School of Business, Economics and management sciences

SUPPLY CHAIN COST OPTIMIZATION, INFORMATION SHARING AND COMPETITIVENESS OF FOOD AND BEVERAGE MANUFACTURING FIRMS IN UASIN GISHU COUNTY, KENYA

Wed, 01 Jan 2025 00:00:00 GMT

SUPPLY CHAIN COST OPTIMIZATION, INFORMATION SHARING AND COMPETITIVENESS OF FOOD AND BEVERAGE MANUFACTURING FIRMS IN UASIN GISHU COUNTY, KENYA KIPTOO, RACHEL JEROTICH The food and beverage processing sector in Kenya are vital to the national economy due to its role in job creation and its contribution to GDP. However, its competitiveness has faced challenges stemming from high operational costs and inefficient supply chain processes. This study examined the moderating effect of information sharing on the relationship between supply chain cost optimization and the competitiveness of food and beverage manufacturing firms in Uasin Gishu County, Kenya. Specifically, the study investigated how inventory management, strategic sourcing, adoption of technology, and logistics costs influence firm competitiveness, and how information sharing moderates these relationships. The study was guided by the Resource-Based View Theory, Lean Manufacturing Theory and Information Sharing Theory. An explanatory research design was adopted, targeting 924 departmental staff across 22 food and beverage firms. A sample of 279 respondents was selected using Yamane’s formula and simple random sampling employed. Data was collected through structured, closed-ended questionnaires, and a pilot study in Nakuru County was conducted to validate the research instrument. Data analysis was performed using SPSS version 25, incorporating both descriptive and inferential statistics, including correlation and hierarchical regression analyses. Findings revealed that inventory management (β1 = 0.152, p = 0.004), strategic sourcing (β2 = 0.173, p = 0.001), adoption of technology (β3 = 0.232, p = 0.001), and logistics cost (β4 = 0.300, p = 0.000) significantly and positively influenced competitiveness. Furthermore, information sharing significantly moderated the relationships between inventory management (β = -0.103, p = 0.002), strategic sourcing (β = 0.059, p = 0.010), technology adoption (β = 0.087, p = 0.009), and logistics cost (β = -0.182, p = 0.002) and competitiveness. The study concluded that effective supply chain practices, enhanced by robust information sharing mechanisms, play a critical role in strengthening firm competitiveness. The study recommends that food and beverage firms adopt modern inventory systems, invest in advanced technologies with adequate employee training, foster long-term supplier relationships, and optimize logistics through lean practices. Importantly, firms should institutionalize information sharing to enhance coordination, responsiveness, and strategic alignment across supply chain functions, ultimately boosting competitiveness and performance. The study's findings would be valuable to food and beverage manufacturing firms by informing managers on optimizing limited resources for competitive advantage through supply chain cost efficiency, guiding the Ministry of Trade in policy formulation within Kenyan borders, and contributing to the broader academic discourse in supply chain management.

