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Arima Models For Forecasting Own Source Revenue For The County Of Machakos
No full textFiscal stresses have created a need for County Governments in Kenya to use accurate Own Source Revenue figures
in budgeting for good economic planning. This is because they are faced with unlimited demands from taxpayers
coupled with limited tax or revenue resources. Counties have not adopted a formal any quantitative forecasting
technique leading to forecasting errors and disruption in government services. Therefore, forecasting is becoming
increasingly relevant and essential in the context of county governments in Kenya. Forecasting is not only a legal
requirement, but an essential tool for fiscal planning. This study therefore aims at developing an autoregressive
integrated moving average model and using it to forecast own source revenue for the County Government of
Machakos and then comparing the forecast results with prediction generated using the expert judgment approach
which is the current in-house forecasting technique in the county. The findings show that the auto-regressive
integrated moving average method generated forecasts with a higher level of accuracy than those generate through
the expert judgment approach. This study uses own source revenue data from the financial year 2013/2014 to
2019/2020 while the mean absolute percentage error is used as the measure of accuracy. This study recommends
adoption the Auto-regressive Integrated Moving Average models for forecasting of Own Source Revenue for
Machakos County
Effect Of Financial Risk On Financial Performance Of Deposit Taking Saccos In Nairobi County, Kenya
No full textWith the continuous aggressive and dynamic competitive environment increment, companies are experiencing financial risk from a multi-dimensional problem. Failure to identify the financial risk will lead to poor performance of an enterprise. Financial risk usually emanates in the process of financial activities, accumulation, and amplification, which finally leads to financial crisis and the inherent collapse of a business enterprise where it ceases being a going concern. The general objective of this research was to determine the effect of financial risk on the financial performance of DT-SACCOs in Nairobi County, Kenya. Specifically, the study aimed at establishing the effect of liquidity risk, credit risk, operational risk, and market risk on the financial performance of DTSACCOs in Nairobi County, Kenya. The study was informed by three theories namely: loanable funds theory of interest, information asymmetry theory, and the shift ability theory. The study targeted all the DT-SACCOs in Nairobi County, Kenya, and adopted a descriptive survey design. The research utilized secondary data from annual reports of the SACCOs for five years and data was analyzed using STATA software Version 12. Descriptive and multiple linear regression analysis was conducted for the survey. Data presentation was done using tables and charts. The study established that financial risk has a significant effect on financial performance. Thus, financial risk can be utilized in predicting the financial performance of deposit-taking SACCOs in Nairobi County, Kenya. Other findings were that credit risk has a significant effect on the financial performance of deposit-taking SACCOs in Nairobi County, Kenya. Further findings were that liquidity risk has a positive but not a significant relationship with the financial performance of deposit taking SACCOs in Nairobi County, Kenya. Operational risk showed that it has a significant effect on the financial performance of deposit taking SACCOs in Nairobi County, Kenya, and market risk have an insignificant but a positive relationship with the financial performance of deposit taking SACCOs in Nairobi County, Kenya. Recommendations were made to the SACCOs regulator (SASSRA), SACCO practitioners, and consultants to mitigate financial risk in order to augment profitability in the SACCO sector. Further recommendations were made that little focus should be made on market risk and liquidity risks but much focus should be on operational and credit risks which should be mitigated so as to increase the financial performance of deposit taking SACCOs in Nairobi County, Kenya
Past Leadership Influence on Organization Structure, Strategy and Knowledge Management practices
No full textThis papers explores past leadership styles, experiences, decisions and dominant logic influences on the current leader’s traits behavior and strategic decisions regarding organization structure, strategy and knowledge management practices. In particular, the paper integrates components of dominant logic theory, dynamic capabilities theory, path dependency theory with transformation and other leadership styles theory. Creating a connection among them
A Systems Dynamics Simulation Model To Estimate Formal Employability Of Graduates In Kenya
