Performance In Kenya Research Articles

Working Capital Management Practices and Financial Performance in Kenya

Gross working capital and net working capital are the two components that can be used to establish the working capital concept. Between current liabilities and current assets, there is a difference called net working capital. Accounts receivable, cash, and inventory are examples of current assets because they are easily convertible into cash; on the other hand, current liabilities are those that are owed to the company right away, such as accounts payable, bills payable, and other financial instruments. Thispaper appraises the interactions between working capital management in terms of cash, inventories, receivables, and payables management in relation to financial performance. The study also highlights two theories relating to working capital management: the liquidity preference theory and the cash conversion cycle. The study concludes that different working capital components have varying effects on the financial performance of manufacturing enterprises. Some studies reveal a favorable association between the components of working capital, whereas others reveal a detrimental relationship.

Nexus between Organizational Culture and Job Performance in the Public Service: A Study of Department of Finance and Economic Planning, Embu County Kenya

Most countries are in the process of improving service delivery with a focus on Job Performance. Job Performance is the sum total of employee efforts measured based on organization performance. The Public Service in Kenya is involved in enhancing Job Performance through improving Organizational Culture. The study assessed the relationship between Organizational Culture and Job Performance in Kenya. A descriptive research design was used. The study was conducted at the Department of Finance and Economic Planning, County Government of Embu targeting a sampling frame of 120 employees. A sample size of 92 respondents was obtained from the sampling frame using Yamane formula. Proportionate random sampling was used to identify the targeted respondents. Semi-structured questionnaires were used to collect data. Data was collected on Demographic Information, Organizational Culture, and Job performance. Both descriptive and inferential statistics were utilized to analyze the data. Results were displayed in tables, column charts and pie-charts. The study findings established that Organizational Culture has a both positive significant correlation and relationship with Job Performance. Organizational Culture had a significance value (0.000) that is less than the critical significance value (?) of 0.05. When Organizational Culture is equal to zero, Job Performance is equal to 2.833 units. Subsequently, when one improves Organizational Culture by one unit, there is an increase in Job Performance by 0.334 units. The co-efficient of determination (R2) has a value of 0.186, a discovery that Organizational Culture results to an 18.6% of the deviations in Job Performance. Further the study findings established that there was clear and consistent set of values that govern the operations of the department with 61.6% of the respondents agreeing to that. 60.6% of the respondents agreed that the department had Standard Operating Procedures which were applied in service delivery. There was teamwork and regular training opportunities which were fairly distributed among the staff in the department with 59.6% and 61.6% of the respondents agreeing respectively. There were systems in place for celebrating staff success and achievements with 62.6% of respondents agreeing. Moreover, 60.6% of the respondents were in agreement that the department had a Performance Contracting/Performance Appraisal System with annual appraisal. The study recommends further research on other factors which influences Job Performance but were not part of this study accounting for 81.4% of the variations in Job Performance.

Working Capital Management Practices and Financial Performance in Kenya

Working Capital Management Practices and Financial Performance in Kenya

Effects of Retirement Benefits on Organisational Performance in Kenya: A Case of Makueni County

Employees form the human capital factor in all organizations and symbolizes all human abilities irrespective of the inherent or learnt qualities, whose worth could be improved by suitable development investments. Organizations therefore need to ensure that they offer compensation and welfare packages that increase employee motivation. The motivation of employees increases when their needs which leads to increased productivity and efficiency in delivery of service. Achieving optimal performance in public service remain a challenge in Kenya. The study sought to evaluate the effect of retirement benefits on the performance of Makueni County Public Service. The social exchange theory guided the study. Out of the 3679 employees, proportionate stratified random sampling was used to identify 376 respondents and a semi-structured questionnaire was used to collect the primary data. Descriptive research design was used while descriptive statistics, specifically the mean and the standard deviation was used to analyse the data while inferential statistics was done by use of a regression model. The regression analysis showed that 45.3% of the organizational performance is was explained by availability of retirement benefits. The study concludes that retirement benefits have a positive significance correlation on organizational performance and the availability of these benefits boosts employees’ satisfaction and consequently their performance and that of the organization in general. The study recommends that County Government of Makueni should ensure an equitable provision of retirement benefits; train staff on the available retirement benefits and provide staff with options to choose from. The study recommends that the human resource directorate should conduct sessions with employees to identify the gaps in the staff retirement benefits and action on the recommendations. Keywords: Retirement Benefits, Organizational Performance, County Government of Makueni

Assessment of Loan Portfolio Quality on Financial Performance of Commercial Banks in Kenya

