School of Business and Economics
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Welcome to School of Business and Economics collection.This collection contains Journal articles published by faculty affiliated to the school.
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Item The Effect of Knowledge Acquisition on Organizational Performance of Selected Humanitarian Organizations in Marsabit County Kenya.(International Journal of Research Publication and Reviews, 2024-06) Abdinoor, Basma Shariff; Mutea, Fredrick; Kanyiri, AdelThe potential for employing knowledge acquisition to enhance organizational performance is expanding exponentially, especially during a time of rapid technological progress. Knowledge acquisition can play a critical role in both preventing humanitarian disasters and building capacities for better disaster response. Additionally, it can improve coordination and communication in emergencies. This study aimed to assess the effect of knowledge acquisition strategies on the performance of selected humanitarian organizations in Marsabit County, Kenya. The study drew on Knowledge-Based View Theory. A descriptive research design was used, and the target population consisted of 386 employees working in the selected humanitarian organizations in Marsabit County. The participant pool, consisting of 112 respondents, was established utilizing the Yamane formula. Direct data was gathered via questionnaires, implemented through the drop-off/pickup technique to engage with the respondents. Utilized methodologies encompassed descriptive statistics, featuring average and standard deviation, and inferential statistical techniques like correlation analysis and multiple linear regression. The outcomes are illustrated via a variety of tables and visual diagrams, followed by a comprehensive interpretation of the findings. The study concludes that knowledge acquisition impacted the performance of humanitarian organizations in Marsabit County. The study recommends that humanitarian organizations engage with technical experts in specific fields for knowledge acquisition and value their employees.Item Business Process Reengineering Effects on Financial Performance of Commercial Banks in Meru County, Kenya(International J ournal of Professional P ractice (IJPP), 2023-09) Jepleting, Kipkorir Janet; Mutea, Fredrick; Moguche, AbelFinancial sector is one of the fundamental dimensions of economic expansion and evolution. Financial institutions remain indispensable because of the role they play. In Africa, however, commercial banks have been reducing in number owing to tightening regulations, mergers, acquisitions, liquidations and collapses. On the same vein, Kenyan banking sector has recently encountered diverse experiences from new threats such as increasing inflationary pressure, worries about the sustainability of the public debt, a shaky economic recovery, and volatility in financial markets and devastating impact of COVID-19. Collectively, these make it difficult for the local banks to achieve optimum financial returns. The study aimed to determine how business process reengineering (BPR) affects performance of commercial banks in Meru County, Kenya. The objective was to determine effects of BPR on performance of commercial banks in Meru County. The study moored on Technology Adoption model. It employed descriptive research survey design with a target population of sixty (60) branch management staff comprising of three participants from each of the 20 commercial banks in Meru County. Additionally, the study adopted census approach and structured questionnaires to collect data. Descriptive statistics; mean and standard deviation coupled with linear regression were used to analyze data. Data was presented in tables. It was concluded that BPR enhanced financial performance of commercial banks. Further, the study recommended that commercial banks strengthen BPR to improve business operations. The study established that BPR, if effectively implemented, was a game changer to commercial banks, since it may reduce process time, simplify and streamline operations, and revamp service quality, thus increased efficiency that results into better services and products. This maximizes return on investment. Studies may be conducted to ascertain benefits and challenges of adopting BPR in commercial banks in Kenya.Item Influence of Liquidity Risk Hedging on Performance of Real Estate Firms in Meru County, Kenya(International J ournal of Professional P ractice (IJPP), 2023-10) Kamari, Mburugu Kenneth; Mutea, Fredrick; Rintari, NancyReal estate investments are long-term and capital intensive projects which outperform other asset classes attracting many investors. Real estate contributes greatly to the gross domestic product of many nations. However, financial risks, such as liquidity risk, may largely affect the performance of real estate firms. Though financial risks are global, Kenya experiences high uncertainty of returns due to market volatility and economic fluctuations. This study aimed to assess the influence of Liquidity risk hedging on the performance of real estate firms in Meru County, Kenya. The study adopted a descriptive survey design, and was anchored on the liquidity preference theory. Questionnaires and secondary data schedules were used to collect data from 24 real estate firms. Using stratified random sampling method, a sample size of 131 officers was derived using Krejcie and Morgan formula. The senior managers and financial, operations, risk, sales and legal officers from the 24 real estate firms constituted the