School of Business
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Item Determinants Of Dividend Payout For Firms Listed At Nairobi Securities Exchange(Kca University, 2022) Njiraini, Casto N.Over the years, dozens of theories have attempted to explain the dividends phenomenon with no consensus reached. Many of the theories view agents as rational and dividends either serve as an efficient way to resolve agency problems or as a signaling device to mitigate information asymmetry problems. This study sought to establish the determinants of dividend payout ratio for companies listed at the Nairobi Securities Exchange. The specific objectives of the study were to determine the influence of profitability, liquidity, leverage and firm size on dividend payout ratio for companies listed at the Nairobi Securities Exchange. The target population of the study were all the 64 firms listed at the NSE as at 31st December 2021. However, one of the firms was listed after 2017 while 5 were suspended remaining with 58 listed firms at NSE. Thus, a census of all the 58 NSE listed firms was conducted. The study employed descriptive research design and secondary data was collected for a period of 5 years, from 2017 to 2021. Data was analyzed using descriptive statistics and panel data regression. Descriptive statistics involved determining the mean, the standard deviation, skewness and kurtosis for each variable under study. Panel data regression analysis established the nature and significance of the relationship between the study variables. Stata version 16 was employed to analyze the data. The analyzed data was presented using tables and charts. The findings of the study indicated that firm size, liquidity and profitability of the companies listed at the Nairobi securities exchange had a positive and statistically significant relationship with dividend payout. However, financial leverage was found to have a positive but insignificant effect on the dividend payout of the listed firms under study. The study recommended that the listed firms under study should focus on making their operations cost efficient and effective to maximize profits and should invest some resources in fixed assets but have more investments in liquid assets. The firms relying on loans to finance its operations should not focus on paying dividends to its shareholders but the immediate focus of these firms and finally the firms should focus on investing the profits accrued from the operations of the company back to the company to grow the company and make it stable.Item Firm Characteristics And Financial Intermediation Efficiency Of Commercial Banks Listed At The Nairobi Stock Exchange In Kenya(KCA University, 2022) Njuguna, Eunice W.Commercial banks play an integral role in the financial intermediation. Financial intermediation is defined as the process through which commercial banks connect savers and borrowers. The efficiency and stability of commercial banks are regarded integral in the stability and eventual growth of the economy. Firm characteristics of commercial banks refer to those attributes that are largely determined by the management and the other organizational stakeholders including the employees. These variables are integral in the determination of the financial stability of commercial banks. However, there are various instances that have depicted the Kenyan banking sector sometimes unstable as well as inefficient especially following recent collapse of the Imperial bank and Chase bank. This study focused on the firm characteristics and their influence on the financial intermediation efficiency of commercial banks listed at the Nairobi stock exchange. A descriptive research design was adopted. Data was collected from consolidated reports for years 2017 to 2021. Data analysis was done through descriptive statistics and inferential statistical analysis including correlation and regression analysis. STATA and E-Views were used to incorporate the data forming the pooled model. Output from the data analysis were presented through tables, figures, and graphs. There was positive and not significant effect of capital adequacy on financial intermediation efficiency of listed commercial banks in Kenya. Further, operating efficiency and asset quality has inverse and not significant effect on financial intermediation of listed commercial banks. Moreover, there was an inverse and significant effect of liquidity on financial intermediation efficiency of listed commercial banks in Kenya. Based on the findings it can be concluded that increase in capital adequacy increases financial intermediation efficiency of listed commercial banks in Kenya. An inverse contribution of asset quality on financial intermediation efficiency we can conclude that an increased level of non-performing loans decreases financial intermediation efficiency. Further, there is a negative co-movement between liquidity and financial intermediation of listed commercial banks in Kenya. Moreover, an increase in outcomes with increase in level of financial intermediation efficiency of respective listed commercial banks in Kenya. From the findings it was recommended that the management approach ought to have vale chain design by incorporating the value benefit from respective firm characteristics. Financial services provision should be anchored on measures aim at precipitating demand for financial services in the target market niche. Moreover, commercial banks should stimulate demand for deposit and credit through linking deficit and surplus saving customers. Furthermore, banks should adopt data mining approaches so as to eradicate spillage of