EFFECT OF MACROECONOMIC DETERMINANTS ON COUNTY GOVERNMENTS’ INDEBTEDNESS POST-COVID-19 PERIOD IN KENYA

Wed, 01 Jan 2025 00:00:00 GMT

EFFECT OF MACROECONOMIC DETERMINANTS ON COUNTY GOVERNMENTS’ INDEBTEDNESS POST-COVID-19 PERIOD IN KENYA KIPROP, RUTH JEPCHIRCHIR The indebtedness of county governments in Kenya played a critical role in shaping post- pandemic economic stability and development, influenced by several macroeconomic factors. While borrowing helped sustain county operations and resilience during the COVID-19 period, it also amplified fiscal vulnerabilities, including declining tax revenue, rising corruption levels, and increased reliance on credit. Many counties entered a debt cycle exacerbated by high-interest loan borrowing. Between 2020 and 2023, county government expenditures surged to 28% of GDP, rising further to approximately 32.1% by the 2023/2024 financial year. Simultaneously, corruption levels, measured by the average size of bribes paid to access public services, increased from Ksh 4,600 in 2019 to Ksh 7,800 in 2021 and remained high at Ksh 7,300 through 2023. This persistent rise in corruption undermined public trust, inflated the cost-of-service delivery, and likely escalated borrowing as counties struggled to fill widening fiscal gaps. In the same period, county own-source revenues, measured as a percentage of total revenue, declined, with many counties reporting shortfalls. As of the first half of the 2023/2024 fiscal year, county governments had accumulated pending bills totalling Ksh 156.34 billion. The study’s overall objective is to examine the effect of macroeconomic determinants on county governments’ indebtedness in post-COVID-19 Kenya, focusing on economic growth, tax revenue, government expenditure, and corruption levels. Anchored on the Keynesian Consumption Theory and Debt Accumulation Theory, the study employed a descriptive and explanatory research design using panel secondary data from 47 counties for 2020/2021 to 2023/2024. Analysis involved descriptive statistics, Pearson correlation, and panel regression .The descriptive statistics indicated that, on average, GDP growth stood at 3.4%, tax revenue at 17.2%, county governments’ expenditure at Ksh 53.9 billion, corruption levels at Ksh 23,500, and county governments’ indebtedness at Ksh 2.18 billion between 2020 and 2024. Pearson correlation analysis revealed that county debt was positively associated with GDP growth (r = 0.492), tax revenue (r = 0.427), government expenditure (r = 0.668), and corruption (r = 0.354). To determine the appropriate model, the Breusch–Pagan Lagrange Multiplier (LM) test was conducted, which rejected the null hypothesis that Pooled OLS is sufficient (LM = 27.386, p < 0.001), suggesting that panel data models RE was more suitable. The F-test for Fixed Effects also rejected the null hypothesis that all county-specific intercepts are equal (F = 12.45, df = 46,138, p < 0.05), confirming the presence of significant county-specific effects and the inadequacy of the Pooled OLS model. The Hausman Specification Test (H = 11.752, df = 4, p = 0.05) rejected the null hypothesis, indicating that county-specific effects were correlated with the regressors. This led to the selection of the Fixed Effects (FE) model as the preferred specification. The Fixed Effects model revealed that government expenditure (β = 0.1724, p < 0.01) and corruption (β = 0.2611, p < 0.05) had positive significant effects, tax revenue had a positive significant effect (β = 0.2982, p < 0.05), and GDP growth was statistically insignificant (β = -0.0284, p = 0.05). The study concludes that excessive spending and corruption are the main drivers of post-COVID-19 county indebtedness. It recommends enhancing fiscal discipline, enforcing strict expenditure controls, strengthening anti-corruption measures, and improving own-source revenue mobilization to reduce debt reliance and ensure sustainable county financing.

FINANCIAL INCLUSION, COMPETITIVE LANDSCAPE AND ORGANIZATIONAL PERFORMANCE OF SELECTED COMMERCIAL BANKS IN UASIN GISHU COUNTY

Wed, 01 Jan 2025 00:00:00 GMT

FINANCIAL INCLUSION, COMPETITIVE LANDSCAPE AND ORGANIZATIONAL PERFORMANCE OF SELECTED COMMERCIAL BANKS IN UASIN GISHU COUNTY JEPCHIRCHIR, VALLARY Organizational performance in Kenya continues to face challenges, as evidenced by a consistent decline in return on investment. For example, the Return on Assets (ROA) in the Kenyan banking sector dropped from 3.2% in 2022 to 2.8% in 2023, reflecting reduced profitability. The purpose of the study was to investigate the financial inclusion and organizational performance of selected commercial banks in Uasin Gishu County. The study was guided by four specific objectives; to investigate the influence of financial literacy, technology adoption, lending practices, and income levels on organizational performance of selected commercial bank, and a moderator to determine the influence of competitive landscape on the relationship between financial inclusion and organizational performance of selected commercial banks. This study was guided by the following theories; the systems theory of financial inclusion, organizational performance theory, and competitive/market landscape theory. The study adopted explanatory research design. The study targeted 748 employees. This study employed a stratified random sampling to select a sample of 261 respondents determined by Yamane formula. The study used questionnaires as the data collection tool. The study tested for reliability and validity and pilot study carried out in Nakuru County. Both descriptive and inferential statistics were utilized. Multiple regression analysis was used to determine the effect of financial inclusion on organizational performance whereas hierarchical multiple regression was adopted to test for the moderating effect. Results showed that a positive and significant effect of financial literacy (β = 0.289, p < 0.001), technology adoption (β = 0.161, p = 0.004), lending practices (β = 0.325, p < 0.001) and income levels (β = 0.122, p = 0.029) on bank performance. Hierarchical regression showed that competitive landscape significantly moderates the relationship between financial literacy and organization performance (β = 0.56, p < 0.05, R2Δ = 0.11), relationship between lending practices and the organizational performance of commercial banks (β = 0.53, p < 0.05, R2Δ = 0.08), and relationship between income levels and the organizational performance of commercial (β = 0.37, p < 0.05, R2Δ = 0.030). However, findings indicated that the competitive landscape does not significantly increase the explained variance of technology adoption on bank performance (β = 0.33, p > 0.05, R2Δ = 0.000). In conclusion, the study asserts that financial literacy, technology adoption, lending practices, and income levels are essential aspects of financial inclusion that significantly enhance organizational performance. Additionally, the competitive landscape plays a crucial role in shaping this relationship. Based on these findings, the study recommends that regulators implement standardized financial literacy programs to empower consumers. It is also essential to encourage the adoption of technological tools, ensuring the availability of user-friendly mobile and online banking platforms. Furthermore, banks should develop clear communication strategies that clearly outline lending processes and conditions. Conducting thorough market research to understand the diverse financial needs of various income segments is vital for creating suitable financial products, such as affordable loans and savings plans. Finally, banks should regularly perform competitive analysis to remain informed about market trends and competitor strategies, which can help them effectively, navigate the evolving financial landscape.

