Theses and Dissertations
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Item Chief executive officer characteristics and financial performance of commercial banks in Kenya(KCA University, 2025) Nyantika, Bevaline N.The performance of commercial banks is critical to the stability and growth of Kenya’s financial sector and the broader economy. This study investigates the influence of Chief Executive Officer (CEO) characteristics on the financial performance of commercial banks in Kenya. Specifically, it examines the effects of demographic attributes age, gender, education, and tenure on key financial indicators, including profitability, return on assets (ROA), and net interest margins. Anchored in the Upper Echelons Theory, the study adopts a quantitative research design and utilizes secondary data sourced from the annual reports and regulatory filings of 39 licensed commercial banks over the period 2003 to 2023. Regression analysis was employed to determine the relationship between CEO attributes and bank performance. The results indicate that certain CEO characteristics significantly influence financial outcomes. CEO tenure and gender diversity were positively associated with improved performance, suggesting that longer-serving CEOs and greater female representation at the executive level enhance strategic outcomes. CEO age also demonstrated a positive relationship with performance, reflecting the value of experience and maturity in executive decision-making. In contrast, the impact of educational background was inconclusive, showing no consistent effect across all performance metrics. These findings highlight the strategic role of executive leadership in shaping financial performance in the banking sector. The study offers key insights for policymakers, bank boards, and stakeholders, emphasizing the importance of integrating CEO demographic considerations into leadership selection processes. Recommendations include the adoption of performance-based remuneration systems, fostering leadership continuity, and promoting gender diversity in top executive roles. Overall, the study enhances understanding of leadership dynamics in corporate governance and lays the groundwork for future research on executive influence in financial institutions.Item Strategic innovation and financial performance of commercial banks in Kenya(KCA University, 2025) Momanyi, Edwin O.This study aimed to examine the impact of strategic innovation on the profitability of commercial banks in Kenya. Specifically, it focused on how technological innovation, business model innovation and market expansion influenced financial performance. The research was grounded in the Dynamic Capabilities Theory, Technology Acceptance Model, and Resource-Based View. A descriptive research design was employed, targeting all 42 commercial banks in Kenya, with 126 key participants drawn from the operations, finance, and marketing departments. A census sampling method was used. Data were collected through semi-structured questionnaires (primary data) and annual bank reports from 2019–2024 (secondary data), focusing on metrics such as ROE and ROA. Validity and reliability were ensured through expert consultation and pilot testing. Data analysis involved both descriptive and inferential statistics, and the results were presented using tables and graphs. The response rate was 77.8% of the respondents. The findings showed there is a significant positive trend towards business model innovation, technological innovation, while market expansion had moderate effect on financial performance of commercial banks in Kenya, business model innovation having the highest influence. The study recommends commercial banks in Kenya should intensify efforts to strengthen and scale up the adoption of business model innovations to enhance financial performance. Banks should further leverage data analytics and artificial intelligence to personalize services, improve decision-making, and expand financial inclusion. Future research ought to expand the scope beyond commercial banks to include other types of financial institutions such as microfinance institutions, SACCOs, and investment firms.Item Effect of Internal Control Practices on Financial Performance of Supermarket Chains in Nairobi Central Business District(KCA University, 2018) Gitau,Roselyn N.The globalization of the economy has led to retail supermarket opportunities in emerging markets. However, the Kenyan supermarket retailers face a dynamic retail environment highly challenging their financial performance. The survival of Kenyan supermarket retailers depends on the successful and proficient utilization of their financial resources. For the supermarket retailers to meet their financial performance target level, they should initiate internal control practices that keep them on a path toward achieving their financial objectives and the achievement of their missions Even though internal control practices have been implemented in most organizations, financial crimes have continued to rise among supermarket retailers. In Kenya several supermarket retail chains have been experiencing declining financial performance leading to the stores being placed under receivership in the last decade The empirical studies show that only limited studies focused on internal control practice and financial performance among supermarket retail chains in Nairobi central business district, depicting the existence of a knowledge gap. As noted above, there is need for supermarket retailers in Kenya to progress their financial performance by advancing on their internal control practices hence, the present study. The present study suggests that internal control practices help increase financial performance among supermarket retail chains in Nairobi central business district. The current study used a descriptive survey having the 54 main retail supermarkets in Nairobi central business district as its target population and obtained a sample size of 54 through census since the target operation was less than one hundred (100). Data collection involved the use of a questionnaire of which the primary source of data was tested for validly and reliability. Data was analyzed using Quantitative analysis and thereafter descriptive analysis. The study revealed that the average financial performance of supermarket chains in Nairobi central business district is moderate. It established that; there is a moderate positive effect of credit risk assessment practice on the financial performance of supermarket chains in Nairobi central business district, effective procurement control practice highly affects financial performance of supermarket chains in Nairobi central business district, adoption of proper internal checks practices highly affect the financial performance of supermarket chains in Nairobi central business district positively, and practice of segregation of duties has a major positive effect on the financial performance of supermarket chains in Nairobi central business district. The study revealed a 5% level of significance. 