MCOM Theses and Dissertations (2012)
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- ItemAn examination of the policies and practices towards promoting SMEs development in Mwanza, TanzaniaNtakabanyula, Fredrick Phinias; Koshal, Jeremiah Dr.This study examines policies and practices toward promoting SMEs development in Mwanza, Tanzania. It was guided by three specific objectives; examining public policies and practices toward SMEs promotion, examining MFIs policies and practices toward SME promotion, as well as examining the contribution of Tanzania enterprise culture to SMEs development. The period from 2000 to 2009 is chosen due to the fact that numerous government policies and strategies were established and implemented in the country to stimulate the SME sector. The data was collected through interviews and questionnaires from SMEs operators, MFIs loan officers and government officials. The research finds that the establishment of SMEs is motivated by push factors. Such factors include lack of adequate formal education, lack of alternative payable employment and loss of jobs. The research also finds that Tanzania education system limits the creation of an enterprise culture. This is due to the fact that it prepares students or people for white collar jobs. Moreover, most MFIs policies and practices hinder the development of SMEs. This is shown by the placing of more emphasis on loan provisions and less on business skills generation. Lastly, the research finds that public policies and practices are not geared toward SMEs promotion. This is due to lack of clear guidance on what should be done to promote entrepreneurship development in the SME sector. The study suggests future research to be undertaken in examining public policies fostering entrepreneurship and its impact on the macro economy, the taxation system and interest rates charged to SMEs as it has been found to be a problem to the sector.
- ItemAn analysis of the challenges that multi-funded NGOs in Kenya face in financial reporting(2012) Ayuma, Chibole E.Financial reporting generally involves the public issuance of financial statements and their related notes and disclosures as set forth in accounting standards and requirements. NGO financial statements provide insight into the sources of funding, the cost of service delivery, and an organization's ability to operate in the future. The purpose of this study was to analyze the challenges multi-funded NGOs face in financial reporting. The study adopted an explanatory research design on a sample of eighty six senior finance personnel in multi- funded NGOs. Primary data was collected using questionnaires and data analyzed using descriptive and inferential statistics (t-test and chi-square test). In relation to donor requirements, the entire respondents acknowledge that donor requirements are not similar and all of them expect the organization to meet their (donor) requirements. From the findings, most donors require an annual audit of the funds donated. The analysis shows that varying donor and regulatory requirements create challenges in financial reporting. Varying submission of financial reports time-lines also creates challenges in financial reporting. From the findings, qualification inadequacy of the accounting staff will result in financial reporting challenges. All the respondents strongly agreed that investing in a good accounting system ensures good financial reporting. The findings indicate that inferior financial accounting systems will affect financial reporting and varied transaction and reporting currencies create challenges in financial reporting. The findings illustrated the need to incorporate the Standard Operating Reporting Procedures in financial reporting in NGOs to reduce these challenges. Further studies are recommended in finding out more challenges that affect financial reporting in multi-funded NGOs in Kenya as well as studies that will ascertain the effectiveness of Standard Operating Reporting Procedures in Kenya.
- ItemAn assessment of the effect of Agent Banking on financial inclusion of low income households in Kenya(2012-06) Matoke, Sylvia N.There is a serious problem of limited access to financial services among low income households as majority of low income households keep their money under mattresses or in "home banks". In recognition of these hurdles, agent banking has been flaunted by financial stakeholders as with potential to include many "unbanked" low income households. Proponents of financial inclusion argue that including 38% of Kenyans without access to even the most basic financial services will enable low income communities build savings and access credit. While these arguments have often provided the theoretical justification for widespread government intervention, evidence on the success agent banking in including low income households in Kenya in the financial mainstream is not clearly known. Specifically, the research intended to establish the extent to which agent banking has enabled the residents of Kibera slums access financial services such as micro-credit and micro-savings. Self-administered questionnaires were distributed to 80 respondents residing in Kibera slums .The respondents were randomly selected from the 6 regions of Kibera slums. Findings were summarized and presented in terms of tables and figures. Anova was used to determine the saving patterns of the respondents. The findings suggest that while there has been an increase in the number of low income households in the financial mainstream. there is no clear correlation between agent banking and increased savings and access to micro-credit facilities among the low income households in Kibera slums. This study concludes that inclusive banking does not necessarily result to automatic exit from poverty by poor households. The study recommends revision of agent banking in relation to the needs of poor households.