MODERATING EFFECT OF FINANCIAL LITERACY ON THE RELATIONSHIP BETWEEN ORGANIZATIONAL CULTURE AND FINANCIAL PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN NANDI COUNTY, KENYA.

Wed, 01 Jan 2025 00:00:00 GMT

MODERATING EFFECT OF FINANCIAL LITERACY ON THE RELATIONSHIP BETWEEN ORGANIZATIONAL CULTURE AND FINANCIAL PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN NANDI COUNTY, KENYA. KEMBOI, PHILIPH KIMUTAI Small and Medium Enterprises sector is a key driver of Kenyan economy as it contributes to the Gross Domestic Product and creates 80% of employment. However, most new businesses end up failing within their early years of operations because of their dismal financial performance. The main aim of the study is to examine the moderating effect of financial literacy on the relationship between organizational culture and financial performance of small and medium sized enterprises in Nandi County, Kenya. The specific objectives are to determine the effects of clan, hierarchy, adhocracy and market cultures on financial performance of small and medium sized enterprises in Nandi County, Kenya. Furthermore, the study examines the moderating effect of financial literacy on the relationship between clan, adhocracy, market, hierarchy cultures and financial performance of Small and Medium Enterprises. Resource Based View, Dual process and Agency Theories guided the study. The study utilized explanatory research design and cluster sampling technique to collect data from a sample size of 376 Small and Medium Enterprises obtained by use of Yamane formula from a target population of 6347 registered Small and Medium Enterprises in Nandi County, Kenya. Primary data was collected using self-administered closed- ended questionnaire. Cronbach’s alpha coefficient was used to test reliability and factor analysis to test the validity of research instruments. Data was analyzed through SPSS Version 23. Correlation and hierarchical regression analysis was used to ascertain the strength and direction of relationships between variables. The study findings indicated that Clan culture (β= 0.322, p=0.000), Adhocracy culture (β = 0.255, p=0.000), Market culture (β=0.140, p=0.012) and Hierarchy culture (β = 0.200, p = 0.000) had a positive and significant direct effect on financial performance. Results of the control variables indicate that firm age (β=.136, P = .045) significantly influences financial performance while firm size (β=.012, P=.898) does not. These control variables explain 1.2% of the variance in financial performance (R2 of .012 and ∆R 2 = 0.12). Additionally, the findings of the study revealed that financial literacy moderates the relationship between clan culture, (β = -0.157, p = 0.000, R2 = 0.618, ∆R2 = 0.032), adhocracy culture (β = 0.156, p = 0.011, R 2 = 0.625, ∆R2 = 0.007), hierarchy culture and financial performance (β = -0.186, p = 0.026, R2 = 0.631, ∆R2 = 0.006). Findings further revealed that Financial Literacy does not moderate the link between market culture and SME’s performance (β = -0.029, p = 0.688, R 2 = 0.625, ∆R2 = 0.000). ∆R2 indicates the variance in financial performance that moderation process accounts for. The study provides new knowledge to the literature that financial literacy moderates the relationship between clan culture and financial performance, adhocracy culture and financial performance, and lastly, hierarchy culture and financial performance. The findings help the owners/managers in developing strategies to cultivate financial literacy and supportive culture, policy makers to formulate policies to enhance financial literacy, manage culture to achieve sustainable improvement in financial performance of SMEs. Further study should be undertaken using longitudinal research so as to allow researchers to look at changes over time in regards to organizational culture.

