Theses & Desertations

EFFECTIVENESS OF CREDIT POLICY ON MANAGEMENT OF NON-PERFORMING LOANS IN KENYAN COMMERCIAL BANKS

Sun, 01 Jan 2023 00:00:00 GMT

EFFECTIVENESS OF CREDIT POLICY ON MANAGEMENT OF NON-PERFORMING LOANS IN KENYAN COMMERCIAL BANKS ATIENO, EUNICE MACREAN The financial growth and stability of commercial banks majorly depend on regular loan repayments by their borrowers. In the recent past, commercial banks have been facing challenging matters originating from steady increases in Non-Performing Loans due to borrowers defaulting in making their loan repayments as scheduled. The purpose of this study was to determine the effectiveness of credit policy on management of NonPerforming Loans in Kenyan Commercial Banks. The specific objectives were to determine the effect of credit terms, credit appraisal and collection policy on management of non-performing loans in Kenyan Commercial Banks. The study literature was supported by information from the Theory of Information Asymmetry and Credit Scorecard Theory. The study adopted an explanatory type of research design on a sample size of 222 credit officers working in the 41 commercial banks within Nairobi city. Cronbach alpha and factor analysis were applied to test the reliability and validity of the research instruments respectively. Data collection was done using self-administered questionnaires. A multiple regression model using SPSS (version 23) was used to analyze the obtained data and test the hypotheses. The findings revealed that credit terms (ꞵ= .570, p < .000), credit appraisal (ꞵ = .302, p < 0.000), and collection policy (ꞵ = .201, p < .000) all had a positive and significant effect on management of Non-Performing Loans. Based on the new findings, the management of commercial banks and policy makers should develop effective strategies, policies and techniques that would make borrowing affordable to attract creditworthy borrowers to the banks. The study brings new knowledge that credit terms have the greatest predictive power on management of Non-Performing Loans compared to credit appraisal and collections policy. Whereas the study used quantitative data, future studies may consider using mixed approaches as they may uncover other issues affecting the management of Non-Performing Loans in commercial banks.

MODERATING EFFECT OF TECHNOLOGY ON THE RELATIONSHIP BETWEEN INVENTORY MANAGEMENT PRACTICES AND PERFORMANCE OF SELECTED SUPERMARKETS IN ELDORET CITY, KENYA

Mon, 01 Jan 2024 00:00:00 GMT

MODERATING EFFECT OF TECHNOLOGY ON THE RELATIONSHIP BETWEEN INVENTORY MANAGEMENT PRACTICES AND PERFORMANCE OF SELECTED SUPERMARKETS IN ELDORET CITY, KENYA JELIMO, SHARON Inventory management practices play a vital role in minimizing costs and maximizing profits, as well as meeting customer demands by making sure there is enough stock at the right quantity and quality and available at the right time and the right place. To make sure inventory is managed properly, there needs to be the adoption of inventory management systems. The objective of the study was to determine the moderating effect of technology on the relationship between inventory management practices and the performance of selected supermarkets in Eldoret City, Kenya. Specifically, the study sought to determine the effect of economic order quantity (EOQ) on performance, the effect of vendor managed inventory (VMI) on performance, the effect of ABC on performance, the effect of just in time on performance, and the moderating effect of technology on the relationship between inventory management practices and performance of selected supermarkets in Eldoret City, Kenya. The study was informed by game theory, transaction cost theory, and the technology acceptance model. The philosophical foundation of this study is in line with the positivist approach. Anchoring on an explanatory research design, the study target population was 1,004 employees of selected supermarkets in Eldoret City, Kenya. The study sample size was 317 employees, computed using the Yamane formula. The employees were selected using stratified and simple random sampling techniques. Data was collected using structured questioners and items anchored on a five-point Likert scale. The study hypotheses were tested using a multiple regression model and Hayes process macro for moderation analysis. The results showed that economic order quantity (EOQ) (β = 0.438, p = 0.00), vendor managed inventory (VMI) (β = 0.556, p < 0.05), ABC analysis (β = 0.548, p = 0.00), and just in time inventory management (β = 0.578, p = 0.00) had a positive and significant effect on performance. In addition, technology moderated the relationship between economic order quantity (EOQ) (β = 0.141, p = 0.009), vendor managed inventory (VMI) (β= 0.132, p = 0.004), ABC analysis (β = 0.155, p = 0.032), and just in time inventory management (β = 0.370, p = 0.00) with performance. The study concluded that inventory management practices (economic order quality, vendor management inventory, ABC inventory management, and just-in-time inventory management) are important in enhancing organization performance. Additionally, technological innovations in processes improve productivity and efficiency, which reduce costs and improve profit margins while making businesses more competitive. From the findings, the study recommends utilizing inventory management practices in meeting customer demands while minimizing carrying costs and stock-outs. The study is beneficial to the government and policymakers since it may uncover some specific challenges or barriers faced by supermarkets related to inventory management, technology adoption, or financial performance. The management of fast-moving consumer goods needs to adopt proper inventory management practices in order to reduce operation costs such as holding costs and ordering costs, among others, hence increasing company performance

