p = 0.005). The study makes the following recommendations based on the study's findings. First, modern and automated inventory management practices, such as ABC analysis and just-in-time, should also be implemented by management. Secondly, management should consider taking early payment incentives and simplifying the payables management function to improve payables conversion cycle. Finally, the study recommends to management to adopt and implement effective internal controls that address specific aspects of cash collection cycle such as average length of account receivables, write-offs for uncollected receivables, and credit line management
The Influence Of Transformational Leadership Style On Covid19 Crisis Management In County Government Of Machakos
No full textThe aim of this research was to determine the influence of transformational leadership style on Covid-19 crisis management in Machakos County. The main objective of the research was to investigate the influence of transformational leadership style crisis management. This research will be significant to the government both at national and county level, organizational workers and future researchers. The study was anchored on four main theories namely; transformational theory, resource based view, contingency theory and upper echelon theory. Transformational theory explains that leaders and followers should advance organizational goals at the expense of personal interests. A leader should focus on member’s needs and input in order to effectuate reforms. On the other hand, resource based view suggests that due to dynamic business environment, organizations can achieve competitive advantage by exploiting its strategic resources. According to contingency theory, leadership effectiveness is influenced by the interaction between the leader's personal characteristics as well as the circumstances. Lastly, upper echelon theory explains that top manager’s perception of their organizations environment influences decisions they make that eventually hinder their performance. In addition, the study used a descriptive research design because it enabled the researcher to establish the status of the research phenomenon. The target population comprised of ten hospitals with sub groups drawn from Doctors, Nurses, Clinicians, human resource managers and disaster management officers making a total of 300 respondents. The study used a sample of 90 respondents through stratified sampling technique. Questionnaires were administered to collect useful data for analysis. Finally, data was analyzed using Statistical Program for Social Sciences and results presented in terms of percentages, frequencies, mean and standard deviation. The research discovered a significant positive association between inspirational motivation, intellectual stimulation, idealized influence and individualized consideration with covid-19 crisis management in Machakos County. Regression analysis found that the collective usage of transformational leadership style was responsible for 81.6 percent of the variations in covid-19 crisis management in Machakos County. The study concludes that transformational leadership style is critical in managing crisis such as Covid-19. It is therefore recommended that counties that are yet to adopt transformational leadership style should adopt as this will go a long way in crisis management. It is also suggested that policy makers should develop sound policies to guide counties when adopting leadership styles