Deteriorating loan portfolio quality is negatively impacting the financial performance of commercial banks in Kenya. Though, Kenya’s banking sector is well established and plays key part in developing county’s economy, it is facing constraints in terms of absolute growth due to this declining loan portfolio quality. Consequently, stakeholders of these commercial banks especially creditors, depositors and shareholders are incurring huge financial losses in absolute terms on their deterioration. Although, there are studies that have established the factors that affect commercial banks’ financial performance, until the time of the study there were unresolved issues. This calls for commercial banks need to be proactive like modernizing their risk mitigation measures to more precise measures to deal with expected credit losses. Banks need to change in this time of enhanced financial information, computing power and data analytics for best-in-class fair projection of credit risk for tangible competitive benefits. Study has demonstrated need for robust approach to commercial banks’ lending in dynamic financial markets for sustainable commercial banking financial performance in Kenya. Study aimed at assessing loan portfolio quality on financial performance of commercial banks in Kenya. Study objectives were to: determine significance of loan loss provision on financial performance of commercial banks in Kenya, evaluate allowance for loan loss impact on financial performance of commercial banks in Kenya and gauge bearing of gross impaired loans and advances on financial performance of commercial banks in Kenya. Researcher classified loan portfolio quality indicators as independent variables, regulatory frameworks, market and infrastructural dynamics as intervening variables, and measures of financial performance of return on assets and equity of commercial banks in Kenya as dependent variables. Research utilized descriptive design using percentages, mean, standard deviation, correlations, and panel data regression model. Researcher narrowed down targeted population to 38 fully operational commercial banks in Kenya by end of year 2020. Study applied census approach and relied on published audited financial reports. Researcher used document review secondary data collection tool and analysed data using SPSS program Version 24.0 supported by Microsoft excel windows 2010. Tables and figures were used to present study outcome. There was largely positive significant correlation between each independent and dependent variable proxies. Although on contrary, allowance for loan loss and gross impaired loans and advances association with return on equity were positive and negative insignificant correspondingly. Study general conclusion was that loan portfolio quality largely had positive significant association with Kenya’s commercial banks’ financial performance. Ccoefficient of determination of return on assets and return on equity were 0.1620 and 0.0363 respectively. That meant loan portfolio quality was responsible for 16.20% and 3.63% change in Kenya’s commercial banks’ financial performance in terms of return on assets and equity respectively. Overall, it is resolved, loan portfolio quality parameters; loan loss provision, allowance for loan loss and gross impaired loans and advances are determinants of financial performance (return on assets return on equity) of Commercial banks in Kenya.The study recommends management of these banks need to vigorously pursue measures to effectively manage loan portfolio quality to realise rising returns on assets and equity.

Firm-Specific Factors and Performance of Commercial Banks in Kenya

The purpose of this research was to determine the effect of credit risk and income diversification on commercial bank performance in Kenya. Impaired loans and total loans were used to measure credit risk. Net interest income and net non-interest income were used to measure income diversification. The study's population consisted of thirty-nine Kenyan commercial banks. The study, which spanned eight years from 2013 to 2020, relied on secondary data from audited annual financial statements. The collected data was analyzed using descriptive statistics and multiple regression analysis. Based on the findings, credit risk has a significant impact on bank performance. An increase in credit risk tends to lower the bank's financial performance in terms of profitability. The study further examined the impact of income diversification on bank performance. According to the regression results, income diversification had a significant impact on bank performance. The analysis concludes that banks and monetary authorities should devise strategies to ensure that asset quality is appropriately maintained and that non-performing loans are regulated and kept to a minimum to improve their performance. Further, given that over-diversification can affect bank performance by increasing the volatility of returns and default risk, there should be a balance between interest income and non-interest revenue as a source of income.

Internal Auditor's Role and Corporate Financial Performance in Kenya

Internal Auditor's Role and Corporate Financial Performance in Kenya

Internal Auditor’s Role and Corporate Financial Performance in Kenya

The internal auditor's job is to independently vouch for the efficiency of the organization's risk management, governance, and internal control systems. The purpose of this study was to ascertain the effects of risk assessment, financial statement audits, and internal auditor evaluations of controls on financial performance. This essay began by outlining the function of internal audit. An empirical study of the literature is then conducted with regard to financial performance and reviews of internal controls, financial statements, and risk management. The study found that there is evidence in the literature linking financial success and internal auditor functions.