DETERMINANTS OF FINANCIAL PERFORMANCE OF COMMERCIAL BANKS LISTED IN NAIROBI SECURITIES EXCHANGE, KENYA

Mon, 01 Jan 2024 00:00:00 GMT

DETERMINANTS OF FINANCIAL PERFORMANCE OF COMMERCIAL BANKS LISTED IN NAIROBI SECURITIES EXCHANGE, KENYA OSEKO, DEBORAH KWAMBOKA The main goal of every banking institution is to operate profitably in order to maintain stability and sustainable growth. External and internal economic environments are viewed as critical drivers for bank performance. According to the Financial stability report released in 2020, despite the resilience across the Kenyan banks, they were still experiencing increased non-performing loans affecting their profitability. The resolve of the study is to investigate the effect of bank specific and macroeconomic determinants on financial performance of commercial banks listed in Nairobi Securities Exchange, Kenya. The study is guided by the following specific objectives; to determine the effect of bank capital, bank assets, bank tax, bank debt ratio, bank concentration, inflation rate and lending interest rate on financial performance of commercial banks listed in Nairobi Securities Exchange, Kenya. The study was anchored on transaction cost economic theory and inverted U hypothesis. Longitudinal research design approach was adopted with panel secondary data spanning from the period 2011-2020. Stationarity, normality, heteroscedasticity, multicollinearity and serial correlation diagnostic tests were performed. Data was examined using STATA software and results were presented in form of descriptive and inferential statistics. Hausman test results suggested a fixed effect estimation model was appropriate over random effect model. Regression analysis established that, total bank assets (β1 = .06, p = .000 < .05), bank capital (β1 = 7.7, p = .000 < .05), and debt ratio (β1 = .06, p = .000 < .05) had a positive and significant effect on financial performance while bank concentration (β1 =. −.001, p = 0.012 < .05) had a negative and significant effect on performance. The study recommends that banks ought to adopt strategic asset management for better asset allocation. Government oversight is crucial to prevent crises like Chase Bank in Kenya. Banks should prioritize efficient capital allocation and diversification. Additionally, on the effect of bank taxes, the government should implement counter- cyclical policies to reduce risks during economic downturns. Further research could investigate industry-specific factors impacting banking profitability, extend case studies to specific banks, and explore the influence of behavioral economics principles on consumer financial decisions, product design, and profit margins

EFFECT OF STRATEGIC LEADERSHIP STYLES ON INNOVATIVE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISE IN UASIN GISHU COUNTY KENYA