MODERATING EFFECT OF DIGITAL FINANCE SERVICE ON THE RELATIONSHIP BETWEEN FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF SELECTED SMEs IN ELDORET CITY, KENYA.

Wed, 01 Jan 2025 00:00:00 GMT

MODERATING EFFECT OF DIGITAL FINANCE SERVICE ON THE RELATIONSHIP BETWEEN FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF SELECTED SMEs IN ELDORET CITY, KENYA. JEPLETING, GLADYS Financial performance refers to the measure of how well a company is using its assets to generate revenue, profit, firm credibility, and value for shareholders and its ability to pay off debts. Challenges affecting SMEs financial performance include poor financial management, lack of technological skills and enough resources. As a result, it was necessary to investigate the moderating effect of digital finance service on the relationship between financial management practices and financial performance of selected SMES in Eldoret city, Kenya. The specific objectives of the study were to examine the effect of cash flow management, budget planning, investment decision and digital financial services on financial performance of selected SMEs. In addition, the study sought to examine the moderating effect of digital financial services on the relationship between; cash flow management, budget planning, investment decision and financial performance of selected SMEs. The research was guided by the priority- based budgeting theory, modern portfolio theory and resource-based theory. The study utilized explanatory research design. Target population was 1236. Simple random sampling techniques was utilized to collect data from 302 selected SMEs using self- administered questionnaires. Cronbach alpha was applied to test reliability while factor analysis was applied to test construct validity. Hierarchical regression analysis was employed to examine direct and moderating effects, with firm age and firm size controlled as covariates. The findings indicate that firm age has a statistically significant positive effect on financial performance (β=0.282, p=0.022), whereas firm size does not (β=0.070, p=0.149) affirming the need to control these variables. The study revealed that cash flow management (β=0.237, p=0.000), budget planning (β=0.364, p=0.000), and investment decision (β=0.366, p=0.000) positively influence financial performance, collectively accounting for 71% of the variance (R2=0.742, ∆R2=0.713, p≤0.05). The study further examined the direct effect of digital finance services on financial performance, with results showing a positive and significant influence (β=0.137, p=0.007), contributing an additional 1% variance (∆R2=0.007) to the model. However, digital finance services did not moderate the relationship between cash flow management and financial performance (β=0.002, p=0.852), indicating no significant interaction (∆R2=0.000). Conversely, digital finance services significantly moderated the relationship between budget planning and financial performance (β=-0.049, p=0.000, ∆R2=0.016), and between investment decision and financial performance (β=0.035, p=0.042, ∆R2=0.003), resulting in a combined explained variance of 80% in financial performance (R2=0.798). The study provides valuable insights for SME managers, policymakers, and financial institutions, emphasizing the importance of targeted digital finance tools to optimize financial management practices and support SME growth. SMEs owners or managers should assess and adopt digital finance solutions that align with their financial management practices.

INFLUENCE OF E-LOGISTICS ON SUPPLY CHAIN PERFORMANCE OF MANUFACTURING FIRMS, IN UASIN GISHU COUNTY, KENYA. MODERATED BY ELECTRONIC RESOURCE PLANNING