No full textFormal employment is the epitome of university education, where employed graduates have a guaranteed pay, commensurate with their skillsets, education, with additional benefits like health cover, retirement benefits, including the ability to acquire loans, and develop their livelihoods. It has been determined that a high percentage of Kenyan university fresh graduates, do not stand a chance to get formal employment, due to lack of job skills, where employers prefer graduate candidates, who have prior employment history. The study observed that; the type of investments in the country, and industry appropriate skills training, are key factors that should be considered, in order to improve formal graduate employability. This study proposes that the government should regulate training in a timely fashion, and improve industrial attachment programme in the curricular, in alignment with industry needs. It should also implement effective economic policies, to attract investors who offer more formal employment opportunities, and in the same breath, set a favorable formal employment environment, by implementing less restrictive employment policies, to allow absorption of skilled graduates into formal employment
Factors Affecting Adoption Of Computerized Accounting Systems By Small And Medium Sized Manufacturing Firms In Nairobi County
No full textThe use of computerized accounting systems (CAS) helps ensure that any firm produces reliable financial reports that simplify and improve the effectiveness of aggregate accounting processes and procedures. Manufacturing companies face barriers to the implementation of accounting systems due to internal and external factors. Some of the failures of industrial companies is due to the inability of businesses to obtain accounting reporting structures. The implementation of a computerized accounting system plays a very important role in enabling consumers of financial information to achieve their financial objectives. The study aimed at evaluating the factors that affected adoption computerized accounting system by medium and small sized manufacturing firms in Nairobi County. The study was guided specifically by the following objectives; To determine extent to which accounting expertise affected adoption of computerized accounting system in by medium and small sized manufacturing firms in Nairobi County, To examine extent to which technological change affected adoption of computerized accounting system by medium and small sized manufacturing firms in Nairobi County and To establish the extent to which cost affected adoption of computerized accounting system adoption by medium and small sized manufacturing firms in Nairobi County. A descriptive research design was adopted in the study. Data collection was carried out using the primary approach and the standardized questionnaire was administered personally. The data collected was analyzed using Stata. The population for this study was small and medium sized manufacturing companies in the county of Nairobi. The study used a survey of 181 manufacturing firms. Robust regression analysis was used as a statistical method to estimate the relationship that occurred. The results indicated that accounting expertise, cost and technological change affected the adoption of computerized accounting systems by medium and small sized manufacturing firms in Nairobi County. The study recommended that owners and managers of small and medium sized manufacturing firms should consider accounting expertise, cost and technological change in order to bring efficiency and effectiveness in their firms through providing accurate and reliable reports to users of financial information
Effect Of Foreign Inflows On The Economic Growth Of East African Member Countries
No full textThe main objective of this study was to investigate the effect of foreign inflows on economic growth of East African Community countries. Three independent variables including foreign direct investment, personal remittance and external debt were reviewed to evaluate their effect on gross domestic product of EAC countries. The specific objectives for this study were to evaluate the effect of external debt on economic growth of East African Community countries, assess the effect of foreign direct investment on economic growth of East African Community countries and investigate the effect of remittances on economic growth of East African Community countries. Theories applicable to the study such as debt overhang theory, internationalization theory and utility theory were reviewed. To accomplish the study objective, Pooled Ordinary Least Squares model was recommended based on model estimation performed for panel data of three countries using Hausman test and Breasch –Pagan LM tests. The target population sample size was three East African Community member countries that signed into the union in 1993 and they include Kenya, Uganda and Tanzania. A panel data covering a period of 20 years from 1999-2018 was used. Rwanda and Burundi acceded the treaty agreement in July 2007 while South Sudan joined in April 2016. Data was obtained from World Bank’s African Development indicators, reports from bureau of statistics from each of the countries, data from central bank for each of the countries and information published on the website. This study concludes that foreign direct investment has significant impact on gross domestic product of East African Community Countries. Foreign direct investment therefore, is one of the foreign inflows that has an effect on economic growth of East African Community Countries. The results from this study also found the coefficient for remittance was positive but statistically insignificant. The results from this study found that external debt negatively affect the gross domestic product of East African Community countries. More studies would also be recommended to investigate the negative effect on gross domestic product for East African Community countries by external debt. Little or no research has been conducted to investigate the existence of debt overhang or debt crowding out effect specifically in East African Community countries. Further research is recommended as this would give more insights to East African Community countries on how to deal with external debts to avert the negative effect on economic growth and development
