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 Influence of Strategic Direction on Organizational Performance of Public Corporations in Kenya. A Case Study of Agricultural Finance Corporation(The Strategic Journal of Business & Change Management, 2024-08) Muchiri, Veronicah Mwihaki; Gichunge, Evangeline; Mutegi, DoreenThis study examined the influence of strategic direction on the organizational performance of public corporations in Kenya, focusing specifically on the Agricultural Finance Corporation. The study was grounded in Contingency Theory. A descriptive research design was employed, with data collected from a sample of 204 employees across various management levels at AFC. The study also adopted simple random method. Primary data were gathered through standardized questionnaires, while secondary data on organizational performance were sourced from AFC’s financial reports and other relevant publications. Data analysis involved the use of descriptive and inferential statistics, including mean, standard deviation, Pearson correlation, and regression analysis, facilitated by SPSS version 29. It was found that a well-defined strategic direction, when effectively communicated and aligned with the organization’s operations, led to improved financial performance, operational efficiency, and customer satisfaction. Based on these findings, the study recommended several strategies for improving the performance of public corporations like AFC. It was recommended that AFC’s leadership enhance strategic communication to ensure that all employees are aligned with the organization’s vision, mission, and goals.Item THE EFFECT OF AGENCY CONVENIENCE ON FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN ISIOLO COUNTY, KENYA(The Strategic Journal of Business & Change Management., 2024-08-02) Nancy, Rintari; Amina Abdi, Dulacha; Susan, KamburaThe purpose of this study was to determine the effect of agency convenience on financial performance of commercial banks in Isiolo County, Kenya. A descriptive survey research design was used, targeting Cooperative Bank, KCB, and Equity Bank, which control over 90% of authorized banking agents in the region. The target population included 102 staff in Equity bank, 123 staff in Cooperative bank, and 80 staff in KCB bank, which was a total of 305 banks. The study adopted the Yamane’s formula (1967) to result to a sample size of 58 staff in Equity bank, 70 staff in Cooperative bank, and 45 staff in KCB bank, which was a total of 173 staff. Stratified sampling was applied to select respondents from the finance and accounts departments of these banks. Data were collected via structured questionnaires and supplemented with secondary financial data. The pilot research used a sample size of 10% for this investigation, with 17 respondents randomly selected to fill out the survey in Meru County. To ensure the data was reliable, Cronbach's alpha was applied, which measures internal consistency. The questionnaires included in this study underwent a validation process to guarantee their content and face validity, as well as to gauge their overall quality. The analysis revealed a significant positive correlation between agency convenience and the financial performance of commercial banks, with a Pearson correlation coefficient of 0.751, indicating a strong relationship. The regression analysis further confirmed that agency convenience is a crucial determinant of financial success, as evidenced by its standardized coefficient (β = 0.304) and a highly significant p-value of 0.000. The study concluded that agency convenience was a vital contributor to the financial performance of commercial banks. The study concluded that banks that prioritized and enhanced the accessibility and ease of use of their agency banking services had substantial improvements in their financial outcomes. It is imperative that bank managers prioritize the convenience of agency services. This can be achieved by expanding the network of agents to ensure that services are accessible in both urban and rural areas, as well as by leveraging digital platforms to streamline transactions and reduce wait times. Enhancing the user experience through technology will not only increase customer satisfaction but also drive higher transaction volumes, which are crucial for financial success.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 Effect of Adoption of Fintech Payments on Financial Performance of Commercial Banks in Meru County, Kenya(International Research Journal Publishers,, 2023-07) Wilter, Mwigereri Munyua; Kambura, Susan; Mugoche, AbelThis study aimed to probe the effect of financial technology (Fintech) payment on the performance of marketable banks in Meru, Kenya. Fintech had surfaced as a disruptive force in the fiscal assiduity, offering new ways of delivering fiscal services to guests. The study explored the extent to which marketable banks in Meru had espoused Fintech and the impact it had on their performance. The study involved a check of commercial banks in Meru, Kenya, to gather information on their relinquishment of Fintech, as well as their fiscal performance. The study was anticipated to give perceptivity into the benefits and challenges of Fintech relinquishment in the banking sector in Meru, Kenya. The findings may be useful to commercial banks, policymakers, and other stakeholders in the fiscal assiduity in developing strategies to enhance the relinquishment and use of Fintech in the region. Results on regression study designated that there was a robust optimistic association (R=0. 89, p- value of 0.000) between adoption of financial technology payment and financial performance of commercial banks. The findings further indicated that fintech payments have a significant influence on financial performance of commercial banks.Item Influence of Product Diversification on Financial Performance of Microfinance Institutions in Nairobi County, Kenya.