Theses and Dissertations

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End date: 2019

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    Effect of Entrepreneurial Orientation on Growth of Small and Medium Size Enterprises in Narok Town
    (KCA University, 2019) Letim, Leboi
    The main purpose of this study was to establish the effect of entrepreneurial orientation on growth of small and medium enterprises in Narok town. Specifically, the study sought to establish the influence of innovativeness, entrepreneurial pro-activeness, and risk taking on growth of small and medium enterprises. This study is justified on the basis that even though the present body of literature has delved into relationship between entrepreneurial orientation and organizational growth, there is limited research on how it affects growth of small and medium enterprises. The study adopted Schumpeter’s innovation theory, resource-based theory, and theory of business strategy. Methodologically, the study adopted correlation research design, where the study targets 1,390 SMEs operating within Narok town. The sample size for this study comprised of 139 SMEs, which constitute of 10% of the target population. The study used random sampling owing to the homogeneity of the units of study. Data were collected by means of structured questionnaires. Statistical Packages for Social Sciences version 24 was used to run both descriptive and inferential statistics. Descriptive statistics were used to compute frequencies and to derive conclusions and generalizations regarding the population, while inferential statistics; multivariate linear regression analysis was being used to determine the association between the outcome and predictor variables. Valid and reliability tests were conducted and ascertained data measures were able to measure what they are supposed to measure (validity) and if data collection tools consistently measure phenomenon of interest. Data was presented in form of figures and tables. Analysis of data established existence of a significant (p< .05) and positive relationship between predictor variables (innovativeness, entrepreneurial proactiveness, and risk-taking) on enterprise growth for small and medium enterprises. The study recommends that that SMEs should leverage technological innovation as a basis of enhancing business processes, internal efficiency, and infusing new products and services. Moreover, SMEs should continuously monitor and asses their past and present processes with a view to predicting future trends and patterns in relation to anticipated consumer needs and consumption patterns and even though risk taking an important approach to business growth, there is need to incorporate risk management strategies to mitigate the effect of risks involved in borrowing.
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    Effect of Corporate Risk Hedging Practices on Firm Value of Listed Commercial and Service Firms in Kenya
    (KCA University, 2019) Mauti, Dennis
    Thisstudyaimedtoexaminetheeffectoffinancialriskhedgingpracticesonfirm valueoflistedcommercialandservicefirmsinKenya.Thisstudywasguidedbythe followingfourobjectives:Toexaminetheeffectofliquidityriskhedgingonfirm’svalue oflistedcommercialandservicefirmsinKenya,toassesstheeffectofcreditrisk hedgingonfirmsvalueoffirm’svalueoflistedcommercialandservicefirmsinKenya, todeterminetheeffectofoperationalriskhedgingonfirm’svalueoflistedcommercial andservicefirmsinKenya,todeterminetheeffectofforexriskhedgingonfirm’svalue oflistedcommercialandservicefirmsinKenya.Thestudyemployeddescriptive research design using paneldata analysis.The targetpopulation ofthe study encompassed10listedcommercialandservicefirmsinKenya.Allthe10listed commercialandservicefirmsinKenyaformedthesamplesizeasthestudywasa censusoflistedbanksinKenya.Secondarydatawasextractedfrompublishedannual reportsofindividuallistedcommercialandservicefirms.Thedestructeddatawas recordedondatacollectionsheets.Bothdescriptiveandinferentialstatisticswere used.Descriptiveanalysissuchasmean,frequenciesandstandarddeviationwere used.Forinferentialanalysis,correlationanalysiswasadoptedtotesttheassociation betweenriskhedgingpracticesandfirm valueoflistedcommercialandservicefirms inKenya.SimpleOLSmodelwasusedtoestablishthecausaleffectrelationship.The findings were presented using