49.17% of change in financial performance of supermarket chains in Nairobi central business district is explained by; credit risk assessment practice, procurement control practice, internal checks practice and practice of segregation of duties. The study recommends that the supermarket chains in Nairobi central business district should; review their credit risk assessment practice in the dynamic retail environment, develop and implement a reviewed procurement policy, evaluate and employ the internal checks practices, and lastly the practice of segregation of duties should be actively employed by supermarket chains in Nairobi central business district.Item Financial Risk Management As A Tool For Improving Financial Performance In Real Estate Investment In Nairobi County(KCA University, 2013) Murunga, Patrick M.The study is an assessment of the financial risk management as a tool for improving financial performance in real estate investment in Nairobi County. The study intended to use descriptive survey design. The population of the study was all 151 real estate firms. The unit of analysis is the real estate managers of Nairobi Count. A sample of 110 firms was taken. The study used primary data which was collected through use of a questionnaire. Data analysis was conducted using descriptive and inferential statistics. The specific descriptive statistics used were mean scores and frequencies. The particular inferential statistics used was regression analysis. The data was then analysed using STATA. This research set out to find out whether financial management can be as a tool for improving Financial Risk Management in real estate in Kenya. The study has found out that financial risks are present in real estate and the same pose serious challenges to real estate managers and investors. The study has also found out that the risk management measures that the managers in the industry are using are not adequate given the significant losses that are suffered by the real estate managers and investors conducting business within this market. The study has found out that players within the industry are in agreement that effective risk management in real estate can increase profitability, increase operational efficiency and effectiveness and enlarge market share all of which can lead to financial performance. There is therefore need to consider adopting other risk management measures such as operational hedging and financial hedging that could assist managers in real estate minimize the losses suffered attributable to risks. There is need to carry out an in depth analysis that will help real estate managers identify all the risk facing them in real estate. There may be a need therefore to have further researchers investigate this variance and investigate how prepared real estate managers are in managing foreign exchange risk in the real estate market. Future researchers could also investigate the reasons behind real estate investment and the fundamentals that guide such investment. With a moderate risk attitude attributed to Kenyan property investors and their managers, it would be interesting to know what fundamentals drives real investment in Kenya given that risk is of little concernItem Effects Of Micro Factors On The Financial Performance Of Listed Insurance Companies In Kenya(KCA University, 2018) Kinyua, Beatrice M.Insurance Companies in Kenya have been in the process of significance gradual change, however, they are several challenges faced, and this study establishes factors affecting financial performance of insurance industry in Kenya. The micro factors tend to be emphasized in the insurance companies. The objective of this study is to find out whether there exists relationship between micro factors and insurance profitability. The main aim of this study is to find out the effects of micro factors on financial performance of insurance companies in Kenya. The study will use descriptive research. The research design will take the form of a census that covers the insurance companies licensed to operate. The population of the study was 6 listed insurance companies. The study used fixed regression analysis to find the relationship between the micro factors in terms of the company size, liquidity, retention ratio, insurance claims and financial performance of listed insurance companies. STATA was used to analyze the data. Results of the study revealed positive and no significant effect of liquidity on financial performance of listed insurance companies in Kenya. Secondly, company size had inverse and significant effect on financial performance of listed insurance companies in Kenya. Moreover, retention ratio and claims ratio had inverse and non-significant effect on financial performance of listed insurance companies in Kenya. It was concluded that there is need for insurance companies to continuously evaluate their working capital management strategies, asset accumulation strategies, market penetration strategies and claims evaluation strategies.Item Effect Of Loan Policies On Financial Performance Of Church Based Savings And Credit Co-operative Societies In Kenya(Kca University, 2017) Maithya, Matthew K.Savings and Credit Co-operatives Societies sector in Kenya has been very vibrant. It has grown to touch every part of our society and sector, but in all these sectors SACCOs are required to adhere to certain loan policies and regulations set by management internally and by SACCO Societies