Influence Of Financial Services On Financial Performance Of Tier Two Banks In Kenya
No full textThis study examined the influence of financial services on performance of tier two banks in Kenya. The Kenyan banking sector is divided into three tiers; tier one consists of six large banks with about half of the total markets share, tier two banks which are fourteen medium sized banks and tier three banks which have the smallest market share. Financial information from fourteen tier 2 banks, covering five years from 2014 to 2018 were collected from the banking institutions website and the Central Bank of Kenya annual supervision reports. Descriptive statistics was applied on the performance indicators return on assets, ratio of total savings, total loans and total costs of financial training to the net income. The target population in this study was the Tier II banks incorporated in Kenya. According to the CBK Annual Report (2018), there are Fourteen Tier II banks in Kenya. Due to the small population size, n < 100, a census study was done for all the five years and analyzed using STATA software. Panel data estimation models include; pooled ordinary least square (OLS), fixed effects model (FEM) and random effects model (REM). Breusch-Pagan Lagrange multiplier (LM) test was used to decide whether fixed effect or random effects model was appropriate for data analysis. The Hausman test showed that the best model for the study was the random effects regression model. Regression using panel data Random Effect (RE) Model was applied. The study found that the means of the EPS, savings service, loan services and financial training were 79.58, 27.96, 32.34 and 0.11 respectively. Savings services and loans services were found to be statistically significant, while Financial Training was not statistically significant. The adjusted R square value was 0.1825, an indication that there was variation of 0.1825 on influence of financial performance of Tier II banks in Kenya due to changes in saving services, loan services and financial training at 95% confidence interval. This shows that approximately only 18.25% of the changes of financial performance of tier two banks could be explained for by changes in the study variables and thus the predictor variables in this study do not have a substantial influence on the performance of Tier II banks in Kenya. The findings of the study are that savings services and loans services have a negative effect on financial performance and financial training posted a significant positive impact on the financial performance of Tier II banks
Effect Of Foreign Inflows On The Economic Growth Of East African Member Countries
No full textPublic debt is a critical component in economic development in any country. Its servicing is also crucial on a country’s economic growth seeing as it is the first charge made from the total revenue collected in a period. This study aimed at establishing the effect of Debt Servicing on economic growth in Kenya. The study sought to: ascertain the effect of external debt on economic growth; establish the effect of domestic debt on economic growth; and determine the effect of total interest payment on economic growth in Kenya. This study adopted a descriptive survey design and obtained secondary data on the variables. Data collected was in the form of Time series and quantitative in nature. The data was analyzed by descriptive analysis. Inferential analysis involving correlation analysis was carried out to scrutinize the relationship between variables while regression analysis was performed to establish the strength of the independent variables against the dependent variable. Three independent variables which include: Debt Servicing, Domestic debt and external debt were regressed against the dependent variable: -Economic growth in Kenya to observe the relationship thereof. The study used time series to model the impact of public debt and its subsequent servicing to the rate of Gross Domestic Product growth in Kenya, and applied time series models, to be specific ARDL-EC model in order to come out with a deep analysis on the relationship between the three independent variables and economic growth rates in Kenya. The study found that external debt was significant in explaining economic growth, domestic debt had a negative but insignificant relationship with economic growth at the 5% critical level and no particular effect on economic growth in the short-run and finally that while debt servicing has an effect on economic growth in the short run, the effect is not significant. The conclusion was that the public debt in general, has no significant impact on economic growth in the country in the short run. The study recommended that borrowing for investments in infrastructural projects as proposed for in the Vision 2030, meant at ensuring that the country achieves a middle- income economy status should be encouraged, proceeds from external debt should be utilized properly (For infrastructural developments and advancement of the social status of the people and external debt levels are controlled and capped)
Relationship Between External Debt And Economic Growth Of Kenya