tables with associated explanations.The study establishedthatcreditriskhedging,liquidityriskhedgingandoperationalriskhedging hadstatisticallysignificanteffectonfirm’svalueoflistedcommercialandservice iv firmsinKenya.However,theeffectforeignexchangeriskhedgingwasnotstatistically significant.Thestudyconcludesthatcorporateriskhedginghasasignificanteffecton firm’svalueoflistedcommercialandservicefirmsinKenya.Thestudyrecommends tomanagementoflistedcommercialandservicefirmsinKenyatoimproveontheir hedgingactivitiestowardscreditrisk.Specifically,thestudyrecommendsthatthe firmsshouldsetasideenoughprovisionsforbadanddoubtfuldebtstocoverforany eventualbaddebts,whichmayhavetobewrittenoff.Secondly,thecurrentstudy wishestorecommendtothetopmanagementoflistedcommercialandservicefirms toensurethefirmsareliquidenoughsuchthattheydonotrunintofinancialdistressa situationwheretheyarenotabletosettleshort-term obligationsastheyfalldue. Finally,thecurrentstudywishestorecommendtothetopmanagementoflisted commercialandservicefirmstocontrolforexriskhowever,sincetheeffectofforex riskhedgingwasnotsignificantespeciallyforfirmswithminimalcurrencyexposers. Keywords:Financialriskhedging,firmValue,forexriskhedging,creditriskhedging andliquidityriskhedging.
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    Effects of Corporate Social Responsibility on Financial Performance of Insurance Firms in Kenya
    (KCA University, 2018) Mugoiri, Ronnie N.
    The study sought to investigate the effects of CSR on the financial performance of insurance firms in Kenya. The study considered the three forms of CSR – Environmental CSR (ECSR), Philanthropic CSR and Community Development CSR as the independent variables and financial performance as the dependent variable. The study employed a descriptive research design to test for the effects of CSR on financial performance of insurance firms in Kenya measured by ROA. Investment in CSR was measured using monetary expenditure on CSR initiatives. Secondary data was obtained from audited financial statements, websites, publications and annual reports for the years 2008 to 2017. The objectives of the study were; to examine the effect of environmental CSR on the financial performance of insurance firms in Kenya, to establish the effects of philanthropic CSR on the financial performance of insurance firms in Kenya and to determine the effects of community development CSR on the financial performance of insurance firms in Kenya. Exploratory analysis, descriptive analysis and regression analysis using STATA version 12 was used to test the research hypotheses at 5% level of significance. Results were presented using tables and graphs. The Pooled OLS regression results revealed that environmental CSR had a statistically insignificant negative effect on the financial performance of insurance firms as measured by return on assets. The results indicated that philanthropic CSR had a statistically insignificant negative effect on the financial performance of insurance firms as measured by return on assets. The results showed that community development CSR had a statistically insignificant positive effect on the financial performance of insurance firms as measured by return on assets. The study findings revealed that CSR had mixed statistically insignificant effects on financial performance of insurance firms in Kenya. Therefore, the study concluded that CSR has no effects on the financial performance of insurance firms in Kenya. The researcher recommended that scholars and practitioners in Kenya and elsewhere in the developing world should rethink the concept of CSR to make it relevant, practicable and applicable to the prevailing contexts. insurance firms in Kenya should develop clear comprehensive company policies and implementation frameworks to guide their CSR operations and reporting on the same. The researcher also recommended that there is need for the Government develop comprehensive legal, regulatory and policy framework to guide CSR activities in the country so that the CSR movement can be focused on the country’s development agenda in their CSR initiatives.
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    Effectiveness of Internal Control Systems in Management of Funds in Public Sector at National Sub- County Treasuries in Kenya
    (KCA University, 2018) Masha, Iha F.
