School of Business
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Item Effect of Macroeconomic Factors on Financial Performance of National Social Security Fund in Kenya(KCA University, 2019) Wanyeki, Michael J. G.Studies have shown that firm’s financial performance is influenced by the business cycle. During boom times, firms and households commit larger proportions of their income flow to debt servicing with preference for leverage following a pro-cyclical pattern. Both the demand for leverage and firms' income will rise and fall with the business cycle assuming ceteris paribus. However, studies have proven this not be true from the mixed results on the relationship between the macroeconomic variables and performance of the firms. There are a number of studies globally that indicate the existence of a relationship between the macroeconomic variable and the firm’s financial performance. The National Social Security Fund (NSSF) is an institutional investor whose profitability depends on how other sectors are performing. The funds for instance made a loss of over Sh. 10 billion in 2016 due to the decline in the performance by listed firms at the Nairobi Security Exchange. The purpose of this study is to investigate the effect of macroeconomic factors on the financial performance of National Social Security Fund in Kenya. The objectives of the study are to determine the effect of foreign exchange rates on the financial performance, establish the effect of the inflation rate on the financial performance, assess the effect of level of interest rates on the financial performance and to establish the effect of the Gross Domestic Product on the financial performance of NSSF. The study adopts a descriptive research design in which the target population is financial publication and the Kenya National Bureau of Statistics library. Secondary data was obtained from the NSSF and Kenya Bureau of Statistics and the Central Bank. Data was analysed using economic model and using tests as Johansen cointegration test, Granger causality test and Vector Autoregressive model with the aid of STATA as the statistical software. A regression model was fitted to the data and the results of the study show that GDP, exchange rates and inflation rates had a positive and significant influence on the NSSF in Kenya. The study also shows that though Interest rates have a positive influence of the financial performance of NSFF in Kenya, its impact is insignificant compared to the rest of the variables in the study. There however exists cointegrating relationship between the variables and the study shows that in the long run interest rates and inflation rates have a negative influence on the financial performance of NSSF in Kenya and become statistically insignificant.Item Influence Of Liquidity Risk Management Practices On Financial Performance Of Licenced Deposit Taking Saccos In Nairobi Kenya(Kca University, 2018) Kagunda, Simon M.This study sought to evaluate influence of liquidity risk management practices on the financial performance of licensed deposit taking SACCOs in Nairobi, Kenya. The following objectives guided the study: to investigate the influence of asset quality management practices on the financial performance of licensed deposit taking SACCOs in Nairobi, Kenya; to assess the influence of capital adequacy practices on the financial performance of licensed deposit taking SACCOs in Nairobi, Kenya; and to evaluate the influence of capital leverage practices on financial performance of licensed deposit taking SACCOs in Nairobi County. The study is based on three theories which are liquidity preference theory, loanable funds theory and theory of pecking order. The study used descriptive research design. The study targeted population 41 licensed deposit taking SACCOs in Nairobi, Kenya. The data collection involved the documentary reviews of information available in financial statements and annual reports. The study relied on secondary data sources. Descriptive and inferential statistics were employed to analyze quantitative data. The study employed panel regression analysis model using Statistical Package for Social Sciences (SPSS) version 24. Data was presented in the form of tables and charts. The study found that asset quality; capital adequacy and capital leverage significantly affect financial performance of SACCOs. The study recommends that SACCOs should work to increase capital adequacy and asset quality ratio. The study also recommends that deposit taking SACCOs should maintain a liquidity ratio that is enough to comply with SASRA regulations and at the same time ensuring an optimum liquidity level to minimize the institution’s liquidity risks. Further studies should be conducted to investigate other factors responsible for financial performance of deposit taking SACCOs.Item Effect Of External Debt And Inflation On Economic Growth In Kenya(KCA University, 2013) Osewe, Vincent.The state of economic growth in Kenya has been fluctuating over time as a result of various factors. This study was carried out using external debt and inflation rates as some of the variables which can impact economic growth. The purpose of this research was to investigate the effect of external public debt and inflation in Kenya. It also aimed at identifying other factors that can affect economic growth in Kenya. The specific objectives for the research were to determine the effect of external public debt level on economic growth in Kenya, analyze the effect of inflation on economic growth in Kenya and to establish whether external public debt level and inflation cause economic growth in Kenya. The methodology used during the research included secondary data from International Monetary Fund (IMF), International Financial Statistics (IFS) and Central Bank of Kenya (CBK) data. The study used econometric models in establishing the relationship among the variables. Johansen Cointegration test, Granger causality test and Vector Error Correction model were used using STATA statistical software. The research found that external debt and inflation had no impact on GDP and that there exists a cointegrating relationship among these variables hence they are moving together in long run. The test for granger causality indicated that there was no causal linkage among the variables.Item Effect Of Foreign Inflows On The Economic Growth Of East African Member Countries(KCA University, 2020) Ringera, Peninah M.The 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.