Wed, 01 Jan 2025 00:00:00 GMT

INFLUENCE OF E-LOGISTICS ON SUPPLY CHAIN PERFORMANCE OF MANUFACTURING FIRMS, IN UASIN GISHU COUNTY, KENYA. MODERATED BY ELECTRONIC RESOURCE PLANNING CHEPKEMOI, CLARA Supply chain performance is crucial for businesses to increase efficiency, reduce expenses, and meet changing client needs in a competitive environment. However, manufacturing firms in Kenya face challenges such as competition, high production costs, and untimely product availability. This study aimed to examine the moderating influence of Enterprise Resource Planning (ERP) on the relationship between e- logistics and supply chain performance of manufacturing firms in Uasin Gishu County, Kenya. Specific objectives were to assess the influence of electronic order processing, transportation management, automated warehousing, inventory management, and enterprise resource planning systems on supply chain performance. The study further assessed the moderating influence of enterprise resource planning on the relationship between electronic order processing, transportation management, automated warehousing, inventory management systems, and supply chain performance of these firms. The study was guided by Resource-Based, Innovation, and Transaction Cost Theories. Explanatory research design and a census approach were adopted in collecting data using a closed-ended questionnaire from 270 Heads of 9 Departments closely linked to the study variables in 30 manufacturing firms. Cronbach’s alpha and factor analysis were used to assess reliability and construct validity. Data analysis was performed using descriptive and inferential statistics, with a hierarchical regression model used to test all the study hypotheses. Results indicate that firm age (β=0.190, p = 0.021) significantly influences supply chain performance while firm size (β=0.101, p=0.223) does not. These control variables explain 4.8% of the variance in supply chain performance, as shown by an R2 of 0.048. Findings further revealed that electronic order processing system (β1=0.316, p=0.001), transportation management system (β2=0.167, p=0.011), automated warehousing systems (β3=0.217, p=0.008), and inventory management system (β4=0.232, p=0.001) significantly influence supply chain performance. These variables explain 56.6% of the variance in supply chain performance (R2 = 0.566 inclusive of the controls) and 51.8% (∆R2 = 518 exclusive of the controls). Results further indicate that ERP (β=0.094, p=0.010), influences supply chain performance. It explains 1.2% of the variation in supply chain performance (∆R2 =0.12). Furthermore, ERP was found to moderate the relationship between electronic order processing system (β=0.100, p=0.000), transportation management system (β=0.054, p=0.012), inventory management system (β=-0.120, p=0.002), and does not moderate the link between automated warehousing system and supply chain performance (β=-0.013, p=0.701). The entire Hierarchical model accounts for 64.5% (R2 = 0.645) of the variance in supply chain performance, much more than the direct effect model, which explains 56.6% (R2 = 0.566). The study concludes that electronic order processing, transport management, automated warehousing, inventory management systems, and ERP influence supply chain performance. ERP moderates the link between electronic order processing, transport management, inventory management systems, and supply chain performance, but does not moderate automated warehousing systems and supply chain performance. This study contributes to knowledge by examining the interaction of ERP and study variables. Future scholars will benefit from the study's findings as they conduct new research in e-logistics and supply chains in various industries. The policymakers and management may use the results to develop policies and strategies for investing in e-logistics and ERP, as these enhance efficiency in supply chain performance.

EFFECT OF PUBLIC DEBT, EXPORT TO GDP RATIO AND GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN KENYA

Wed, 01 Jan 2025 00:00:00 GMT

EFFECT OF PUBLIC DEBT, EXPORT TO GDP RATIO AND GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN KENYA CHEWOREI, PETER PTENGWER An investigation into the growth of GDP and public debt in Kenya shows that during the period 1963 to 2008, the economy experienced cyclical booms and depressions with the economic booms in mid 1970s, late 1980s, and early 2000s, as well as global economic depressions in early 1980s, early 1990s and in 2008. As a result, the Kenyan government turned to external and domestic borrowing during these periods to plug the budget deficits, which has contributed immensely on the country negatively and this has led to high dependency ratio as compared to the previous years. The study sought to assess the effect of domestic borrowing, external borrowing, export to GDP ratio as well as government expenditure on economic growth in Kenya. The study was anchored on the Keynesian theory of economic growth and the dynamic theory of public spending to establish the effect of public debt on Kenya’s economic growth by conducting longitudinal research design on quarterly secondary time series data from the treasury for the period 1988-2018. The study employed the autoregressive distributed lag (ARDL) regression model to carry out analysis using STATA version 15 software at five percent significance level. The study found that there exists a significant inverse short-term relationship between economic growth and domestic debt where one percent increase in domestic debt causes 1.25 percent decline in Kenya's economic growth (β =1.25342, p < 0.05). The findings of the study shows that one percent increase in external debt causes 1.10 percent decline in economic growth in Kenya (β =1.09536, p < 0.05), and 1.745 positive relationship between export to GDP ratio and economic growth in Kenya (β =1.74536, p < 0.05) whereas government expenditure has a significant short-run, positive relationship with economic growth in Kenya with a correlation coefficient of 1.4537 β =1.493762, p < 0.05. The study concluded that Kenya's economic growth is significantly correlated with all four explanatory variables. Based on the study findings, it was recommended that to ensure a steady economic growth in the country, both external and domestic debt stocks should be kept at manageable levels, while government expenditures remain sustainable.