Modeling the dynamic effects of macroeconomic factors on housing performance in Kenya

PurposeThis paper studies the dynamic effects of selected macroeconomic factors on the performance of the housing market in Kenya using Autoregressive Distributed Lag (ARDL) Models. This study aims to explain the dynamic effects of the macroeconomic factors on the three indicators of the housing market performance: housing prices growth, sales index and rent index.Design/methodology/approachThis study used ARDL Models on time series data from 1975 to 2020 of the selected macroeconomic factors sourced from Kenya National Bureau of Statistics, Central Bank of Kenya and Hass Consult Limited.FindingsThe results indicate that household income, gross domestic product (GDP), inflation rates and exchange rates have both short-run and long-run effects on housing prices while interest rates, diaspora remittance, construction output and urban population have no significant effects on housing prices both in the short and long run. However, only household income, interest rates, private capital inflows and exchange rates have a significant effect on housing sales both in the short and long run. Furthermore, household income, GDP, interest rates and exchange rates significantly affect housing rental growth in the short and long run. The findings are key for policymaking, especially at the appraisal stages of real estate investments by the developers.Practical implicationsThe authors recommend the use of both the traditional hedonic models in conjunction with the dynamic models during real estate project appraisals as this would ensure that developers only invest in the right projects in the right economic situations.Originality/valueThe imbalance between housing demand and supply has prompted an investigation into the role of macroeconomic variables on the housing market in Kenya. Although the effects of the variables have been documented, there is a need to document the short-run and long-term effects of the factors to precisely understand the behavior of the housing market as a way of shielding developers from economic losses.

Effect of Role Culture Implementation Approach on Universities Performance in Kenya

The recent increase in competition and insufficient government financing, as well as the government's increased focus on technical, vocational education training, have had a significant negative impact on higher education's service delivery and performance. The study sought to determine the effect of role culture implementation approach on university performance in Kenya. The study used a descriptive research approach, and its target population included 444 senior university employees from all 74 accredited universities in Kenya. Descriptive and inferential statistics were used to analyze the data. The study discovered that role culture was significant to performance of universities. The R square value of 0.184 proved that role culture affected the performance of universities by 18.4%. The correlation value of (r=0.321, p<0.05) showed the relationship between role culture and universities’ performance was positive and significant. The chi-square value of χ2 (5) = 12.222, p=0.027 further established a significant relationship between role culture and universities’ performance. Role culture was significantly associated with research output, student placement by KUCCPS, and graduation rate. Organization managers must have a good understanding of the cultures that exist in universities and the impact it generates on typical performance. At the managerial level, the management should not only pay attention to the results but also consider the needs of the staff for positive outcomes.

Shareholder Rights and Performance of Deposit Taking SACCO’s

Purpose:Greater attention has paid on shareholder rights in the 21st century by shareholders, regulators and the general public. Effective shareholder protection mechanisms have played a crucial role thus bolstering shareholder confidence and retention. this study probed the influence of shareholder rights on Deposit Taking SACCOs performance in Kenya.
 Design/Methodology: The relation was analyzed on the basis of all the 42 Deposit Taking SACCO’s in Nairobi County. The study relied on primary data which was gathered using structured questionnaires from senior managers. Both descriptive statistics and inferential statistics were employed for data analysis 
 Findings: The results affirmed that shareholder rights positively and significantly influenced Deposit Taking SACCO’s performance in Kenya.
 Implications/Originality/Value: This paper enriches current literature by examining the influence of shareholder rights on Deposit Taking SACCO’s performance. The findings may be of vital importance to policy makers when developing policies on shareholder rights. Deposit Taking SACCOs leaders should take cognizance of shareholder rights particularly the right to participate in decision making, right to equitable treatment and right to access information so as to enhance performance.

Effects of Digital Marketing Tools on the Performance of the Fashion Industry in Kisumu County, Kenya

Despite studies suggesting that digital marketing practices have wide usage globally, there is currently no evidence in Kenya's fashion industry linking digital marketing tools to performance. This paper presented the findings on the influence of social media marketing, m-commerce, and website marketing as facets of digital marketing on the performance of Kenya's fashion industry. The study was guided by a Resource Based theory in a correlational research design. The study population constituted 560 SMEs in the fashion industry, out of which 30% (169) sample constituting proprietors of SMEs in Kisumu city in Kenya was picked using a stratified sampling technique. The findings revealed that digital marketing tools such as social media marketing, m-commerce, and Website marketing collectively accounted for 70.2% (R2=.702, p=0.000) variation in the performance of firms in the fashion industry within Kisumu City. Therefore, the study recommends that the proprietors of firms in the fashion industry should adopt and integrate digital marketing practices such as social media marketing and m-commerce into their business as they were seen to influence firm performance in the study context positively. The study findings, therefore, can be useful in informing policy-making relevant to the fashion industry.