- ItemAudit Quality Attributes and Client Satisfaction in the Public Sector in Kenya(Strathmore University, 2012) Atila, Grace Asiko OwendoThe study sought to determine if there exists a relationship between audit quality attributes previously identified in the academic literature and client satisfaction in the public sector in Kenya and the extent of the relationship if it did exist. To address this purpose, heads of accounting units in government ministries were surveyed using the research questionnaire. The audit quality attributes studied were: Responsiveness to the client‟s needs Interaction with the audit Committee and the Conduct of the audit process. The study found that there existed a strong positive relationship between both the responsiveness to the client‟s needs and the conduct of the audit process and client satisfaction both of which were significant. Relationship between interaction with audit committee and client satisfaction was found to be weak and positive. In addition, the heads of accounting units in government ministries provided several suggestions for improving the service quality of audits in the public sector. The most common suggestions were: the need for public sector auditors to acquire skills in technical areas and the need for the auditor to be conversant with the government‟s Integrated Financial Management Information System (IFMIS).
- ItemBank efficiency in Kenya(Strathmore University, 2012-04) Maloba, Paul EsereaBanks in their role of financial intermediation facilitate transfer of funds from surplus units to deficit units. Efficient banking institutions therefore ensure that allocation of funds is prioritized to viable investments and thus spur economic growth. This study employs a non-parametric DEA methodology to measure efficiency levels of Kenyan banks over the period 2004 to 2010. The differences in efficiency between foreign banks and domestic banks are then evaluated. Further, the study sought to establish the sources of bank efficiency for banks in Kenya. Foreign banks were found to be more efficient compared to domestic banks. However, an analysis of efficiency based on bank size reveal that large domestic banks are more efficient compared to large foreign banks. Estimation results further suggest that foreign banks import systemic inefficiencies. Foreign banks were found to have an appetite for government securities, further investigation is necessary to establish the motivation by foreign banks towards government securities.
- ItemCorporate internet reporting practices by companies listed on the Nairobi stock exchangeKang'otole, Johnstone Kimanzi; Waweru, Nelson (Dr.)This study‟s main objectives are to establish the current internet reporting practices, ascertain the factors perceived to be influencing Corporate Internet Reporting (CIR) by the companies quoted on the Nairobi Stock Exchange (NSE) and explore the benefits and limitations of CIR as faced by the companies listed on the NSE. The sample of this study comprised the 30 listed companies that had accessible websites and responded to the study questionnaire. This study analysed the contents of all the 30 companies‟ websites to ascertain the nature and extent of current internet reporting practices by the companies listed on the NSE. Data for this study was collected in two stages. First the information disclosed by companies on their websites was checked against a disclosure index. The second stage was via a self-administered questionnaire sent to the companies with accessible websites. The questionnaires were administered in June 2011. The resulting data was then analysed and the results presented in charts and figures. The results obtained led to the conclusion that profitability, industry competition; growth rate and corporate size were the important factors influencing CIR by the listed companies on the NSE. The result of this study makes the following contribution to the knowledge of CIR on the NSE. Firstly, this study will be of help to the listed companies by aiding them in establishing better online reporting practices especially in this era of unprecedented internet revolution in Kenya. Secondly other companies in different industries will be able to tap the knowledge from this study to build into the reporting practices they are currently using. Further, the results of this study might be useful to the standardising or regulating bodies in Kenya in formulating policies to govern and guide online disclosure for all companies listed on the stock exchange market. Finally, the study results will act as a guide to stimulate further research on CIR or into other related subject matter.
- ItemDeterminants of Know Your Customer (KYC) Compliance Among Commercial Banks In Kenya(2013-11-13) Ottichilo, Linah M.Studies conducted have focused on analyzing the effectiveness of Know Your Customer (KYC) programs in combating money laundering and other fraud related risks in financial transactions involving customers. The studies showed that if KYC programs were implemented effectively, the risks associated with money laundering and fraud could be significantly mitigated. In Kenya, implementation of KYC requirements became a statutory requirement for financial institutions after the Proceeds of Crime and Anti-money Laundering Act was passed in 2009. Little has been done to assess what factors determine compliance with the KYC requirements stipulated in the regulation. The main focus of this study was to fill this gap by examining the factors that determine KYC compliance by commercial banks in Kenya. The study carried out a survey of commercial banks in Kenya with regards to KYC compliance. The commercial banks and a mortgage finance company totaling 44 formed the sample of the study with the top and middle supervisors responsible for implementing KYC forming the target respondents. Comparative analyses based on the data collected from 30 commercial banks which responded as well as interviews with practitioners were analyzed using regression analysis to determine the relationship between KYC compliance and the identified variables. The study's findings reveal that staff competency and bank Size are the key determinants of KYC compliance. Customer verification procedures and Information Communication Technology infrastructure was found to have a minimal effect on compliance. Further research is recommended to be carried out to establish how the use of ICT can assist in complying with the KYC requirements.