EFFECT OF MACROECONOMIC VARIABLES ON PUBLIC HEALTH EXPENDITURE IN KENYA

Wed, 01 Jan 2025 00:00:00 GMT

EFFECT OF MACROECONOMIC VARIABLES ON PUBLIC HEALTH EXPENDITURE IN KENYA NYABOGA, CYNTHIA KWAMBOKA Health spending is a major concern in low- and middle-income countries because of the less finances allocated in the health sector. One of the main goals of the Kenyan government's "big four" development strategy, which is scheduled for completion by 2022 and was achieved in some few counties in 2023 is universal health care. Health has consistently been prioritized over time and has occupied a central position in political campaign platforms. The government has consistently spent huge amount of money into the health sector. In Kenya, majority of people depend on public insurance and only a very small portion of Kenyans can afford to have access to the private insurance and out of pocket payment, this has led to increased level of poverty and higher dependency ratio. Despite all these efforts, Kenya still has challenges in the allocation of public health expenditure. The purpose of this study was to ascertain how macroeconomic factors affected Kenya's public health spending. This study aimed to establish effects of GDP per capita, corruption, unemployment fiscal deficit and tax revenue on public health expenditure in Kenya. The key theoretical anchors of the study are Public Expenditure theory and Wagner’s theory. Explanatory research design was used. Secondary data from the Kenya National Bureau of statistics (KNBS) was used with annual time series data spanning from 1990 to 2023. The data was subjected to stationarity test using Augmented Dickey Fuller (ADF) test, Phillips and Perron (PP) and Kwiatkowski–Phillips–Schmidt– Shin (KPSS) for unit root test. The study employed Autoregressive Distributed Lag model (ARDL) to evaluate the relationship among the variables. The long run ARDL analysis revealed that the coefficients of; corruption -2.231 (p-value 0.002<0.05), per capita gross domestic product 0.001(p-value 0.02<0.05), tax revenue 0.075(p-value 0.025<0.05), and unemployment 0.227(p-value 0.03<0.05) significantly affected public health expenditure in Kenya. However, the fiscal deficit was found to be insignificant in the long run 0.008(p- value 0.914>0.05). To ensure prudent public health expenditure in Kenya, the study recommends strengthening anti-corruption laws, maintaining fiscal discipline through effective budgeting, promoting per-capita economic growth by boosting productivity and investments. Optimizing tax revenue through efficient policies and broadening the tax base is vital to fund public services. Addressing unemployment by creating jobs and investing in education is crucial for effective use of the labor force.

EFFECT OF MACROECONOMIC VARIABLES ON EXCHANGE RATE VOLATILITY IN KENYA

Wed, 01 Jan 2025 00:00:00 GMT

EFFECT OF MACROECONOMIC VARIABLES ON EXCHANGE RATE VOLATILITY IN KENYA KINUTHIA, JOSEPH NGIGI Foreign direct investment, government expenditure, public debt, inflation rate, interest rates, and money supply are essential macroeconomic variables that can alter currency volatility and its impact on the Kenyan economy. The exchange rate of the Kenyan shilling has exhibited significant volatility against major currencies such as the US dollar. In 2022, the KES depreciated by an average of 0.6% monthly. This trend intensified in early 2023, with average monthly depreciation rates reaching 4%, and some months witnessing increases of up to 6%. By October 2023, the exchange rate reached KES 148.4 per US dollar, up from KES 120.8 in early 2022, marking a 13% depreciation in 2023. In January and February 2024, the KES continued to weaken, exceeding KES 160 and 163.98 per US dollar, respectively. This sharp fluctuation in the Kenyan shilling highlights concerns about currency stability. The objective of this study was to examine the effect of foreign direct investment, government expenditure, public debt, inflation rates, interest rates, and money supply on exchange rate volatility in Kenya. The study was informed by the Purchasing Power Parity Theory, the General Equilibrium Theory of Exchange Rate Determination, the International Fisher Effect theory, and the Interest Rate Parity theory. The study used an explanatory research design, analysing annual secondary data from 1971 to 2024. Data was collected using a structured review matrix and tested for stationarity and cointegration before analysis using descriptive statistics and the ARDL model. Descriptive statistics results showed that the average FDI, government expenditure, and public debt were 0.71, 15.68% and 47.60% respectively. Interest rates, inflation rate, and money supply growth averaged 6.20%, 11.31% and 34.77%, respectively. Inferential results revealed that in the long run, a unit increase in foreign direct investment and government expenditure reduced exchange rate volatility by 36.4% and 341.5%, respectively, while inflation and money supply increased it by 55.2% and 239.7%, respectively. Short-run results showed that a 1% increase in FDI, money supply, and inflation rate increased volatility by 18.31%, 19.26%, and 111.83%, respectively, while government spending and public debt reduced volatility by 90.65% and 42.18%, respectively. To reduce or stabilise exchange rate volatility, the study recommended a combination of monetary policy interventions to policymakers. These included foreign exchange operations, interest rate adjustments, hedging strategies, and export diversification. Additionally, the central bank is advised to regulate the growth of the money supply to prevent excessive inflation and currency depreciation, which could exacerbate exchange rate fluctuations.