    The national sub county treasuries in Kenya are responsible for managing public funds at the sub county level. To translate this responsibility into concrete reality, the national sub county treasuries employ internal control systems. It is still not clear whether internal control systems have been effective in the management of public funds. This study therefore sought to examine the effectiveness of internal control systems in management of funds in the public sector at national sub county treasuries in Kenya. The study was guided by three objectives which include: to determine the effectiveness of control environment on management of funds; to establish the effectiveness of risk assessment on management of funds and to examine the effectiveness of control activities in management of funds. The study was based on the assumption that all independent variableswould remain constant through the period of the study. The study employed a descriptive research design using qualitative and quantitative approach. The target population was620 accountants and internal auditors from 310 national sub county treasuries. The study used cluster and purposive sampling techniques to select a representative sample of 184 respondents. Both primary and secondary sources of data were used: primary data was collected using questionnaires while secondary data was gathered from findings of previous studies on internal control systems and reports related to funds management at the sub county treasuries. The primary data obtained was analyzed through quantitative and qualitative analysis. Regression analyses were used to examine whether risk assessment, control activities, and control environment had an influence on funds management. The study revealed that internal control systems had a significant relationship with the management of funds. The research findings imply that internal control systems are a significant positive predictor of funds management. It was revealed that national sub county treasuries had challenges with risk assessment. The study findings indicated that internal control systems; more specifically, risk assessment, control environment, and control activities are significant areas that national sub county treasuries should focus greatly to improve the management of public funds. The findings are valuable to managers of national sub county treasuries and are a basis for enhancing the management of public funds at the national sub county treasuries in Kenya. It is recommended that national sub county treasuries should ensure that the right structures are established to support internal control systems including control environment, control activities, and risk assessment.
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    Influence of Financial Management Practices on the Revenue Collection Performance of Kajiado County Government, Kenya
    (KCA University, 2018) Wambui, Kelvin M.
    The promulgation of the new constitution in Kenya in 2010 brought forth new structures in the form of devolved governments. The new structure had the main purpose of ensuring that efficient delivery of services and every citizen experienced economic development. This noble idea by itself was to be financed by a substantial chunk of funds from the national government and revenue cash flows collected by the counties. The study was on the influence of financial management practices on the revenue collection performance of Kajiado County Government. The key variables being Revenue Sources, Financial Stewardship and Revenue Administration Strategies and their related influence on revenue collection performance in Kajiado County Government. The key theories reviewed to anchor the study were; public choice theory, prospect theory and expectation theory with these theories looking at explaining the influence of the independent variables on revenue collection performance. The study adopted a descriptive research design, which had a target population of 125 staff from Kajiado County Government. A census approach was employed due to the small size and accessibility of the respondents. The study used a structured questionnaire as the data collection tool that was tested for its reliability and validity to ensure consistency of information derived from the primary sources. Descriptive and inferential statistics were carried out for data analysis and development of the study model. The study concluded that the revenue sources, revenue administration practices in place and the financial stewardship of staff collectively have a moderate positive influence on the revenue collection performance of Kajiado County Government. The study had formulated three study hypothesis from the conceptual framework which were subsequently tested and the null hypothesis being rejected in all three hypothesis. The accepted study hypothesis were; (1) Revenue source significantly influences revenue collection performance in Kajiado County Government, (2) Revenue Administration Practices significantly influences revenue collection performance in Kajiado County Government and (3) Financial Stewardship significantly influences revenue collection performance in Kajiado County Government. The study also revealed that at 0.05 significance level, there exists a positive significant relationship between revenue sources, revenue administration practices, financial stewardship and revenue collection performance of Kajiado County Government with these financial management practices accounting for 20.34% variation on the revenue collection performance. The study recommends that Kajiado County Government should; strategize in identifying and adopting more revenue sources that have the capacity to generate sustainable cash flows for operations and economic development: revenue administration practices need to be regularly reviewed and updated to cater for the frequent changes in the business environment and volatile taxpayer behavior thus, sealing existing and emerging loopholes; Investment in more target-oriented training, especially on revenue administration is recommended to address existing gaps in staff proficiency and subsequently improve staff morale. The main limitation of the study was that the study was carried out only in Kajiado County thus not generalizable in the Kenyan context. Further research on other Kenyan Counties is recommended.