The Relationship between Corporate Governance and Performance of Pension Fund Managers in Kenya

Pension funds performance in Kenya have been facing myriad of challenges ranging from poor administration and investments of pension funds, lack of transparency and accountability, non-remittance of monthly contributions by employers, misappropriation of scheme assets by the trustees, loss of scheme funds through negligence of trustees and poor investment of the scheme assets. The objective of this study was to examine the relationships between corporate governance, and performance of registered pension fund managers in Kenya. This study adopted positivism philosophy. The study employed a cross sectional survey design whereby access to the widest possible amount of data from the targeted Fund Managers in Kenya was sought. The population of interest of the study was 31 Fund Managers in Kenya licensed by RBA and CMA. The study used purely primary data sources. Primary data was obtained from the selected respondents. Primary data was collected through questionnaire. Regression analysis was used to establish the relative significance of each of the variables on the influence of corporate governance on the performance of pension fund managers in Kenya. The study findings indicated that there was significant relationship between corporate governance and performance of pension fund managers in Kenya. The study concluded that there is significant relationship between corporate governance and performance of pension fund managers in Kenya. The study determined that the corporate governance practices being implemented had been incorporated in the Pension Fund’s investment management decisions with its assets being more diversified and having enhanced reporting on investments. The study recommends on pension reforms, by creating a new class of potential activist shareholders in the form of pension funds, could in principle improve corporate governance and increased shareholder discipline. The governments as well as Pension Fund Managers supervisors should consider a more active role in the selection process of the board members, while reducing their choices to professional beneficiaries of the pension funds Keywords: Corporate Governance, Transparency, Ownership Structure, Accountability, Participation Performance, Pension Fund Managers & Kenya

Challenges Affecting Financial Performance of Smalland Medium Sized Firms in Kenya

Financial performance, in a broader sense, refers to the extent to which a firm's financial objectives have been met. This study aimed to evaluate the obstacles impacting small and medium-sized firms' financial performance in Kenya. The study's foundation was the body of existing literature, particularly on the variables affecting performance in small and medium-sized businesses, which was used to pinpoint these difficulties. The study's descriptive survey design was used. Nine hundred and eighteen businesses answered questionnaires from the researcher. To gather primary data for this study, standardized questionnaires were used. The collected data were subjected to correlation analysis, with the findings presented using scatter diagrams. The study established a positive linear relationship between the financial performance of SMEs and each of the variables: capital adequacy, human resources commitment, and customer loyalty.

Exchange Rate Volatility and Its Effect on Trade Export Performance in Kenya

The relationship between exchange rate volatility and economic growth has received relatively little attention from both theoretical and empirical perspectives. This is because, the exchange rate is considered as nominal variable and not related to the long‐term real growth performance. Kenya has faced massive blows like the terms of trade becoming worse mainly due to fluctuation in internal product prices, oil prices and fluctuation in a flow of capital which have led to challenges in microeconomic management policy. Empirical evidence offers mixed findings regarding the impact of exchange rate volatility on growth. It argued that pegged regimes increases investment and volatility of growth and employment but reduces productivity growth and inflation. Depreciation of Kenya’s currency implies that the incomes of their trading partners increase and will tend to import few goods, and this places Kenya’s exports at disadvantaged position in international markets. Further, exchange rate volatility in developing countries is characterized by changes in, changes in global demand for goods policies and changes prices of goods. This article investigated the exchange rate fluctuation in Kenya. investigation found that Kenya’s exchange rate has been volatile with major structural breaks in 1994 and 2012. Devaluation of Kenya’s currency implies that the incomes of their trading partners increase and will tend to import few goods, and this places Kenya’s exports at disadvantaged position in international markets. Further, exchange rate volatility in developing countries is characterized by changes in, changes in global demand for goods policies and changes prices of goods.