respondents. To test the reliability and validity of the instruments, 14 questionnaires were pretested in 3 real estate firms in Tharaka Nithi County. Data was analyzed through SPSS version 23, and results presented using descriptive and inferential statistics. The results indicated that liquidity risk hedging had the highest positive influence on NOI, ROE, but less influence on ROA. The study recommends that banks and the financial market players train the real estate firms on available financial innovations so as to hedge risks. The findings challenge the existing paradigms and offers a new perspective on the use of derivatives in hedging real estate liquidity risk. This research aligns with the Kenyan government housing project agenda, and provides a platform for a further discussion on pitfalls to avoid in real estate investments, and the available opportunitiesItem Relationship between Real Estate Investment Trusts (REITs) and financial performance of selected investment banks in Nairobi County, Kenya.(International Journal of Finance, 2022-10) Muigai, Peris Wanjiku; Mutea, Fredrick; Rintari, NancyPurpose: To investigate the relationship between real estate mutual fundsinvestment and financial performance of selected investment banks in Nairobi County, Kenya. Methodology: The study used descriptive research design. The target population was 22 investment banks in Nairobi Kenya whose respondents were 75 investment managers, 297 investment officers, 124 risk officers, and 161 quality assurance officers. Simple random sampling method was used to obtain a sample of 7 investment banks whose 22 investment managers, 89 investment officers, 38 risk officers, 48 quality assurance officers were included. This study used a questionnaire and secondary data collection form to gather data. This study conducted a pre-test at two randomly selected commercial banks branch in Meru County. These banks were housing finance bank and Kenya Commercial Bank. Inferential analysis generated included model summary to test the level of influence, analysis of variance to test hypothesis and regression coefficients to test the study’s model. Results: The respondents agreed that there are reliable customer service services that boost client- bank relations which increases the confidence in investing even higher amounts of income towards REITs. (Mean-3.23). Despite that, respondents disagreed that investor’s wealth is able to grow especially due to profitable returns they generate as a result of engaging in real estate investment trusts (mean-2.23). In addition, the respondents disagreed that banks promote cultural and religion inclusivity by including products such as Islamic real estate investment trusts to incorporate Islams (mean-2.45). The model summary indicated that real estate investment trusts had an R-0.589 and an R-square of 0.347. This indicated that real estate investment trusts influenced 35% of financial performance. Durbin Watson’s value of 1.980 indicated a positive auto-correlation. The ANOVA analysis indicated that real estate investment trusts had an F-statistic of 7.033 and significance level of 0.009 which was below 0.05. There was a relationship between REITs and financial performance. The bank’s rate of return was low due to high price volatility. Investor’ high demand as compared to the supply of REITs by real estate sector played a significant effect on its prices. In addition, the study found out most real estate companies had not set out much REITs which made it tricky for investors to reap maximum returns on them. Unique contribution to theory, policy and practice: Gaps were established on how real estate investment banks would incorporate diversity in their products. For example, the presence of Islamic real estate investment trusts was found to be missing in investment banks due to complicated Sharia laws on how interest should be accrued so that no party loses in the deal (both the banks and the investor). Investment banks management should develop various REITs products which incorporates diversity such as introducing Islamic products. Investment banks should develop partnership opportunities for real estate companies so that they are able to increase their investment products baskets. CMA should extend a hand to investment banks and firms so that they get appropriate prices on various REITs.Item Assessment of the Effect of Social Participation on Financial Inclusion of Northern Rangeland Trust women groups, Kenya.(International Journal of Finance, 2022-10) Ali, Fatuma Hussein; Mutea, Fredrick; Moguche, AbelPurpose: To assess the effect of social participation on financial inclusion of Northern Rangeland Trust women groups, Kenya. Methodology: The current study used descriptive research design to collect quantitative and qualitative data. The target population was 10 women groups registered in Northern Rangeland Trust in Laikipia County. The respondents were 10 chairladies, 10 secretaries, 10 treasurers, and 152 women members. Women group leaders were interviewed while the women who were members of self-help groups answered the questionnaire. The study conducted pre-test on 1 women group in Samburu County selected using simple random method. The study also sampled 1 chairlady, 1 secretary, 1 treasurer and 15 women members. Chairladies, secretaries and treasurers were selected using purposive sampling method while the members were selected using simple random sampling method. The descriptive statistics such as frequencies, percentages and median were computed. The findings were presented using descriptive