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    Testing Efficient Market Hypothesis of Nairobi Securities Exchange
    (KCA University, 2016) Mburu, George
    There has been an increased interest in the emerging markets stock exchanges, with scholars and practitioners raising concerns as to the nature of markets in various stock exchange. This study thus will be carried out with an aim to test the efficient market hypothesis at Nairobi Stock Exchange. Specifically, the study will: test the random walk hypothesis for the returns of securities traded and determined. To determine whether stock market exhibits a trend towards increased efficiency over time. The study made use of data that was collected NSE NSE 20-share Index from 1st January 2009 to 31st December 2013. The study will use both parametric and nonparametric tests to analyse the results through STATA. Unit root test, runs test and Autocorrelation tests were carried out to test for the efficient market hypothesis at Nairobi Stock exchange. The study results revealed varied results with the runs tests indicating that NSE follows a random walk hypothesis while the autocorrelation tests and unit root tests showed that NSE was not weak form efficient. The research concluded that the NSE was not weak form efficient, with all the tests rejecting the existence of weak form of hypothesis. This indicates that the market has a flow of public information which affect the trading at NSE. The study further recommends the need to put in place policies to ensure continuous flow of information.
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    Effect of Credit Risk Management Practices on Performance of Commercial Banks in Kitengela, Kenya.
    (KCA University, 2018) Wanjagi, Agnes J.
    Credit management is a major factor that influences the profitability, growth and survival of different banks. Firms mostly gain from sound credit management if the proceeds of sales surpass the total costs of credit. Actually, weak credit management is the main cause why many commercial banks fail. The target population for this study were 50 staff members from the credit department of Commercial banks. The researcher used convenience sampling in which it narrowed down to 5 Commercial banks in Kitengela which included Equity, Cooperative, Barclays, KCB and Family. The research relied heavily on primary data. The former was gathered through self-administered questionnaires containing closed ended questions. The information was gathered and coded using descriptive statistics, specifically the mean and standard deviation to explain each variable. The data was analyzed through statistical package for social sciences (SPSS). Pie charts, frequency distribution tables, and bar charts had a great role in the presentation of results while ANOVA was used in analyzing the findings. The findings indicate that Credit appraisal positively influenced performance and was insignificant, risk identification had a positive impact and was significant, risk monitoring had a negative impact and was insignificant, risk measurement had a positive and significant effect, risk control had a positive and significant effect while risk monitoring had a negatively and insignificantly influenced performance. Recommendations for the research indicate that banks can invest in other ways of improving performance such as business alignment, channel optimization, process costs, staff productivity, technology and innovation. The study concludes that the banks need a multifaceted approach in their risk management efforts that includes all the practices that were of focus to this study in order to realize the full benefits relating to risk management programs. The study suggests that further research can be done on impact of credit risk management on financial performance of other institutions like microfinance institutions and SACCOs.
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    Factors Influencing Social-environmental Responsibilities Disclosures in Financial Reports of Kenyan Listed Firms
    (KCA University, 2019) Kemei, Ceaser C.
    The objective of this study is to determine the factors influencing the social-environmental responsibilities disclosures in Annual financial reports of Kenyan listed firms. Social environmental responsibilities disclosures are voluntary therefore disclosed at the discretion of management and has been identified by various studies to improve image, reputation, enhance accountability, legitimacy and help manage stakeholders. Some studies have also shown that financial factors, governance characteristics, ownership characteristics and stakeholders, influence the extent of these disclosures, hence this study examined how the level of social environmental responsibilities disclosures in financial reports of Kenya listed firms is influenced by their size, profitability and leverage. Descriptive research design was used and secondary data was collected from 2009 to 2018 annual reports of 45 out of 48 targeted companies listed prior to 2009. The dependent variable is extent of disclosure is measured on total score from 39 disclosure items each with a rating between ‘0’ to ‘3’ based on absence and the degree of specificity or detail. The disclosure items was developed guided by Global Reporting Initiative index. STATA version 12 software was used to analyze the significance of the factors on level of Social environmental responsibilities disclosures. Exploratory, descriptive, diagnostic analysis were performed and the results showed that factors of firm’s size, leverage were positively significant and profitability is negatively significant in influencing the disclosure of social environmental responsibilities information on financial reports of Kenyan listed firms.