(International Journal of Finance, 2023-07) James, Margaret Wanja; Rintari, Nancy; Muema, WilsonPurpose: To examine the influence of product diversification on financial performance of microfinance institutions in Nairobi County, Kenya. Methodology: The study applied descriptive research design during the collection of data. The study’s target population was 14 microfinance banks. The sample size was selected using simple random sampling method after determination using Kothari (2004) sampling formular to obtain 19 operations managers, 34 tellers, 40 credit officers, and 28 customer care officers. The study collected primary and secondary data. The study conducted a pre-test study of the questionnaires in Cooperative bank and I&M banks in Nairobi County. Further, the study tested reliability and validity. Further, quantitative data was analyzed using SPSS software version 25 to generate descriptive and inferential statistics. The various descriptive analysis was frequencies, percentage and mean, while linear and multiple regression analysis was done as part of inferential statistics analysis. Results: The questionnaire results disclosed that 87(89%) strongly agreed and 9(9%) agreed (mean of 4.83) that there were efforts from the management to allow the existence of different types of loan products with various requirements. Nevertheless, 21(21%) strongly disagreed and 19(20%) disagreed (mean of 2.92) that the staff were always encouraged to offer suggestions to the management on how products could be improved further to incorporate the needs of each customer. Additionally, under model summary, R was 0.746 and R-square was .557 at a Durbin- Watson value of 1.442. Further, the significance coefficient of ANOVA was 0.001 hence less than 0.05. The results therefore enabled the study reject the null hypothesis. Unique contribution to theory, policy and practice: The conclusions made on product diversification was that the management failed to incorporate various improvement suggestions made on the different implemented products. The issues gave a major reason why MFIs revenue was declining in Kenya. That is, in as much as they had different products, the specific client needs were not being met and if they were met, it was very expensive to maintain the products. The study recommends that the management of MFIs should commission a special committee of expert to review the requirement of each and every product being offered.Item Determining the Effect of Process Innovation on Financial Performance of Deposit Taking Saving and Credit Cooperative Societies in Laikipia County, Kenya(International Journal of Finance, 2023-04) Jillo, Safia Abdi; Rintari, Nancy; Moguche, AbelPurpose: To determine the effect of process innovation on financial performance of deposit taking saving and credit cooperative societies in Laikipia County, Kenya Methodology: The study used descriptive research design to collect data from nine deposit taking Saccos in Laikipia County. Specifically, the target population were 118 respondents who included 22 departmental managers and 96 support staff selected using census method. Notably, the study collected both primary and secondary data whereby primary data was collected in form of questionnaires from departmental managers and support staff. Secondary data was collected from financial reports such as income statement, whereby various financial ratios such as return on assets, return on equity, gross profit, net profit, liquidity ratio were noted. Further, the study conducted a pilot study in Bingwa Sacco in Kirinyaga County whose managing director, 3 departmental managers and 13 technical staff took part. The study also measured reliability using Cronbach Alpha Coefficient method while face, content and construct types of validity were measured. Further, SPSS software version 24 was used to analyze and generate various statistical reports whereby, in the analysis of the questionnaire, the study examined and generated descriptive statistics such as frequency, percentage and mean. Additionally, the study generated various linear regression statistics such as model summary and ANOVA of each independent variable. Thereafter the study generated inferential statistics to test the general model. Results: The results indicated that 92(82%) strongly agreed and 16(14%) agreed on a mean of 4.75, that there were effective complaint management processes which clients used in case of dissatisfaction. Further, 74(67%) strongly agreed and 17(15%) agreed on a mean of 4.23 that cheque clearance took less time since the system was able to process it faster. That notwithstanding, 74(67%) strongly disagreed and 21(19%) disagreed on a mean of 2.23, the Sacco management had invested a lot in equipping the Sacco with good working computerized systems. In addition, 65(58%) strongly disagreed and 31(28%) disagreed on a mean of 2.29, that the Sacco had established updated system checks to facilitate less downtime during financial transactions. Additionally, R was 0.864 while R-square was 0.747 at a Durbin Watson of 1.601. This meant that process innovation predicted 74.7% on financial performance which was positively correlated d at 1.601. Further, the p-value was 0.022 which was below than 0.05 and therefore, the study rejected null hypothesis. Unique contribution to theory, policy and practice: The study concluded that Sacco’s bid to incorporate ICT to assist in financial transaction such as having enough servers and skilled staff was still low hence increased system downtimes. Consistent downtime exposed the client deposits to cyber theft since the hackers noted this weakness and used to their advantage to commit crime. Therefore, the Sacco management should invest in secure servers to protect client’s information from unauthorized access or use. This could also involve wither hiring new ICT personnel or sharpening the skills of the current ICT staff through training and development. Additionally, the Sacco staff should maintain a strict policy of ensuring that they do not issue passwords to anyone or leave their computers logged in in their absence even when there is a system failure to reduce cyber hacking. Further, the Sacco ICT management should expand their domains to ensure that there are minimal system failures to facilitate smooth flow of operations.