tables, figures and narratives for ease of understanding the results. Inferential analysis to be generated included model summary to test the level of influence, analysis of variance to test hypothesis and regression coefficients to test the study’s model. Diagnostic tests such as normality, linearity, multicolinearity, heteroskedasticity, and autocorrelation were tested. The study used multiple regression analysis in order to determine the relationship between linking social capital and financial inclusion of women groups in northern rangeland trust, Laikipia county, Kenya. Results: The results from the questionnaires revealed, 39(29%) and 26(19%) strongly agreed and agreed correspondingly that women groups were able to access to financial services e.g., accounting services at subsidized rates after partnering with NGOs such as NRT. However, 80(60%) and 27(20%) strongly disagreed and disagreed correspondingly that there has been availability of financial opportunities on investments as a result of women groups selling products to internal and external promoters. The R coefficient was 0.863 while R-Square was 0.745. This meant that social networks had a 74.5% influence on financial inclusion. The significance value was 0.009 which was less than 0.05. The study therefore rejected null hypothesis that social participation does not have significant effect on financial inclusion of Northern Rangeland Trust women groups, Kenya. The results from the interviews revealed, the various types of financial knowledge women in groups were bound to get that enabled them have outstanding performances in their projects as book-keeping, reconciliation and auditing. Additionally, the ways that NRT linked women to access financial services included connecting them with various accounting firms, accountants, financial managers and auditors. Further, the selection criteria that they used to rule out women groups that got access to financial opportunities on investments included availability of memorandum of association, group minutes and application status to NRT. Unique contribution to theory, policy and practice: In as much as women were in a position of getting finances, the full access to financial opportunities was limited. This is whereby many groups of women had to rely on few economic activities that were majorly pegged on the directions given by both national and county governments. The study recommends that on social participation, there should be awareness raised by local leaders on available financial opportunities that women would engage locally to raise money. Various non-government organizations should encourage women to start various non-tradition business and explore wider on fields such as forex trading, online jobs, application of both local and international tenders among others. This would give an upper hand towards promoting more financial opportunities.Item Influence of Islamic Auto Financing Instruments on Financial Performance of Commercial Banks in Isiolo County Kenya(International Journal of Finance, 2021) Halake, Abdi Huka; Dr Rintari, Nancy; Mutea, FredrickPurpose: The purpose of the study was to explore the influence of Islamic auto financing instruments on financial performance of commercial banks in Isiolo CountyKenya.Methodology: This study used descriptive research design. The respondents werecustomer service officers and loan officers in the ten commercial banks in Isiolo County. They were be selected using census method.Data collection wasdone using closed-ended questionnaires and secondary data collected through analysis of report from 2017 to 2020. To ensure validity and reliability, pre-testing of questionnaires wasdone at Kenya Commercial Bankin Meru town. Coded data in SPSS 24.0 computer program analyzedquantitative and qualitative data using the descriptive statistics such as mean, percentage and standard deviation. Multiple regression wasused to test hypothesis of the study. Tables, graphs and detailed explanations wereused to present the final results of the study.Results: Options had a statistically significant relationship with financialperformance.The respondents agreed that the lending terms of Islamic automobile financing have attracted diverse clients(mean of 4.78). However, in comparison with other statements, the respondents did not tally that having sharia committee in disbursing car loans hadenabled clients have confidence with the automobile loans(mean of 3.83). The R value was 0.862 and R-square of 0.743. This indicated that Islamic auto financing instruments’ level of contribution towards financial performance was 74.3%. The Durbin-Watson value was 1.969. This value lied between 0 and 2 hence indicating that there was a positive correlation between auto financing instruments and financial performance. The significance value was 0.000 which was below 0.05hence Islamic Auto financing instruments had a significant influence of financial performance. In addition, the respondents did not tally that having sharia committee in disbursing car loans hadenabled clients have confidence with the automobile loans. This proved that the confidence that clients had on auto financing, was not purely on the nature and process of administration of the financingbut also due to reliability.Unique contribution to theory, policy and practice: The study recommends that auto financing should be provided reliably by ensuring all client concerned are amicably handled by the banking staff. The various car loan officer should be trained on good customer service to as to ensure they sell well their products without