Mon, 01 Jan 2024 00:00:00 GMT

EFFECT OF STRATEGIC LEADERSHIP STYLES ON INNOVATIVE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISE IN UASIN GISHU COUNTY KENYA OKONJO, LINDA ACHIENG Small and medium size enterprises are an integral part of a growing economy; According to Uasin Gishu County records there are 1611 registered SMEs in Eldoret Town. The focus therefore, should be directed at the establishment of the growth of the sector; hence the need to establish the effect of strategic leadership styles on innovative performance for small and medium enterprises in Uasin Gishu County. Proper strategic leadership is an essential part of decision making to ensure short term success and longterm sustainability, given the current volatile business environment. The study was guided by the following objectives; to establish the effect of transformational leadership style, transactional leadership style, inspiration leadership style and paternalistic leadership style on SME innovation performance within Uasin Gishu County. The population of study comprised 1611 registered SMEs in Uasin Gishu County. Cluster sampling technique to select the SMEs was used to select a sample of 290 respondents. Collection of primary data was done through a structured questionnaire. Data analysis was facilitated by use of Statistical Package for Social Science (SPSS) version 24 to generate the means, standard deviation and variances which were presented using tables, frequencies and percentages. A descriptive method was employed in analyzing qualitative data where frequencies and proportions were used in interpreting the respondent’s perception of issues that were raised in the questionnaires. Correlation analysis was used to establish the strength of association between variables and regression to determine the relationship between variables. The study findings revealed that there was positive linear effect of transformational leadership style on innovation performance in small and medium enterprises within Uasin- Gishu County (β1=.119, p=0.041). Transactional leadership style has a positive and significant effect on innovation performance in small and medium enterprises within Uasin- Gishu County (β2=.157, p=0.002). Inspirational leadership style was found to have a positive and significant effect on innovation performance in small and medium enterprises within Uasin- Gishu County (β3=.258, p=0. 000). Paternalistic leadership style was found to have a positive and significant effect on innovation performance in small and medium enterprises within Uasin- Gishu County (β4=.271, p=0.000). The study concluded that transactional, inspiration and paternalistic leadership style had a positive influence on SME innovation performance within Uasin Gishu County. The study recommends that SMEs within Uasin Gishu County adopt leadership style which allows managers to make employees feel valued and comfortable in their respective duties which helps bring out the best in them to achieve their goals and personal growth.

EFFECT OF COST ACCOUNTING TECHNIQUES ON FINANCIAL PERFORMANCE OF MANUFACTURING INDUSTRIES IN NORTH RIFT ECONOMIC BLOCK, KENYA

Fri, 01 Sep 2023 00:00:00 GMT

EFFECT OF COST ACCOUNTING TECHNIQUES ON FINANCIAL PERFORMANCE OF MANUFACTURING INDUSTRIES IN NORTH RIFT ECONOMIC BLOCK, KENYA OTIENO, HELEN ADHIAMBO Current manufacturing industries are struggling with challenges like low productivity rate and high cost of production which leads to low profitability. This study intended to evaluate the effect of cost accounting techniques on financial performance of manufacturing industries in North Rift Economic Block, Kenya. Specific objectives were to examine the effect of marginal, standard, activity based and target costing on financial performance of manufacturing industries. The current study was guided by Theory of constraints, Resource based view theory and Contribution Theory. The study adopted explanatory research design and stratified random sampling techniques for data collection from a sample size of 220 from 48 manufacturing industries. Similarly, self-administered questionnaire with closed ended questions. Cronbach’s alpha and factor analysis were applied to test for reliability and construct validity respectfully. Multiple linear regression model was applied in establishing the effect of independent variables on the dependent variable. The study findings established that marginal Costing (β = 0.424, P >0.000), Standard Costing (β = 0.216, P >0.000), Activity Based Costing (β = 0.187, P > 0.000), Target Costing (β = 0.146, P > 0.008) with Average R2 = 0.662 have positive significant effect on financial performance of Manufacturing Industries. The study further revealed that ABC is the most influential variable in prediction of outcome of financial performance of manufacturing Industries. The Study concluded that Cost Accounting is an essential practice in any manufacturing Industries and cannot be excluded from basic activities in manufacturing Industries. This study recommends that further study on this area should be done on service industries and application of non- financial performance measurements to establish whether the study would yield same results.

MODERATING ROLE OF FINANCIAL LITERACY ON THE RELATIONSHIP BETWEEN CASH MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF MICRO, SMALL AND MEDIUM ENTERPRISES IN ELDORET TOWN, KENYA.