act (2008) for them to be financially sustainable. Therefore the objective of this study was to provide an understanding of how loan policies affect the financial performance of church based SACCO’s and bridge the knowledge gap that exists. This study was geared to provide an understanding on how specific loan policies affect the financial performance of SACCO’s established and run by churches in Kenya in order to bond the knowledge gap that may have existed. The study adopted descriptive research design study in which secondary data from SASRA reports and the published audited financial statements. The data was gathered between the period 2011 to 2015 for 33 church based SACCOs both registered by SASRA and those regulated by county cooperative commissioner. The study made use of regression analysis to analyze the data by equating dependent variables to the independent variable. All the hypotheses were tested by the researcher in the study and the findings were presented using tables. STATA was utilized to analyze the data collected in this research, as the researcher deems it to be the most appropriate, given its versatility and considering the nature of the data collected. The study found that, loan policies have insignificant effect on ROA of church based SACCOs according to the evidences gathered since the p-values where more than the acceptable significance level therefore there is a weak negative relationship between loans lending policies and ROA. There is also weak positive relationship between non performing loan and ROA as well as loan insurance cover policy with ROA. The study recommends that this SACCOs should review their loan policies regularly in order for them to remain competitive against changing financial environment.Item Effect Of Asset Allocation Strategies On Financial Performance Of Insurance Companies In Kenya(KCA University, 2019) Gathage, Robert K.Asset allocation is an important aspect in financial planning and if ignored it can prove fatal to an investment portfolio. Asset allocation strategies tend to balance returns and risks in an organization by making adjustments in the mix between cash, equities and bonds. In the insurance industry, the process of asset allocation is complicated given that the core business of insurers is settlement of claims to policyholders and yet at the same time, maximization of investment returns is crucial as investment income acts as a buffer from underwriting losses characteristic of the industry. Therefore, this study sought to determine the relationship between asset allocation and financial performance. A descriptive research design was used for the study. The study‟s target population was all 165 heads of finance, investment and risk departments in the 55 insurance companies in Kenya. Stratified random sampling technique was used to select 50% of the target population. The study‟s sample therefore was 83 respondents. The research primary data was collected by use of semi-structured questionnaires. Both quantitative and qualitative data was generated from the collected questionnaires. Thematic analysis was used to analyze the quantitative data and the result communicated in prose form. Analysis of quantitative data was based on descriptive and inferential statistics through the help of statistical package known as STATA 12. Descriptive statistics included percentages, frequencies, mean and standard deviation. The results were provided in terms of figures and tables. Inferential statistics entails regression and correlation analysis. The study also used correlation analysis and multiple regression analysis to determine the relationship existing between the independent variables and dependent variable. The study found that integrated asset allocation strategy positively influences the Kenyan insurance companies‟ financial performance. The study also found that strategic asset allocation strategy has a positive influence on financial performance of Kenyan insurance companies. Further, the study established that tactical asset allocation strategy influences financial performance of insurance companies in Kenya. The study further revealed that dynamic asset allocation strategy influences financial performance of insurance companies. According to the findings, there was a positive relationship between integrated asset allocation strategy and financial performance (r=0.6492, p=0.000). The results indicated a positive relationship between strategic asset allocation strategy and performance (r=0.6574, p-0.000). In addition, there was a positive association between tactical asset allocation strategy and financial performance (r=0.6455, p=0.000). Further, there was a positive relationship between dynamic asset allocation strategy and financial performance (r=0.5602, r-0.000). The F-calculated (26.82) was greater than the F-critical (2.46), which showed that the model can be used in predicting the influence of the independent variables on the dependent variable. This study recommends that insurance companies should only use integrated asset allocation strategy when they have enough resources. In addition, insurance companies should only use strategic allocation strategy in the achievement of long-term goals. Tactical asset allocation strategy should be used in achieving the short-term goals is an organization. It should be avoided in volatile markets as changes in the allocation of assets can underperform the averages of the market.Item Effect Of Islamic Financing On Financial Performance Of Businesses In Eastleigh Business Community, Nairobi County(KCA University, 2016) Billow, Hassan I.This study examines the effect of Islamic finance on the Eastleigh Business Community, Nairobi, Kenya, by analyzing the financial performance of the businesses that accesses the Islamic Financing overall period of 3years (2011-2013). The study particularly examines the effect of short term financing, long term financing and equity financing on the financial performance of Muslim owned businesses. The study employs the use of information on the type of financing accessed and more specifically return on Asset to measure the performance of the sampled firms that had access to Islamic financing. The 155 firms in textile industry was undertaken for this