Money Supply, Inflation Rate, Exchange Rate and Growth of Domestic Private Investment in Kenya

The objective of the study was to evaluate the effect of selected macroeconomic variables on the growth of the domestic private investment. The study used a time series quarterly data spanning 1997 t0 2018.  Autoregressive Distributed Lag (ARDL) model was adopted to examine if changes in select macroeconomic variables determine the growth of domestic private investment in Kenya. These selected macroeconomic variables are; central bank rate, the repo rate, t-bill rate, money supply, exchange rate, and inflation.  The bound cointegration testing procedure revealed the existence of a long-run cointegration. The long-run cointegrating model estimated shows that private domestic investment varies significantly and negatively with the central bank rate and the commercial lending rate as well. However, an increase in the money supply increases the level of investment. Another significant observation is that moderate inflation is critical in increasing the level of investment. These results point to one critical revelation; monetary policy conduct is essential in driving private domestic investment. An error correction model shows that 62% of deviation from the cointegration path is corrected with a quarter

Influence of Financial Literacy on Growth in Wealth of Investment Groups in Kenya

This article assessed the Influence of financial literacy on growth in wealth of investment groups in Kenya. In research methodology, the study adopted cross sectional survey design. The design also adopted a descriptive and correlational approach that aided on drawing conclusions on the research objectives. The population of interest was composed of investment groups registered by KAIG as availed by the KAIG directory. The population comprised of the 4020 groups registered by the Association as at December 2015. The sample size of this study was calculated using the formula for finite population. Since the population is not homogenous. Stratified random sampling was then be used in allocation of samples proportionate to size of the strata that were divided into small, medium and large investment groups. The research instrument was a questionnaire. Analysis of the data was done using (SPSS). Regression and correlation analysis was done to test the relationship between the study variables. The study findings indicated that there was a positive and significant relationship between financial literacy and growth in wealth of investment groups. The study concluded that financial literacy is key to growth in wealth of investment groups. The study therefore recommends that investment groups need to train in financial literacy to create investment groups wealth. Keywords: financial literacy, growth in wealth, investment groups in Kenya

Influence of Portfolio Diversification on Growth in Wealth of Investment Groups in Kenya

This article assessed the Influence of portfolio diversification on growth in wealth of investment groups in Kenya. In research methodology, the study adopted cross sectional survey design. The design also adopted a descriptive and correlational approach that aided on drawing conclusions on the research objectives. The population of interest was composed of investment groups registered by Kenya Association of Investment Groups as availed by the directory. The population comprised of the 4020 groups registered by the Association as at December 2015. The sample size of this study was calculated using the formula for finite population. Since the population is not homogenous. Stratified random sampling was then used in allocation of samples proportionate to size of the strata that were divided into small, medium and large investment groups. The research instrument was a questionnaire. Analysis of the data was done using (SPSS). Regression and correlation analysis was done to test the relationship between the study variables. Group size was used a moderating variable. The study findings indicated that there was a positive and significant relationship between portfolio diversification and growth in wealth of investment groups. The study concluded that portfolio diversification is key to growth in wealth of investment groups. The study therefore recommends that investment groups need to diversify their portfolio to create the investment groups wealth. Keywords: Portfolio diversification, growth in wealth, investment groups in Kenya

Analysis of the factors influencing customer adoption of internet banking in Nairobi

Thesis submitted in partial fulfillment for the requirements for the Degree of Master of Commerce (MCOM) at Strathmore UniversityThe adoption of internet banking as a platform for offering banking services is on a steady rise globally. The purpose of this study was to examine the factors influencing customer adoption of internet banking in Kenya. The study utilized an Integrated Model Framework to investigate the factors that influence customer adoption of internet banking in Kenya. Variables were drawn from traditional models that offered separate and theoretically sound constructs, namely; Theory of Perceived Risk, Technological Acceptance Model, Theory of Planned Behavior, Theory of Reasoned Action, Diffusion of Innovation Theory and the ABC Model of Attitudes. The scope of the research was Kenyans who held an account with any of the commercial banks in Kenya between March and April 2017. Questionnaires were distributed to customers either inside banking halls or while entering or leaving the banking hall in sampled bank branches. A sample size of 384 customers was used. Data was analysed using SPSS software where various data analysis techniques including Descriptive statistics, Pearson’s Correlation Coefficients and Multiple Regression Analysis were employed. Results revealed that 47.1% of the respondents had adopted internet banking (IB) as of April 2017. Similarly, only 14.5% of the respondents had used IB frequently enough to infer full adoption. The model used in this study explained 40.9% of the variance in Adoption of Internet Banking in Nairobi. Further, Perceived Risk Facets, Diffusion of Innovation Factors, Technological Acceptance Factors, Planned Behavior Factors and Attitude were found to be predictors of Adoption of Internet Banking by customers in Nairobi. Perceived Risk Facet was found to be a negative predictor of internet banking adoption while all the other factors were found to be positive predictors of internet banking. The research may give some guidance to banks, KBA, CBK, Government of Kenya and other policy makers. For instance, policy makers may want to come up with policies and systems that mitigate risk associated with IB use thereby increasing its adoption and use. This research attempted to fill the knowledge gap existing regarding factors influencing customer adoption of internet banking in Kenya. The study suggests further research in the area to explore more factors that can explain the customer adoption of IB in Kenya as the overall research model did not explain most of the variance in the adoption of IB, suggesting that other factors exist that could account for adoption of IB in Kenya

Inadequate Insurance Claims Reserving and Financial Distress in Non-Life Insurance Companies in Kenya: A Structural Equation Modeling Approach