Sun, 01 Oct 2023 00:00:00 GMT

MODERATING ROLE OF FINANCIAL LITERACY ON THE RELATIONSHIP BETWEEN CASH MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF MICRO, SMALL AND MEDIUM ENTERPRISES IN ELDORET TOWN, KENYA. OWINO, THADEUS ONYANGO Micro, Small and Medium Enterprises (MSMEs) drive economic growth in developing and developed nations. Despite their contributions to economic growth through employment creation, alleviation of poverty, handling the problem of food insecurity and contribution to the Gross Domestic Product in Kenya, they are affected by a series of challenges. These include poor cash management practices, lack of capital, financial illiteracy and technological problems leading to their collapse within a few years of operations. As a result, it was necessary to examine the moderating role of financial literacy on the relationship between cash management practices and the financial performance of MSMEs in Eldoret Town, Kenya. The specific objectives of the study were to determine the influence of; accounting practices, budgeting practices, cash flow management, and financial literacy on financial performance. Finally, the study examined the moderating role of financial literacy on the relationship between; accounting practices and financial performance, Budgeting practices and financial performance, Cash flow management and financial performance. The research was guided by the Decision Usefulness theory, Miller Orr cash management model and Dual processing of financial literacy theory. The study utilized an explanatory research design to explain the cause-effect relationship between the variables. The target population of the study was 72,557 MSMES. The research employed simple random sampling techniques in collecting data from 398 managers/owners of MSMEs using self-administered questionnaires. In addition, factor analysis and Cronbach alpha were applied to test validity and reliability respectively. Using SPSS version 23, a hierarchical regression model was employed in data analysis and testing of the hypotheses. The study revealed that firm age (β=.241, p=0.06) significantly influenced financial performance, while firm size (β=0.090, p=.467) was found to be insignificant. The control variables explain 6.1% of the variance in financial performance, as indicated by R2=.061. The study shows that accounting practices (β=.379, p=.000), budgeting practices (β=.230, p=.000), and cashflow management (β=.181, p=.002) significantly influenced financial performance. These variables explained 41.6% of the variance in financial performance, as shown by R2=.416. Additionally, results reveal that financial literacy directly influenced financial performance (β=.107, p=.046, R2 =.484, ΔR2=.007). Finally, financial literacy was found to have a moderating influence on the link between; accounting practices and financial performance (β=.054, p=.002, R2=.501, ΔR2 =.017), budgeting practices and financial performance (β=.081, p=.032, R2 =.509, ΔR2 =.008) and cashflow management and financial performance (β=.106, p=.003, R2 =.524, ΔR2 =.015). These findings add some new knowledge to the financial literature. The research aimed to benefit scholars by enhancing their knowledge by using theories, models, and results for future studies. The outcome of this research further provides prudent information to managers, owners, and employees of MSMEs in implementing cash management policies and practices in their operations. The study focused on benefiting policymakers who formulate policies concerning MSMEs' growth, development, and survival. The study recommends that the policy makers should develop training programs that could equip owners/ managers of MSMEs with relevant skills and knowledge in accounting, budgeting and cashflow management, which could enable their businesses to have good financial performance.

EFFECT OF SELECTED MANAGERIAL ASPECTS ON SUSTAINABILITY OF COMMUNITY DEVELOPMENT PROJECTS IN ENDEBES SUB COUNTY, TRANS NZOIA COUNTY