MODERATING EFFECT OF SELF-CONTROL ON THE RELATIONSHIP BETWEEN FINANCIAL LITERACY AND RETIREMENT PLANNING AMONG COMMERCIAL BANK EMPLOYEES IN ELDORET CITY, KENYA

Wed, 01 Jan 2025 00:00:00 GMT

MODERATING EFFECT OF SELF-CONTROL ON THE RELATIONSHIP BETWEEN FINANCIAL LITERACY AND RETIREMENT PLANNING AMONG COMMERCIAL BANK EMPLOYEES IN ELDORET CITY, KENYA CHESEREK, GLADYS Retirement planning, defined as a goal-oriented behavior where individuals devote effort to prepare for their retirement life, can effectively reduce retirement worry, keep stress under wraps, and enhance retirement preparedness and confidence. However, there is little literature about retirement planning among employees working in Kenyan Commercial banks. To fill this gap, this study aimed to establish the moderating effect of self-control on the relationship between financial literacy and retirement planning among commercial bank employees in Kenya. The study was guided by the following specific objectives: to assess the effect of financial knowledge, financial behavior, financial attitude, and self-control on retirement planning among commercial bank employees in Eldoret City, Kenya. In addition, the study examined the moderating effect of self-control on the relationship between financial knowledge, financial behavior, financial attitude, and retirement planning. This study was guided by goal- setting theory, social cognitive theory, and behavioral life cycle theory. The study adopted an explanatory research design, with data being collected from a target population of 1058 employees of 32 commercial banks in Eldoret town. A sample size of 290 respondents was obtained using Yamane’s formula. The study used systematic sampling techniques to select employees as respondents. Data was collected using a structured, closed-ended questionnaire. The researcher ensured the reliability of the research instrument through a pilot study and further confirmed it with Cronbach's alpha, which was above the score of 0.7. Construct validity was assessed using factor analysis, while content validity was assessed by having supervisors and experts in the field review the test items to make sure they were relevant and representative of the content that was being measured. Descriptive and inferential statistical analyses were conducted using SPSS (Statistical Package for the Social Sciences) version 25, with study hypotheses tested through a hierarchical regression model. It was found that Financial Knowledge had a significant positive impact on retirement planning (β = 0.402, p < 0.05), confirming that employees with better financial knowledge are more likely to plan effectively for retirement. Financial Behavior also showed a positive and significant influence on retirement planning (β = 0.182, p < 0.05), indicating that prudent financial actions enhance retirement preparedness. Financial Attitude similarly exhibited a significant positive effect on retirement planning (β = 0.267, p < 0.05). Self- control not only directly impacted retirement planning (β = 0.174, p < 0.05) but also moderated the relationship between financial knowledge (β = 0.120, p < 0.05), financial behavior (β = 0.099, p < 0.05), financial attitude (β = -0.047, p < 0.05), and retirement planning. The study concludes that self-control moderates the relationship between financial knowledge, financial behavior, financial attitude, and retirement planning among commercial bank employees in Eldoret City, Kenya. The results of this study can be used by practitioners and policymakers in developing strategies and formulating policies for retirement systems in the workplace. The findings contribute knowledge to the literature and theory related to financial literacy, self-control, and retirement planning.