Financial Resource Mobilization Strategies, Intellectual Capital And Financial Sustainability Of Universities In Kenya

Abstract

Universities in Kenya, both public and private, are increasingly facing financial distress arising from declining government capitation for public universities, delayed or non-remittance of funds for government-sponsored students in private universities, rising operational costs, growing debts, and deteriorating infrastructure. These challenges have made financial sustainability a central concern in the higher education sector. Achieving this sustainability requires universities to diversify revenue sources while maintaining educational quality and institutional stability. This study examined the influence of financial resource mobilization strategies on the financial sustainability of universities in Kenya and the moderating effect of intellectual capital. The specific objectives were to determine the influence of business units, financial management practices, endowment fund mobilization, and investment in technology-enhanced learning on financial sustainability. Anchored in Resource Mobilization Theory and supported by Modern Portfolio Theory, Resource Dependency Theory, and Intellectual Capital Theory, the study adopted a positivist philosophy and employed a mixed-methods approach. A sample of sixty-four universities comprising of thirty-four public and thirty private was drawn from seventy-six chartered universities in Kenya using Yamane’s formula and stratified sampling. Data were collected from two hundred and ninety senior university officers through structured questionnaires and from audited financial statements covering the period 2018–2022. Instrument reliability was confirmed with a Cronbach’s alpha coefficient above 0.9, exceeding the acceptable 0.7 threshold. Data were analyzed using descriptive and inferential statistics, with hypotheses tested through binary logistic regression at a 95% confidence level (α = 0.05). The findings revealed that business units, financial management practices, endowment fund mobilization, and investment in technology-enhanced learning each had a positive and significant effect on financial sustainability (p < 0.05). Intellectual capital significantly moderated these relationships, enhancing the predictive strength of financial resource mobilization strategies. The study concludes that integrating financial resource mobilization with intellectual capital development is vital for institutional resilience and long-term financial stability. It recommends that universities should strengthen entrepreneurial ventures, adopt prudent financial governance, institutionalize endowment management, and invest strategically in technology and knowledge assets to ensure sustainable growth and competitiveness within Kenya’s higher education sector.