necessarily losing new clients. The bank management should also diversify auto financing to cater for all categories of vehicles for expansion of their client baseItem The Influence of Internal Audit on Financial Management in Marsabit County Government Kenya(International Journal of Finance, 2021-09) Dambala, Abudo Yohana; Rintari, Nancy; Mutea, FredrickPurpose: The purpose of this study was to determine the effect of internal audit on the financial management in the County Government of Marsabit. Methodology: The study adopted descriptive survey was adopted for this study. The targeted study population was 63 staff members who are Job group K and above from the department of Finance in the directorate of Accounts, Revenue, Procurement and Internal Audit. The study employed simple structured questionnaires to gather primary data which was analyzed using SPSS. Results: The study revealed that internal audit function had a significant influence on financial management at the county government of Marsabit (r=0.691, p=0.00) Unique contribution to theory, policy and practice: Good financial management is very essential in protecting the public funds. This study encourages good practices of accountability, transparency and wealth creation with public funds. The study is beneficial to not only Marsabit County but other counties in Kenya. The study concludes that the Marsabit County has a functional internal audit committee and internal auditors perform their duties with great autonomy and independence. The study further concludes that internal audit has strong positive effect on the financial management in Marsabit County. The study recommends internal audit to be well staffed and resourced so that it is able to carry out regular audits of the county government. This will improve financial management of the County Government since it has been established that internal audit has strong positive effect on the financial management. Additional research can be conducted in the National government on factors influencing financial management and drawing comparisons.Item Influence of Islamic Auto Financing Instruments on Financial Performance of Commercial Banks in Isiolo County Kenya(International Journal of Finance, 2021-09) Halake, Abdi Huka; Rintari, Nancy; Mutea, FredrickPurpose: The purpose of the study was to explore the influence of Islamic auto financing instruments on financial performance of commercial banks in Isiolo County Kenya. Methodology: This study used descriptive research design. The respondents were customer service officers and loan officers in the ten commercial banks in Isiolo County. They were be selected using census method. Data collection was done using closed-ended questionnaires and secondary data collected through analysis of report from 2017 to 2020. To ensure validity and reliability, pre-testing of questionnaires was done at Kenya Commercial Bank in Meru town. Coded data in SPSS 24.0 computer program analyzed quantitative and qualitative data using the descriptive statistics such as mean, percentage and standard deviation. Multiple regression was used to test hypothesis of the study. Tables, graphs and detailed explanations were used to present the final results of the study. Results: Options had a statistically significant relationship with financial performance. The respondents agreed that the lending terms of Islamic automobile financing have attracted diverse clients (mean of 4.78). However, in comparison with other statements, the respondents did not tally that having sharia committee in disbursing car loans had enabled clients have confidence with the automobile loans (mean of 3.83). The R value was 0.862 and R-square of 0.743. This indicated that Islamic auto financing instruments’ level of contribution towards financial performance was 74.3%. The Durbin- Watson value was 1.969. This value lied between 0 and 2 hence indicating that there was a positive correlation between auto financing instruments and financial performance. The significance value was 0.000 which was below 0.05 hence Islamic Auto financing instruments had a significant influence of financial performance. In addition, the respondents did not tally that having sharia committee in disbursing car loans had enabled clients have confidence with the automobile loans. This proved that the confidence that clients had on auto financing, was not purely on the nature and process of administration of the financing but also due to reliability. Unique contribution to theory, policy and practice: The study recommends that auto financing should be provided reliably by ensuring all client concerned are amicably handled by the banking staff. The various car loan officer should be trained on good customer service to as to ensure they sell well their products without necessarily losing new clients. The bank management should also diversify auto financing to cater for all categories of vehicles for expansion of their client base.Item Relationship between Financial Structure and Financial Performance of Listed Firms in Nairobi Securities Exchange in Kenya(International Journal Of Advanced Research in Engineering& Management (IJAREM, 2018) Ngure, Erastus G; Mutea, Fredrick; Muema, WilsonFirms have alternative ways of raising their funds. Corporate financing decisions made by the management leads to a financial structure and improper financing behaviour and decisions can lead to corporate failure. A quagmire exists in the mind of stakeholders and researchers as to whether there exists an optimal financial structure that maximizes shareholders’ wealth. Thus