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Master of Science in Finance and Investment

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    Effects of Internal Audit System on Financial Performance of SACCOs in Meru County, Kenya
    (KeMU, 2023-08) Kiambi, James Kaimenyi
    In today’s business world, the major interest is to enhance accountability, profitability and enjoy competitive advantage. As a way of achieving this, SACCOs employ internal auditing, to enable them monitor the monetary activities to enhance financial performance. Despite the fact that the majority of SACCOs (around 70%) have implemented either an in-house or outsourced audit system, their financial performance remains below expectations, with instances of fraud, poor fund management, and inadequate budget development and utilization. Given these circumstances, the purpose of this research was to examine how the internal audit system affects the financial performance of SACCOs in Meru County. The study concentrated on four primary goals: evaluating the influence of compliance, risk assessment, control function, and monitoring on the financial performance of SACCOs in Meru County. The study's theoretical foundation was built on the agency, legitimacy, and capture theories. To accomplish the research objectives, a descriptive research design was employed, targeting 42 SACCOs that had operated in Meru County for a minimum of ten years. The study adopted a census approach, including all 42 eligible SACCOs in the study. The respondents consisted of the chief executive officers of the respective SACCOs, totaling 42 participants. Data collection involved the use of a structured questionnaire, which was pre-tested in four SACCOs from Tharaka-Nithi County, selected purposively. The collected data were accurately coded based on the responses to various items. In the analysis of data, this study employed SPSS (Version 24) and utilized descriptive and inferential statistics. Multiple linear regression models were used to investigate the connections between the dependent and independent variables. The study's findings uncovered a noteworthy correlation between compliance and the financial performance of SACCOs in Meru County, rejecting the hypothesis that the compliance slope is zero (b = 0). Similarly, a noteworthy relationship was observed between risk assessment and financial performance, rejecting the hypothesis that the risk assessment slope is zero (b = 0). However, no noteworthy impact on financial performance was found for control function and monitoring. The study concluded that compliance plays a vital role in ensuring SACCOs adhere to regulations and guidelines, thereby fostering transparency, accountability, and good governance. Furthermore, effective risk assessment can assist SACCOs in reducing operating costs, enhancing efficiency, and improving financial performance. The study recommends that SACCO management strive for full compliance with relevant regulations to enhance accountability and financial performance. Additionally, implementing robust risk assessment policies is advised to mitigate risks, reduce operational costs, and boost financial performance. Finally, the study suggests expanding the research to encompass other financial institutions to explore potential variations in the correlations between the internal audit system and financial performance.
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    Influence of Asset Management Strategies on Financial Performance of SACCOS in Imenti North Sub-County, Kenya
    (KeMU, 2023-08) Rahima, Atikiya Sora
    The consistency of offering asset management products by Saccos enables them to easily settle their obligations when they fall due. Nevertheless, Kenyan Sacco’s have been experiencing low liquidity ratios concerns. The general objective of the study was to examine the influence of asset management strategies on financial performance of Saccos in Imenti North Sub-County, Kenya. The specific objectives were to determine the influence of cash flow management strategy, mortgage loan management strategy, treasury bills management strategy and stock control management strategies on financial performance of Saccos in Imenti North Sub-County, Kenya. The study used pecking order theory, contingency theory and resource based-view theory. Descriptive research design was adopted to collect data from 7 deposit taking Saccos located in Imenti North Sub- County. Further, the selection of representatives from the entire population was done using simple random sampling method to have 13 accounts department officers, 34 tellers, 28 back-office staff and 36 loans officers hence a total of 111 respondents. Quantitative data inform of closed-ended questionnaires and financial statements was collected and measured using SPSS version 24. The study conducted a pilot study in Unison Sacco located in Isiolo county. Descriptive statistics such as frequency, percentage and mean were analyzed while at the same time inferential statistics line Pearson Coefficients and multiple regression were similarly analyzed. The study found out that there was a positive influence of asset management strategies on financial performance of Saccos in Imenti North Sub-County, Kenya. This was because the p-value was 0.000 hence less than 0.05. Notably, the overall r was 0.779 and r-square was 0.607 with a Durbin Watson value of 1.392. Therefore, asset management strategies had a 60.7% influence on financial performance with a positive correlation. The conclusion made regarding cash flow was that the investment department was still undeveloped in many Saccos therefore limiting on the authorization of incorporation of funds in investment options like capital markets. On mortgage loan, there were high cases of default and inconsistent payment of interest, which was brought about by poor communication and follow-up skills applied by the staff when reminding the clients to pay their dues. On treasury bills, the Saccos had not adequately created awareness to their clients on the opportunities that they could generate from investing in treasury bills. On stock control, the Saccos had not invested resources towards acquiring latest stock management software that would offer real time data on the current inventory. Therefore, the study recommends that on cash flows, the BOM should create policies and provide adequate funds to establish an investment department, if there is none, or strengthen it if in existence. On mortgage loans, the management should introduce communication in-job training whereby the staff equipped with basic etiquette, and negotiation skills. On treasury bills, the marketing managers should ensure that they have developed treasury bills campaigns such as having a sensitization week in the branch. where clients get access to information regarding the T-bills. On stock control, the senior management should allocate funds to purchase various stock management software that would be used within the branches to manage their stock levels.