Sat, 01 Oct 2022 00:00:00 GMT

EFFECT OF SELECTED MANAGERIAL ASPECTS ON SUSTAINABILITY OF COMMUNITY DEVELOPMENT PROJECTS IN ENDEBES SUB COUNTY, TRANS NZOIA COUNTY CHEPKURUI, VINCENT NGEYWO This research was conducted with the intention of determining the effect that certain management factors have on the sustainability of community development projects in Endebes Sub County. The following objectives served as the foundation for the research: to determine the influence that strategic leadership, strategic competency, integrity, and culture have on the long-term viability of community development programs. Fiedler's leadership contingency theory and distributives theory served as the study's guiding theoretical frameworks. This study took an explanatory approach to its research strategy. The research utilized a census approach in order to collect 165 different responses. The validity of the instruments was evaluated based on how clearly they presented their material and presented themselves. The reliability test was carried out using a cutoff of 0.7 for the Cronbach alpha coefficient. A questionnaire that was designed to include both open-ended and closed-ended questions was used to collect the data. With the aid of the Statistical Package for the Social Sciences, the data was then examined using both descriptive and inferential statistics (SPSS). Tables were used to present the analysis' findings. Strategic leadership (β=0.143, p0.05), strategic competency (β=0.329, p0.05), integrity (β=0.210), and culture (β=0.34, p0.05) were found to be statistically significant and to have an impact on the long-term viability of community development programs in Endebes. The model's executive summary states that specific management criteria accounted for 74.7% of the variation in the level of sustainability. The study's findings suggest that some management factors have a good impact on the long-term sustainability of community development initiatives. According to the study's conclusions, it was advised that for the administration and sustainability of community projects, good governance, knowledge, and decision-making are crucial. Additionally, the study suggested that information, training, and communication with project stakeholders are necessary for the success of any project.

EFFECT OF STRATEGIC LEADERSHIP STYLES ON INNOVATIVE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISE IN UASIN GISHU COUNTY KENYA

Sun, 01 Oct 2023 00:00:00 GMT

EFFECT OF STRATEGIC LEADERSHIP STYLES ON INNOVATIVE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISE IN UASIN GISHU COUNTY KENYA OKONJO, LINDA ACHIENG Small and medium size enterprises are an integral part of a growing economy; According to Uasin Gishu County records there are 1611 registered SMEs in Eldoret Town. The focus therefore, should be directed at the establishment of the growth of the sector; hence the need to establish the effect of strategic leadership styles on innovative performance for small and medium enterprises in Uasin Gishu County. Proper strategic leadership is an essential part of decision making to ensure short term success and long-term sustainability, given the current volatile business environment. The study was guided by the following objectives; to establish the effect of transformational leadership style, transactional leadership style, inspiration leadership style and paternalistic leadership style on SME innovation performance within Uasin Gishu County. The population of study comprised 1611 registered SMEs in Uasin Gishu County. Cluster sampling technique to select the SMEs was used to select a sample of 290 respondents. Collection of primary data was done through a structured questionnaire. Data analysis was facilitated by use of Statistical Package for Social Science (SPSS) version 24 to generate the means, standard deviation and variances which were presented using tables, frequencies and percentages. A descriptive method was employed in analyzing qualitative data where frequencies and proportions were used in interpreting the respondent’s perception of issues that were raised in the questionnaires. Correlation analysis was used to establish the strength of association between variables and regression to determine the relationship between variables. The study findings revealed that there was positive linear effect of transformational leadership style on innovation performance in small and medium enterprises within Uasin- Gishu County (β1=.119, p=0.041). Transactional leadership style has a positive and significant effect on innovation performance in small and medium enterprises within Uasin- Gishu County (β2=.157, p=0.002). Inspirational leadership style was found to have a positive and significant effect on innovation performance in small and medium enterprises within Uasin- Gishu County (β3=.258, p=0. 000). Paternalistic leadership style was found to have a positive and significant effect on innovation performance in small and medium enterprises within Uasin- Gishu County (β4=.271, p=0.000). The study concluded that transactional, inspiration and paternalistic leadership style had a positive influence on SME innovation performance within Uasin Gishu County. The study recommends that SMEs within Uasin Gishu County adopt leadership style which allows managers to make employees feel valued and comfortable in their respective duties which helps bring out the best in them to achieve their goals and personal growth.