when making financing choices there is need to consider evaluating the effect of the available financing alternatives on the firm’s financial performance. The aim of the study was to examine the relationship between financial structure and financial performance of listed firms in Kenya,by determining the effect of internal financing, equity financing, short term debt and long term debt on financial performance. Descriptive and historical research design was adopted. The study was a census, featuring all the listed companies that were operational from the year 2009 to 2016. Primary data collected by questionnaires and secondary data obtained from NSE handbooks and published financial statements of the firms listed in the NSE were utilized. Descriptive statistics and multiple linear regressions were used to analyze the data which was presented in form of tables and charts. It was revealed that the mean internal financing of the companies listed at the NSE had consistently increased from 5.346 billion shillings in the year 2009 to 14.7 billion shillings in the year 2016. However, the study did not establish a significant relationship between internal financing and financial performance of listed firms in Kenya. A statistically significant relationship between equity financing and financial performance of listed firms in the NSE was established. The relationship between short term debt financing and financial performance of listed firms in Kenya was not significant. The mean long term debt financing for the firms listed at NSE had greatly increased from 3.367 billion shillings in 2009 to 15.587 billion shillings in 2016. The relationship between long term debt financing and financial performance of listed firms in the NSE was found to be statistically significant. It was concluded that two out of the four financial structure components included in the study were significantly associated with financial performance of listed firms in the Nairobi Securities Exchange in Kenya. A firm that utilizes equity finance is able to excel financially since the equity holders are the residual claimants and they have to ensure that resources are allocated efficiently to be able to maximize shareholders wealth. Affordable long term debt assists a firm to access productive technologies that it would not have otherwise achieved using internal financing. It was recommended that the board of directors of the listed firms should always give priority to funding options with no compulsory returns to avoid financial distress associated with difficulties in meeting financial obligations. Besides, the management of the listed firms should always perform accurate forecasting on projects they intend to venture into, against the cost of debt and taking into consideration the payback period, in the event they want to source for long term external funding. Since the study focused on firms listed in the NSE, it is suggested that the study be extended to other firms and institutions not listed to assess whether different findings may be reached regarding relationship between financial structure and financial performance.Item Influence of Convertible Bonds on Liquidity Growth of Commercial Banks in Nairobi County Kenya(International Journal of Finance (IJF), 2020) Obong’o, Ernest Misat; Mutea, Fredrick; Rintari, NancyPurpose: The purpose of this study was to investigate the influence of convertible bonds on liquidity growth of commercial banks in Nairobi county Kenya Methodology: This research applied descriptive research design when gathering data by closedended questionnaires on 39 commercial banks in Nairobi County Kenya and secondary data from commercial banks dating from 2016-2018. Overall operations managers, marketing managers and general managers were the respondents. Census technique was used. Pre-testing questionnaires was issued to branch marketing managers, operational managers and assistant managers in simple randomly selected five commercial banks located in Meru county Kenya. SPSS data analysis software was be consulted for quantitatively using the descriptive statistics such as mean, percentage and standard deviation. Tables, graphs and detailed explanations was used to present the final results of the study. Results: The study found out that there was a statistically significant positive relationship between convertible bonds and liquidity growth of commercial banks in Nairobi county Kenya. Convertible had an R value of .732 and an R square value of 0.536. This proved that convertible bonds predicted 53.6% of the changeability in the liquidity growth. The regression coefficients of convertible bonds had a β=.117, P=010 at 0.00 significance level. Unique contribution to theory, policy and practice: The discovery of presence of positive influence of convertible bonds on liquidity growth led to new knowledge contribution by the study. The study recommended that more types of customized bonds should be issued and public awareness should be raised. The study recommended that policies should be developed by government through the central bank whereby bank customers can obtain bonds more often just like the way mobile loan apps are common. This would promote more market for the bonds. Commercial banks should also indemnify various types of bonds with insurance firms so that any misfortune of events like the recent covid-19 pandemic would have minimal impact on the various types of fixed-rate bonds. The study contributed new knowledge when the relationship between corporate bonds and liquidity growth of commercial banks in Nairobi was established