No full textExternal debt is crucial for national development as it uses resources to redress budget deficits, implement infrastructure development, and accelerate long-term and long-term economic growth. Kenya's economic growth has slowed for years. This is due to the depreciation of public finance projects using external debt. The purpose of this study was to determine the impact of external debt on Kenya's economic growth. Thus, the study evaluated the relationship between external debt and economic growth in Kenya in terms of Multilateral debts, Bilateral debts and debt servicing in Kenya. Specifically, the study examined the relationship between multilateral debt, bilateral debt and debt servicing on economic growth in Kenya. The study was based on Keynesian model, debt overhang theory and Buchannan theory. Correlation research design was adopted. The study was based on a research program that described and used secondary data from the National Treasury and the World Bank for the 45 years from 1988 to 2019. Descriptive statistics, multiple regression and time series analysis were used to analyse the data. Analyzed data are presented using tables, figures and diagrams. The study found that multilateral debt had an inverse relationship on the country’s economic growth with statistically significant results. Bilateral debt and debt servicing have positive and not significant relationship with economic growth. It can be concluded that the fact that bilateral debt is under the management of the national government increases prudence in its usage due to the transparency and monitoring by the tax payers who push for effective and effective use. The negative relationship between debt servicing can be well explained from the detrimental effect in the local commercial sector as a result of the fiscal actions. The government should collaborate and work closely with the multilateral organizations while at the same time providing conducive environment so that they can be able to deliver on the development agenda which will on the long run increase the economic growth of the country
Effect Of Enterprise Risk Management On Financial Performance Of Supermarkets In Nairobi County
No full textEnterprise risk management (ERM) is an increasingly popular strategy that attempts to holistically
evaluate and manage all of the risks faced by the firm. A combination of factors including gross
mismanagement, poor strategic decisions, tax issues and massive internal losses perpetrated by
some wayward employees and suppliers are the main reasons behind the turmoil’s and slow death
of giant retail chain stores in Kenya. Retail firms make money and increase stakeholder value by
engaging in inventory activities which harbor many risks. However failure to identify, assess, and
manage the major risks facing these organization’s business model results in significant loss of
stakeholder value. This study therefore sought to fill the research gap by assessing the effect of
ERM on financial performance of supermarkets in Nairobi County. The specific objectives of the
study was to establish the effect of risk identification, risk monitoring, risk response and risk
mapping on financial performance of supermarkets in Nairobi County. The study applied a
descriptive research design. The target population of this study comprised 10 major supermarkets
that include Tuskys, Naivas, QuickMart, Cleanshelf, Tumaini, Ukwala, Chandarana, Eastmatt,
Shoprite and Carrefour. The target size of the population is 80 top, middle and supervisors working
in these sections in the supermarkets in Nairobi County. The findings indicated that risk
identification and financial performance of supermarkets in Nairobi County, Kenya is positively
and significantly related (β=0.143, p=0.001). Risk monitoring and performance of financial
performance of supermarkets in Nairobi County, Kenya are positively and significantly related
(β= 0.251, p=0.000). Risk response and financial performance of supermarkets in Nairobi County,
Kenya are positively and significantly related (β= 0.132, p=0.030). Risk Mapping and financial
performance of supermarkets in Nairobi County, Kenya were positive and significant (β =0.150,
p=0.005). The study rejected the hypothesis on risk identification, risk monitoring, risk response
and risk mapping on the performance of supermarket. The study concluded that risk identification,
risk monitoring, risk response and risk mapping were key enterprise risks that largely affected the
performance of supermarket. The study recommends that supermarkets should institute and
nurture good enterprise risk management programmes. The programmes should encompass the
design and institutionalization of appropriate risk management structures to effectively provide
direction and oversight over the management of risks that affect such supermarkets. Enterprise risk
management frameworks and policies should be defined and communicated across the
supermarkets to widen the ownership and enhance responsibility and accountability for all staff in
the management of risks within the supermarkets. A sustained campaign to improve on risk culture
should be introduced in supermarkets coupled with regular risk management practices of risk
identification, risk monitoring, risk response and risk mapping. The campaign should encourage
communication of risks in an open, timely, and transparent manner and provide all key
stakeholders with the relevant information that informs the decisions and norms of the
supermarkets