RELATIONSHIP BETWEEN INCOME GENERATING ACTIVITIES AND FINANCIAL PERFORMANCE OF PUBLIC UNIVERISTIES IN KENYA

Abstract

The proposed study was to explore the relationship between income generating Activities and financial performance of public universities in Kenya. Higher education in Kenya has been recognized as a critical tool in transforming the society. The Government spends a lot of funds on education in relation to the national budget. However, despite the continued increase in government investment in higher education; resources are never adequate to match the everincreasing enrolment rates. In connection to this, several public Universities have mobilized their scarce resources to establish IGAs in order to supplement the government expenditure on education. Specific objective of this study was to examine the contribution of academic based IGAs, roles of service Based IGAs, and how production based IGAs influence the financial performance of public Universities in Kenya. A broad study was done with regards to the various theories that explain the relationship that really exist between income generating activities and their financial performance, where the resource dependency theory is seen as a conceptual tool where it argues that no organization is completely self-contained, agency theory on the other hand was also considered as an important tool since it shows, the relationship that exist between two parties, where one party is been referred as principal and the other one agent. It was observed that, most of the IGAs conducted in public Universities in Kenya include Academic Based IGAs: well known of these programs are module II programs, service Based IGAs dealing with services like restaurants, cyber cafes, production Based IGAs was also put in place in this study, also as source of income to the Universities. A descriptive approach in this project was used to explain the relationship between the variables of the study as shown in the conceptual framework, where questionnaires were used to analyze whether their existed a relationship between IGAs and Financial performance in Public Universities.