study however, the businesses also needed to have been in operation for at least 3 years as at December 2013. Out of the 155 firms the study was able to find 95 firms out of which only 55 firms had been in existence for over three years as at December 2013. Therefore our target population was these 55 firms. Primary data was collected using questionnaires. Stratified Sampling was used to come up with 43 firms that fully responded to questionnaires and formed the study. Descriptive statistics, regression and correlation analysis was used to analyze the variables. The relationship between short term financing and firm’s performance was positive and more specifically, cost plus sales was the most significant of all the types of short term. Long term and Equity financing was insignificant to the study. The findings are important to policy or law makers and Authorities such as capital markets authorities to construct and enact policies that would foster business growth without disregarding the Islamic Religion. The study may also be used for further research on related topic. The study recommended review and development of legal framework to fully incorporate Islamic financing to mainstream finance options in Kenya, need for promotion and awareness of the services and also recommended further research on Manufacturing and Construction industries to understand effect on long term financing.Item Effect Of Islamic Finance On Performance Of Commercial Banks In Kenya(Kca University, 2020) Akongo, Fredrick O.The main aim of this study was to establish the effect of Islamic finance on the performance of commercial banks in Kenya. The study was guided by three specific objectives which are to; establish the effect of Mudaraba loans on commercial banks’ financial performance in Kenya, assess the effect of Ijara products on commercial banks’ financial performance in Kenya and assess the effect of Murabaha contracts on commercial banks’ financial performance in Kenya. This study used a descriptive research design. The study was undertaken in the two completely established Islamic commercial banks in Kenya as well as the 5 conservative banks offering partial Islamic commercial banking. Secondary data was used for this study. This means that the data used was quantitative in nature. The researcher used financial performance data for the years 2015-2019. Descriptive statistics was utilized to organize Data. To scrutinize the data, descriptive analysis such as standard deviation, frequencies, mean, as well as percentages were utilized. Additionally, Pearson correlation as well as multiple regressions which are inferential statistics were utilized. So as to come up with a reliable model for this survey the researcher carried out appropriate diagnostic tests. The study established that Murabaha is the most common Islamic finance products though the Ijara was also significant. The findings also showed strong positive relationship between Murabaha and bank performance. From the study findings it was evident that there was a positive effect of Ijara on bank performance. Mudaraba had a positive insignificant effect on bank performance. Based on the findings, the study concluded that the Islamic finance affected bank performance with some having a positive significant effect and others insignificant effect. The study recommended that commercial banks in Kenya should sensitize its customers on the need to promote partnership through financing business ideas. Also, among the most recommended measures put in place is by selecting key financial and other indicators to monitor programs based on the statutory requirements on Islamic banking products. Developing systems for managing future performance based on the statutory requirements are also highly recommended.Item Effect Of Macroeconomic Variables On Average Financial Performance Of Deposit Taking Savings And Credit Cooperative Societies In Nairobi, Kenya(KCA University, 2018) Mwaniki, Scholastica.The purpose of the study was to examine the effect of macroeconomic variables on average financial performance of Deposit Taking Savings and Credit Cooperatives in Nairobi Kenya. The study sought to establish the effect of interest rate, inflation rate and money supply on the average financial performance of Deposit Taking SACCOs (DTSs) in Nairobi, Kenya. The study was based on the international Fisher effect theory, classical theory of inflation and Baumol-Tobin Approach to transaction demand for money. The study used a descriptive design. Target population was 35 DTS registered by SASRA to operate up to December 2017 in Kenya. The sample size for this study comprised of 15 DTS operating in Nairobi Kenya, which were licenced to operate FOSA by SASRA. These are the DTSs whose data was available for the period of study. Quarterly data was collected for 20 years (1997 – 2016). Analysis was conducted using the vector error correction time series model. The results show that there was no statistically significant relationship between return on assets and lagged values of either themselves or of other variables at the 5% level of significance. The effect of lagged values of money supply on return on assets was however significant at the 10% level. On money supply, there was a statistically significant relationship between this variable’s lagged values and itself (p value = 0.013). The lags of all other variables did not have a significant relationship with money supply. Pertaining the interest rates, it is evident that only the error correction term (p value = 0.000) impacted current interest rate significantly. Finally, Inflation rates had a statistically significant relationship with the error correction term (p value = 0.001), lagged values of itself (p value = 0.041), and lagged interest rates (p value = 0.017). Since the influence of money supply on returns on assets is significant at the 10% level, the conclusion is that the fluctuations in money supply have the highest prediction ability for variability in the financial performance of deposit taking SACCOs. It is therefore recommended that money supply targeting interventions should be incorporated in monetary policies of the Central Bank due to their ability to influence performance of financial services firms.