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    Microcredit Determinants and Portfolio Quality of Microfinance Institutions in Kenya
    (KCA University, 2018) Mutiso, Patrick M.
    Micro credit plays a major role in development strategies. This is in view of its direct relationship to both poverty alleviation and improvement of the living standards. At the same time, low access to credit and gender inequalities in developing societies inhibit economic growth and development. Further, societies that discriminate based on gender have lower credit accessibility, greater poverty, slower economic growth, weaker governance, and a lower standard of living. Micro credit gives access to services to average earners wishing to access money to improve income-generating activities. Financial services of this nature are offered to those that depend on their small-scale economic activities and businesses who are considered highly risky by the mainstream commercial banks. Literature shows that many small enterprises and low-income earners always find it difficult to access financing in the mainstream commercial banks partly because of the stringent measures taken by commercial banks to shield themselves from non-performing loans. This study therefore seeks to investigate the effect of microcredit determinants on portfolio quality of microfinance institutions in Kenya. The study is anchored on financial intermediation theory supported by information asymmetry theory and the modern portfolio theory. The study will adopt descriptive survey research design with the population comprising all the 57 microfinance institutions in Kenya. Primary data will be collected using semi structured questionnaire through drop and pick method. Face and content validity of the questionnaire will be ascertained by supervisor, lecturers and peers. Reliability of the questionnaire will be tested using Cronbach’s alpha. Data analysis will be aided by SPSS Version 23.0. Quantitative data will be analysed using descriptive statistics as well as inferential analysis such as correlation and regression analysis. Qualitative data will be analysed using conceptual content analysis. Coefficient of determination (R2) will be used to test the significance of the model F-statistic Data will be presented in tables, charts and graphs.
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    Factors Influencing Performance of Micro and Small Enterprises in Kenya a Case of Kiambu County, Kenya
    (2018) Kariuki, Lydia W.
    Micro and Small Enterprises act as a primary driving force for economic growth in developing countries. Factor influencing the performance of Micro and Small Enterprises in Kenya are essential in improving the uptake of this venture. The study sought to establish factors that influence the performance of MSEs traders in Kiambu County. The objectives of the study was therefore to determine the influence of access to finance on performance, establish the influence of management skills on the performance, determine the influence of access to business information on performance and establish the influence of business regulation on the performance of micro and small enterprises. The study was based on credit rationing theory, resource based firm theory and opportunity based firm theory. The study employed descriptive research design to achieve the objectives. The target population under study was 4897 licensed MSEs in Kiambu County as per the Business Register 2018. Stratified random sampling was applied and Krejcie & Morgan (1997) formula was used to arrive at the sample size of 385 MSEs.The study utilized primary data and the data collection was conducted through self-administered questionnaires. A pilot test was conducted using forty questionnaires to ensure data validity and reliability. The data collected was analyzed using Statistical Package for Social Sciences (SPSS) version 20 software. Normality test was carried out to test for any outlier. The study also carried out Multicolinearity test to test for any correlation between variables. Regression coefficient was used to analyze the relationship between variables. To determine the number of dimensions required to represent set of variables factor analysis was conducted. The results of the study were presented in frequency and percentages. The study finding indicate that access to business information positively and significantly affect the performance of MSEs, Access to finance was found to positively and significantly affect the performance of MSEs, management skills and business regulation didn’t significantly affect the performance of MSEs in Kiambu county. The study recommends that the Government should provide training and seminars to entrepreneurs regarding marketing strategy and how to be innovative and be provided with business information. The study recommends banks to improve on lending terms and condition to enable MSEs access to finance. The government should also ensure that the business regulation is not beyond entrepreneurs' ability as well as offering basic entrepreneur skills which will enable entrepreneurs to be innovative and creative while making investment decision and enhance them to exploit the available business opportunities.