resources and optimize intermediation efficiency.Item Effects Of Firm Characteristics On Operational Efficiency Of Commercial Banks In Kenya(KCA University, 2022) Wangu, Evalyne N.The role played by Commercial banks in any economy in the world cannot be over-emphasized. Commercial banks in Kenya have contributed to savings which interprets to 78.55% of the total savings in the economy. The efficiency of commercial banks is of big importance in order to ensure that the financial sector is stable. There has been an increased cost of running a banking business that has led to increased cost of loans and customer dissatisfaction in commercial banks in Kenya. This study sought to examine the effect of firm characteristics on operational efficiency of commercial banks in Kenya by evaluating the effect of capital adequacy, asset quality and bank liquidity and on operational efficiency of commercial banks in Kenya. The study also assessed the moderating effect of bank size in the relationship between firm characteristics and operational efficiency of commercial banks in Kenya. The study stands to benefit researchers, policymakers and commercial banks. The study may face the limitation of non-response. The study was anchored on the liquidity preference theory, credit creation theory and buffer capital theory. The study is descriptive research design and targeted a population of 40 commercial banks licensed and operating in Kenya. Secondary data will be used which will be obtained public annual financial statements from the various commercial banks’ website and Central bank of Kenya website. The data collected was analyzed for descriptive and inferential statistics using Statistical Package for Social Sciences Version 26.0 and presented using graphs tables, charts and a linear regression equation. From the analysed data, there is weak relationship between capital adequacy and operational efficiency of commercial banks in Kenya as shown by a coefficient value was 0.15. Secondly, the assets quality is key in determining the operational efficiency of the commercial banks in Kenya as shown by a correlation coefficient of 0.717. Liquidity was established to be statistically correlating with operational efficiency in commercial banks in Kenya and this was shown in correlation value of 0.602. Bank size evaluated based on the total assets owned by the commercial banks revealed a strong positive relationship with banks operational efficiency as shown by a correlation value of 0.813. form these findings, the study recommended that banks should strategize to increase their core capital as this will avail more funds for lending which is the key banking function. Lending will earn the bank interest hence improve their operational efficiency. Finally, the Treasury and the bank managers should establish a should framework to ensure the commercial banks have enough assets to sail through the unstable economic conditions in the financial sector. The assets will able banks meet their operational cash needs, invest adequately and make profits.Item Determinants Of Financial Performance of General Insurance Companies in Kenya(KCA University, 2023) Kimani, Peter G.Stability and good performance of insurance companies is paramount. Kenyan insurance companies have, for the last decade, faced a turbulent business environment. This study evaluated determinants of financial performance for the insurers. It focused on five specific objectives namely: to establish the effect of underwriting risk on financial performance of general insurance companies in Kenya, to evaluate the effect of liquidity on financial performance of general insurance companies in Kenya, to find out the effect of solvency on financial performance of general insurance companies in Kenya, to assess the effect of firm size on financial performance of general insurance companies in Kenya to establish the effect of capital adequacy on financial performance of general insurance companies in Kenya. The basic theory for this study is theory of asymmetrical information while others for specific variables were liquidity preference theory, resource based view and pecking order theory. The study targeted thirty one general underwriters. Data was sourced for a period of seven years from 2014 to 2020. A panel data set was collated from the seven-year observations. Data analysis was done using panel estimation method. The study concluded that the most significant determinants of financial performance of insurance companies in Kenya are underwriting risk and solvency. Underwriting risk had a negative and significant influence on return on assets. Also, solvency was found to better financial performance of insurance companies significantly. Moreover, the study concluded that liquidity and capital adequacy negatively and insignificantly affected financial performance of insurance companies in Kenya. Lastly, firm size positively and insignificantly affected financial performance of insurance companies in Kenya. It is recommended that insurance companies in Kenya need to diversify underwriting business in order to mitigate risks associated with underwriting risk as it hampers financial performance. Also, insurance firms should maintain high solvency ratios as solvency was found to boost financial performance. This study is valuable because it provides empirical evidence that can be used by regulators to form policies that may stabilise the sector. At the same time, it contributes to firm performance literature in Kenya and beyond. The study too is useful to scholars in the field of insurance as it adds to insurance literature from Sub-Saharan Africa.