EFFECT OF TAXATION AND PORTFOLIO STRUCTURE ON PORTFOLIO INCOME: A CASE OF NATIONAL BANK OF KENYA

Thu, 01 Jan 2015 00:00:00 GMT

EFFECT OF TAXATION AND PORTFOLIO STRUCTURE ON PORTFOLIO INCOME: A CASE OF NATIONAL BANK OF KENYA KIMELI, KERING ABEDNEGO At the heart of portfolio planning is portfolio incomes which are basically determined by portfolio capital and the tax impact. The need to hold portfolios by doing portfolio analysis to take account the scarce resource of capital and the nature of taxes. The Bank has major investments in five portfolios that include; Cash and Cash equivalents, Loans and Advances, Government Securities, Foreign Exchange and Rental Income. The study aimed to evaluate the effect of taxation on portfolio income, examine the effect of capital on portfolio income and assess the simultaneous effect of tax and capital on portfolio income of the Commercial Banks. The study was guided by Arbitrage Pricing Models, Modern Portfolio Theory, Optimal Taxation Theory and Static Trade-off Model. The study used descriptive research design. The data were extracted from the Annual Financial Reports for the years 2009 to 2013. The data extracted were quantitative in nature. This study employed the use of data tables to extract secondary data from the Annual Financial Reports. Data collected was analyzed using Linear and multiple regression analysis. In addition correlation analysis was employed to show the association among the income, tax and capital. Findings showed that tax has a negative and significant effect on income with a beta value of β1 = -0.15 (p-value = 0.012 which is less than α = 0.05). The findings also showed that the standardized coefficient beta and p value of capital were positive and significant (beta = 0.940, p < 0.05). Also, for each unit increase in capital, there is 0.940 unit increases in income. The study concludes that taxes reduce portfolio income while capital does not have an effect on income. The Commercial Banks should invest in tax efficient assets that have optimal taxes and optimal capital employment.

DETERMINANTS OF TAX COMPLIANCE AMONG THE RENTAL INCOME OWNERS WITHIN ELDORET TOWN

Wed, 01 Jan 2014 00:00:00 GMT

DETERMINANTS OF TAX COMPLIANCE AMONG THE RENTAL INCOME OWNERS WITHIN ELDORET TOWN KOGO, TIMON KIPLETING The main issue faced by all tax authorities is that it has never been easy to persuade all taxpayers to comply with the regulations of a tax system. Real estate sector is one of the fastest growing sectors of the economy in Kenya yet taxes collected from this sector have continually been on decline for the last five years. The study analyzed the determinants of tax compliance among the rental income owners in Eldoret town. The objectives of the study were to analyze the factors that influence tax compliance among the rental income owners, access the; effect of perceived fairness of tax system on tax compliance, the effect of tax audit on tax compliance, determine the simplicity of the tax system and to establish the effect of level of income on tax compliance. The target population of this study comprised of 1200 individuals owning rental houses. The study adopted an explanatory design and stratified and random sampling technique was used to select a sample size of 300 individuals owning rental houses The study used frequencies and percentage to analyze demographic data, while means and standard deviations were used to give general information on perceived fairness of tax system, tax compliance and level actual income, at 0.05% level of significance. Pearson correlation was used to provide linear relationship for the variables while multiple regression model was used to test the hypothesis. This was done with aid of SPSS version 20. Data was collected through the use of questionnaires. The findings of the study showed that perceived fairness of tax incentives had positive effect on tax compliance (β1=0.317, ρ<0.05). Tax audit, had highest positive effect on tax compliance (β2=0.331, ρ<0.05). The level of income (β3=0.111, ρ<0.05) and structure of the tax system (β4=0.194, ρ<0.05) had positive effect on tax compliance. The study concludes that perceived fairness of the tax system is associated with high levels of tax compliance. Tax audit was important in improving tax compliance while simplicity in the tax system enhances tax compliance. Level of actual income determines tax compliance. It is concluded that the tax system be fair to all individuals at all income levels, tax system should provide a clear and simple guideline on how to fill tax returns so that individuals who are not well educated are able to fill their tax returns. The tax system should target individuals at all levels of income in order to avoid tax evasion and tax audits impacts highly on tax compliance. This study contributes to current global literature in this field of the relative importance of tax knowledge in affecting tax compliance, as well as exploring the factors that make people avoid tax and methods of increasing voluntary compliance.