Effects of Employee Job Commitment on Organizational Performance in Kenya: A Case of Huduma Centre – Baringo

Employee job commitment continues to influence the work performance of employees in many organisations around the globe. While there has been broad research to understand the effect of employee job commitment, there is limited evidence to show the effect of key employee job commitment on the performance of Huduma Centres. The study focuses on examining the effect of employee job commitment on organisational performance, in the case of the Huduma Centre. Social exchange theory is the theory upon which the study is anchored. This study used the descriptive research design to examine the effect of employee attitudes on the organisational performance of Huduma Centre, Baringo. This study conducted a census of 60 employees who were administered with questionnaires comprising mainly of closed-ended questions. The study used questionnaires to collect data from non-supervisory and supervisory staff respondents. The collected data was then coded and analysed with the help of analytical software. Descriptive measures were used to analyse quantitative data, specifically the mean and the standard deviation, while for inferential statistical techniques, Pearson correlation was used. Frequency tables were used to present the data. The study ensured informed consent, confidentiality, and anonymity were observed when collecting and processing the data. The demographic data results indicated that the majority of the respondents were female, married, had a diploma, and had served an average of three and half years at the Huduma Centre. The study findings indicated that there is a strong positive relationship between job commitment and organisational performance (r = 0.556**, p < 0.05). The findings of the study have an implication for Kenyan public sector policymakers on the need to enhance job commitment so as to increase service delivery of Huduma Centres.

Understanding entrepreneurial vision for growth, innovation and performance in Kenya’s leather industry

While entrepreneurial orientation’s role in determining performance of businesses has been empirically established, studies from Africa or an industry-ecosystem perspective have been scarce. Furthermore, the significance of an entrepreneur’s vision is often acknowledged but little studied in relation to entrepreneurial outcomes. This study explored vision for growth as an individual entrepreneurial disposition and its relationship with innovation and performance outcomes among industry actors. The study collected self-reported quantitative data from a mixed sampling of value-system actors as representatives of the Kenyan leather industry. SPSS v.21 was used for descriptive statistics and SMART-PLS3 for exploratory and inferential analysis. Vision for growth was shown to determine both innovation and performance while innovation did not mediate the vision for growth and performance link as hypothesized. This study contributes to a further understanding of psychological perspectives of entrepreneurship, especially the vision for growth construct, and its significance to firms in an industry ecosystem. Recommendations are made for further research, training, policy, and practice interventions aimed at enhancing entrepreneurial vision and innovation from an industry-ecosystem perspective for realization of economic benefits in the wake of globalized competition.

Effect of Real Exchange Rate Volatility and Selected Macroeconomic Variables on Trade Exports Performance in Kenya

Kenya’s export performance is still constraint by high level of inflation, high-interest rates, low savings, low investments, and fluctuating exchange rates. Generally, Kenya’s exports have performed dismally in the recent past. It is not yet clear as to whether this poor export performance can be attributed to exchange rate volatility since, existing empirical evidence show mixed findings. The study sought to establish the impact of exchange rate volatility on Kenya’s exports performance for the period 1974 – 2018. Autoregressive Distributed Lag model (ARDL) with bounds test was estimated and it was found that ARCH term t-ratio was significant which indicated that exchange rate is volatile. exchange rate volatility, terms of trade, inflation money supply and trade openness were significant. Based on these results, it is recommended the government should reconsider exchange rate policies that will prevent high exchange rate fluctuations, suggests that the monetary authorities in the Kenya should come up with monetary policy strategies that will help drive the economy better are necessary for economic expansion, Kenya should maintain its market determined exchange rate and implement a monetary policy aimed at confining inflation to levels that are at par or lower than those of trading partners, the government should review trade policies and take advantage of trade openness to reap from trade liberalization. The study further realized interdependence between exchange rate stability, macroeconomic stability and export performance and hence policy makers need to consider the existing degree and likely effects of exchange rate volatility while designing, developing and implementing trade policies in Kenyan Economy.

Effect of Real Exchange Rate Volatility and Selected Macroeconomic Variables on Trade Exports Performance in Kenya

Effect of Real Exchange Rate Volatility and Selected Macroeconomic Variables on Trade Exports Performance in Kenya

Institutional Rationale for Balanced Scorecard Adoption and Performance of Kenya's State Corporations

The purpose of this study was to determine the relationship between institutional rationale in balanced scorecard adoption and the performance of state corporations of Kenya. The research design employed in this study was an explanatory cross-sectional survey design. The research population consisted of 96 managers of state corporations in Kenya. Structured questionnaires containing closed-ended questions were administered using the drop and pick method. A total of 92 questionnaires were returned representing a response rate of 96%. Statistically, this was large enough to render the results permissible and acceptable as a representation of the entire population. The results indicated that institutional rationale in balanced scorecard adoption is a good predictor of organizational performance of state corporations of Kenya supported by (F=8.824, p<0.001). Further, institutional rationale and organizational performance had a positive and significant relationship (B=0.517, p<0.001.