ABSTRACT To minimize the total loan portfolio risk, it is important for commercial banks to consider diversifying their corporate loan portfolio. Yet, research indicates that the effect of such diversification has conflicting findings by various scholars. This study therefore sought to establish the association between corporate loan portfolio diversification and credit risk management among commercial banks in Kenya. The specific objectives of the study included: to determine the relations...
ABSTRACT Resources are scarce. Public and private entities must ensure that available resources are allocated efficiently and utilized for the intended purposes in order to achieve strategic objectives. In Kenya, the principles of public finance are enshrined both in the constitutions and various legislations, the most important of which is the Public Finance Management Act. While both National and County governments are expected under law and by the citizenry to pursue optimal financial per...
ABSTRACT Financial leverage decisions are critical since they significantly explain firm financial performance. There is lack of consensus (from empirical literature) in respect to the nature and strength of relationship between firm financial leverage and financial performance. Moreover, the impact of financial leverage on different measures of financial performance is varied. Most agricultural co-operative societies in Kenya have not achieved their potential due to poor financial performan...
ABSTRACT The non-performing loans ratio among Kenyan lenders rose to a 10-year high in the third quarter of the year 2018 as commercial banks struggled with loan defaults in a tough economic environment. The rise has mainly been driven by business borrowers and has affected largely banks in tier 2 and 3, a research report by Standard Investment Bank showed. Businesses in the country have struggled with a tough operating environment this year as credit growth ground to a halt on the back of a...
ABSTRACT Technological changes and innovation in any economy play a pivotal role in reducing operational expenses and increasing total factor productivity. The Kenyan banking sector is characterized by operational inefficiency in the factors of production as evidenced by high operational expenses. The inefficiency in the factors of production can be reduced through adoption of new technology and innovation. This study examined how technology and innovation can remedy the inefficiency by inv...
ABSTRACT Financial distress prediction is a global challenge. The study on financial distress has become more relevant and important because even large firms are failing under unforeseen circumstances causing economic and social problems. Managerial decisions determine firm’s direction, during business cycle process. Many companies have gone into bankruptcy despite using different prediction models. Despite their good rating, they are still prone to financial distress problems. In addition...
ABSTRACT The trading with derivatives has developed over a long period of time though the greatest impact has been felt over the last three decades. Derivatives markets have changed overtime from trading with the simple contracts to very advanced and exotic instruments. Though Kenya has been lagging behind in the derivative markets development, a lot of ground work has been put in place for the trading with legislature in place and the CMA putting up a department to oversee the development. ...
ABSTRACT Foreign direct investment (FDI) is an essential part of any economic system and it is an incentive that allows economies to grow. However the positive results of FDI are not accessed by all countries, communities or sectors. The performance of commercial banks in Kenya has been found wanting for the last five years with some banks reporting profit warnings and two banks being placed in receivership in the year 2015. Similarly, foreign direct investment in Kenya has been fluctuating....
ABSTRACT Dividend policy is a widely researched topic in the field of corporate finance; however, it still remains a mystery as to whether dividend policy affects the share prices of quoted firms. During the period under review (2001-2011), share prices of listed firms in the Nairobi Securities Exchange severely fluctuated making it difficult for investors to make informed investment decisions. The general objective of this study was to investigate the effect of dividend policy (cash and sha...
ABSTRACT Agriculture has been a major source of the country’s food security and a stimulant to offfarm employment but agricultural production is on decline. Most firms in the agricultural sector have not lived to their expectations and have led to shareholder apathy thereby contributing to the decline of the rural economy due essentially to unstable and low dividend payout. The dividend policy is one of the most debated topics in finance literature. One of the different lines of resear...
ABSTRACT Micro and Small Enterprises have a huge responsibility of promoting economic development of many nations in the world today. However, in third-world countries, sector has recorded poor performance even though they take a huge fraction of local businesses. It has been established that approximately 80% to 90% of MSEs collapse their operations within a decade. However, studies from developed nations find financial management practices to contribute immensely to MSEs’ unfavourable bus...
ABSTRACT The study investigates the effect of public debt on economic growth in Kenya, between 1980-2013.The choices of period was guided by data availability and escalation of Kenya’s public debt. The main problem is that, Kenya government has been relying heavily on public debt, aid and grants as a source of finance. This has resulted to a buildup of the level of public debt stock which has led to funds being diverted to debt servicing at the expense of economic development and domestic c...
ABSTRACT The existing literature links poor financial performance among non-financial listed firms in Kenya to long-term funding conduct of these firms. However, as important as longterm financing decisions are, they are made less frequently, while the day-to-day decisions involving the management of short-term financing components consume tremendous amounts of management time. Poor short-term financing decisions impair the firm’s ability to remain operating. This study therefore inves...
ABSTRACT Delinquent loans are on the rise both globally and locally leading to closures, receiverships and even collapse of institutions receiving and offering loans. Delinquent loans in the agriculture sector stood at 4% in the USA, 40% in India in 29015, 51% in Nigeria in 2012, 29,3% in South Africa in 2016. This rose from 5.45 Billion in 2009 to kshs8.383 Billion by 2015 in Kenya and at 22% specifically in the tea sector by June, 2017. The agricultural sector plays a very critical role in ...
ABSTRACT The purpose of this study was to analyze the effect of integration on stock market investment portfolio diversification in East African stock exchanges. The study was based on the Nairobi Securities Exchange, Dar-es-salaam Stock Exchange and Uganda Securities Exchange with the target population of all the companies whose common stocks were traded over the sample time period. Covering a period of 100 months between January 2000 and April 2008, the researcher analyzed the pair-wise ind...