5 research outputs found
Effect of Investment Decision on Financial Performance of Savings and Credit Cooperatives: The Case of Kitui Central Sub-County, Kenya
This research work focused on determining the effect of investment decision on financial performance of Savings and Credit Cooperatives in Kitui Central Sub-County. This is was due to the observed decline in performance of SACCOS in Kenya due to a low investment culture. The researchers adopted four objectives as a drive towards the research results as follows; to assess the effect of Replacement decision on Financial Performance of SACCOs in Kitui Central Sub-County, to find out the effects of Expansion Decision on Financial Performance of SACCOs in Kitui Central Sub-County, to investigate the effect of Renewal or modernization Decision on financial performance of SACCOs in Kitui Central Sub-County, and to evaluate the effects of Research and Development Decision on Financial Performance of SACCOs in Kitui Central Sub-County. The study adopted an empirical study design for a time-series data over a ten year period from 2006-2015. The research was undertaken on all twelve (12) SACCOS located in Kitui Town thus utilizing a Census technique in selection of respondents. Simple multivariate analysis was used for data analysis, while Karl Pearson’s correlation was used in determining the correlation within variables. The results of study were produced using data analysis workbook; the statistical package for social sciences (SPSS-version 21). Data presentation was done using tables. The study findings indicated that only research and development decision had a significant effect to SACCO performance while expansion decision, replacement decision, and renewal decision had none. The study recommended that SACCOs should invest more in research and development decision as it had a significant effect to SACCO financial performance, the least variation to the expected results and the highest contribution to financial performance in respect to SACCOs. Keywords: investment decisions, Financial Performance, SACCO
Evaluation of the Factors Leading to Loan Default at Equity Bank, Kenya
This paper gives an evaluation of the causes of loan default among the customers of Equity bank. A sample of 80 respondents out of 240 respondents which comprised of both the bank managers and loan defaulters at Equity Bank was used in the study. This represented 33% of the target population. The population was stratified into bank managers and loan defaulters while loans were stratified into performing and nonperforming loans. Data was collected using two sets of questionnaires which were administered separately to the target population. Data was analyzed using Microsoft Excel Data Analysis Tools. In the evaluation of the causes of nonperforming loans, the paper considered the contribution of the factors such as the banks’ lending practices as well as the economic backgrounds and financial decision making among loans recipients at Equity Bank Ltd. Microsoft Excel Data Analysis Tools were used to establish the relationship between amounts of loan advanced to an individual and the amount of loan defaulted. The paper established that the major factors influencing nonpayment of borrowed loans at Equity Bank Ltd were both internal and external. The paper recommended that banks’ credit policies be reviewed to match the highly volatile economic trends within financial markets with a strong emphasis on institutional appraisals on credit worthiness. Keywords: Loans, Bank, Default
Effect of Macro-Economic Variables on Stock Market Prices for the Companies Quoted on the Nairobi Securities Exchange in Kenya
Stock prices fluctuations for quoted companies occur daily due to both company specific variables like company earnings with corresponding dividend policies, and multiple macro-economic variables. This study sought evidence supporting the existence of influence of the selected macro-economic variables of: foreign exchange rate of hard currencies, interest rate and inflation rate on share prices fluctuations based on the weighted average monthly data from January 2008 to December 2012 for the companies listed on the Nairobi Securities Exchange in Kenya. The influence of selected macro-economic variables on stock exchange provide important implications for monetary policy, risk management practices, financial securities valuation and government policy towards financial markets. The study utilized secondary data that was obtained from: Central Bank of Kenya, Institute of statistical Kenya and Nairobi Securities Exchange. To investigate the effect of the selected macro-economic variables on share prices of the companies listed on the Nairobi Securities Exchange, simple and multi-variate regressions analysis was used. For all of the quoted companies it was desirable to find if the stock prices fluctuations are predominantly due to the selected macro-economic variables. The Nairobi Securities Exchange may derive great benefit through more investors raising new capital in the share market when stocks are in great demand and more extensional investment of companies by raising additional capital through stock splits or issuing more shares out of their authorized share capital. The study found that interest rate had a predominant effect on stock market price indices as compared to the other macro-economic variables. Interest rate, exchange rate for both the Euro and US Dollar had a negative effect on stock market indices for companies quoted on the Nairobi Securities Exchange. When the Kenya shilling depreciates the stock market indices gain in points. The inflation rate had a negative effect on stock market performance indicating that higher levels of inflation rate result in lower stock market indices in Kenya. Other macro-economic variables would also have impact on stock market indices for companies quoted on the Nairobi Securities Exchange since the predictor model did not account for all variables as it had a low R2 of 15.1 %
Influence of Working Capital Management Practices on Financial Performance of Small and Medium Enterprises in Machakos Sub-County,Kenya
Working capital can be considered as source of existence for all types of organizations, whether profit or non-profit organizations, therefore, it is a vital component for any profit making organizations for it influences operational level and sales volume. The purpose of this study was to assess the influence of Working Capital Management Practices on Financial Performance of SMEs in Machakos Sub-County, Kenya. This study was based on these objectives: assessment of the influence of cash management practices on financial performance, determination of the influence of receivables management practices on financial performance and the analysis of the extent to which inventory management practices influences financial performance of SMEs. The study adopted a cross-sectional survey research design which allowed the collection of primary quantitative data through structured questionnaires and interview methods. The target population was 159 Owners / Managers of SMEs trading in Machakos Sub-County. Random sampling technique was used to obtain a sample of 22 SMEs trading in Machakos Sub-County. The data was analyzed using both descriptive and inferential statistics. The findings of the study revealed that; working capital management practices were low amongst the SMEs, since majority had not adopted formal Working Capital Management Practices and there Financial Performance was on a low average. The study further revealed that SMEs financial performance was positively related to efficient cash management, efficient receivable management and efficient inventory management at 0.01 significance level
The Effect of Bank Specific Factors on Financial Performance of Commercial Banks in Kenya
The main goal of every banking institution is to operate profitably in order to maintain stability and sustainable growth. External and internal economic environments are viewed as critical drivers for bank performance. The main purpose of this study was to determine the effects of bank specific factors on the financial performance of commercial banks in Kenya for a period of 5 years, starting from the year 2011 to 2015. The dependent variable under investigation was return on assets (ROA). The independent variables were capital adequacy, asset quality, management efficiency, earnings ability and liquidity. The specific objectives of this research were to determine the effects of capital adequacy on the financial performance of commercial banks in Kenya, evaluate the effects of asset quality on the financial performance of commercial banks in Kenya, determine the impact of management efficiency on the financial performance of commercial banks in Kenya, determine the impact of earnings ability on the financial performance of commercial banks in Kenya and evaluate the effects of liquidity on the financial performance of commercial banks in Kenya. The choice of this five-year period was based on the explosive growth of the banking sector in the country and the availability of complete data for that period. The study concentrated on the bank specific factors that affect the bank