Financial distress (FD) is a common occurrence in Kenyan commercial sector and is not lacking in non-life insurance companies in Kenya. Several insurance companies have been placed under statutory management for failure to pay genuine claims and other creditors. Insurance companies provide unique financial services, not only to individuals but also to the growth and development of the economy; giving employment to workers and dividends to investors. Financial distress places insurable properties and businesses at risk thus reducing the general public confidence in the insurance sector. For this paper, the goal was to investigate whether inadequate reserving of claims (IRC) causes financial distress in non-life insurance companies in Kenya. In accounting for insurance claims reserves, increases in reserves mean a reduction of profitability of an insurer, whereas a decrease in reserves increases the profitability resulting in higher taxation and payment of dividends, which drains the insurer’s cash flow, thus causing financial distress. Out of 37 non-life insurance companies, registered in 2018 in Kenya, four insurers were subjected to Pilot Testing and another four companies declined to participate in the survey. Secondary data from Insurance Regulatory Authority website was retrieved for calculations of Z-scores as per Altman (1993), amended formula. Primary data was also collected through a questionnaire. A partial least squares Structural Equation Modelling (PLS-SEM) was employed to assess the mediating effect of Insurance Regulatory Association (IRA) supervision on the association between inadequate reserving of claims and financial distress. Goodness-of-fit (GoF) indices were used to assess the model’s goodness of fit. By using the discriminative Z-score formula, 52% of the institutions considered in 2018 were financially distressed, compared to 48% in 2017. However, when considering the average of ten years (2009 to 2018), financially distressed..............Keywords: Non-life  insurance  companies,  Policyholders,  Insurance  Regulatory  Authority,  Claims Reserving, Z-Scores, Structural Equation Modelling DOI: 10.7176/RJFA/12-12-06 Publication date:June 30th 2021

Influence of Profitability on Dividend Pay-out among Deposit-Taking Saccos in Kenya

This study explored the influence of profitability on Deposit-Taking Saccos in Kenya. The study was motivated by inconsistency in the ability of Saccos to live up to their promise of paying dividends to members consistently. Many of them pay dividends from unforeseen profits and/or while highly leveraged. These unhealthy dividend practices leave Saccos unable to pay dividends in the long term sustainably, besides exposing them to insolvency. A census study was conducted involving 179 DT Saccos. This study used a cross sectional design to obtain data from all registered DT Saccos in Kenya (n=179) over an eight-year period (2012-2019). Panel data modelling was used. The findings showed that firms were experiencing declining profits during the study period. During the panel period, Saccos failed to improve their ability to generate resources from equity yet, they sustained a high dividend payout. To maintain their dividend payout, the DT-saccos borrowed funds to pay dividends The findings deepen our understanding of the interplay of factors influencing dividend payout in DT-Saccos in Kenya. Small saccos have higher dividend payout compared to large ones. Indeed, small saccos use dividends as a business strategy to retain and attract new members, thereby augment their capital. Keywords: Saccos, Dividends, Performance, dividend payout, Investment opportunity set DOI: 10.7176/IKM/11-4-10 Publication date:September 30th 202

Board Effectiveness and Stock Liquidity Empirical Evidence at the Nairobi Securities Exchange

The aim of this paper was to assess the influence of the board effectiveness on the stock liquidity of firms listed at the Nairobi Securities Exchange. The success of security markets highly depends on stock liquidity. The ease of buying and selling of securities in the stock market while not bringing any effect on the prices. Board effectiveness has been found to play a key role as an aspect of corporate governance on firms’ financial performance but its role still remains unclear on stock liquidity of firms listed at the NSE. It is on this merit that this paper sought to fill the existing gap by establishing whether the board effectiveness influences stock liquidity of firms listed at the NSE. A census was carried out on all the 68 firms listed at the Nairobi securities exchange for the period spinning from 2014 to 2018. This study used secondary obtained from the NSE and the listed firms’ published annual financial reports. Data analysis was done using descriptive and inferential statistics. Under descriptive statistics; mean, median, minimum, maximum, and standard deviation were used and for the inferential statistics correlation and regression analysis within panel data framework were used. Data was subjected to diagnostic tests with Eviews 7 as the main statistical tool of analysis. The findings of the study indicated that board effectiveness had positive and significant influence on stock liquidity of firms listed at the NSE when quoted spread was used as measure but no significant influence when measured by turnover, illiquidity and liquidity ratio. This study recommended that more monitoring needs to be done to enable firms to reduce transaction cost. Key Words: Board Effectiveness, Stock Liquidity, Nairobi Securities Exchange. DOI: 10.7176/RJFA/12-10-12 Publication date:May 31st 202

Influence of Liquidity on Financial Performance of Insurance Companies in Kenya

Liquidity is the capacity of a company to satisfy its current financial obligations after they fall due.  A firm may incur extra costs if it fails to honor its short term financial obligations. The aim of the study was to determine the influence of liquidity on the financial performance of insurance companies in Kenya. The research applied a correlational research design. A correlational study design is administrated to debate the connection between variables. The target population for this study was the fifty-three insurance companies in Kenya that were operational in 2018. The investigation found that liquidity had an enormous positive effect on financial performance  (Return on assets and return on equity). The study concludes that the greatest threat to liquidity  may occur in an insurance firm during a catastrophe when a large number of claims are received  directly or there could even be prospects of a significantly large claim which insurance companies  should have optimal liquidity for such situations. The review recommends that Insurance firms should monitor liquidity in their firms and adopt corrective actions in instances of high liquidity risk.&nbsp

Size As a Determinant of Choice of Source of Entrepreneurial Finance for Small and Medium Sized Enterprises in Thika District

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Evidence of high-risk sexual behaviors among injection drug users in the Kenya PLACE study

Injection drug users (IDUs) in resource poor settings are at high risk for HIV transmission through unsafe needle-sharing and sexual practices. We report on the injecting and sexual behavior of a sample of IDUs from Malindi, Kenya