- ItemThe effects of bank characteristics on market risk disclosure : case of listed commercial banks in Kenya(Strathmore University, 2012) Wahome, Millicent NyawiraThe purpose of this study was to determine the effects of bank characteristics on market risk disclosure. Commercial banks need to be regularly monitored in order to monitor, manage and evaluate risky activities that may lead to loss of depositors’ funds or collapse the financial intermediation system. The relationship between four bank characteristics namely size of a bank, profitability of a bank, leverage of a bank and depositors’ knowledge were modeled against market risk disclosure. Both primary and secondary data were obtained for this study. Primary data was obtained through the use of questionnaires from depositors of listed commercial banks while secondary data was collected from financial reports, notes to accounts, Chairman’s and CEO’s reports and from Nairobi Securities Exchange for the years 2004 to 2009. The study found that 68% of variation in Market risk disclosure can be explained by size, profitability and leverage and depositors knowledge. The study also sought to compare market risk disclosure patterns before and after IFRS adoption. Before adoption of IFRS, larger banks and more profitable banks disclosed more market risks that they faced while highly leveraged banks disclosed less compared to the less leveraged banks. It was established that profitability and depositors knowledge were significant and positively influenced market risk disclosure while size of the bank and leverage were insignificant at 5% level of significance. The study also revealed that after adoption of IFRS disclosure standards, more profitable banks were more likely to disclose more market risks information than less profitable banks. In addition, highly leveraged banks have lower market risk disclosure levels compared to less leveraged banks. The study concluded that adoption of IRFS disclosure standards played a significant role in improving market risk disclosure. Profitability continued to play a critical role in signalling their superior performance and sound risk management while depositors’ knowledge increased respondents’ confidence in commercial banks. The study recommends a bigger sample and more bank characteristics should be studied in order to confirm or reject the findings of this study.
- ItemEffects of information technology on the financial performamce of small and medium sized enterprises : a case of SMEs in NairobiGikonyo, Geoffrey Mungai; Mboya, Josphat KiweuThis study examines the effects of Information Technology (IT) on the financial performance of small and medium sized enterprises (SMEs) situated in Nairobi. The primary objective of the study was to examine whether there is any relationship between the use of IT and firm performance. Data was obtained through the use of purposive sampling from the National Social Security Fund (NSSF) Register of Kenya database as of 2009. The purposive sampling employed on the SMEs registered in the NSSF register led to the database of a leading IT firm which then formed the population of the study. The data obtained was analyzed through the use of descriptive analysis and also through the use of ordinary least squares regression analysis. The key finding of study was that firm performance and IT use are positively correlated. It also found that of the factors that affect the use of IT, only the level of spending on IT systems and the organizational structure of a given firm have a significant effect on IT use and its subsequent effect on firm performance. The study suggests that firms should place more emphasis on the role that individuals play within the organization since the organization will tend to perform well when each individual plays their role well. Further research is recommended to be carried out through the use of other methodologies so as to examine different angles of the role of IT in SME performance improvement.
- ItemExamination of factors influencing lending decision to SMEs : a case of finance providers in TanzaniaMagreth, John Pallangyo; Mboya, Josphat KiweuThis study examines the factors that finance providers in the mainland of Tanzania consider important in SMEs lending decisions. Data were collected from the headquarters of finance providers in Dar-es salaam. A sample of 32 out of 46 finance providers was studied. Data was collected through questionnaires. The statistical analyses included descriptive statistics (mode and mean ranks), and Pearson chi-square. The findings show that the most critical criteria that are used by the finance providers to accept or reject the SME loan proposal were collateral, bank policy, risk of the default, size of the loan, credit history, net profit to sales, existing profitability, repayment of the previous loan, trading experience, repayment schedule, type of business, purpose of the loan, business ability and honesty, projected income, gearing, liquidity ratio, equity stake, management skills, and maturity. Using Pearson chi-square (x²) the association between factors was examined whereby the empirical results indicate that there is an association between having audited financial statements and access to credit. There is also an association between collateral and access to credit. When financial information were unavailable or unreliable, finance providers ranked very high the use of industry sector information, ownership type information, age of the firm information, work experience information, location of the firm information, firm size information, and education background information. The research concludes that lack of financial information and inability to present appropriate collateral are the reasons why finances are not available from the finance providers.
- ItemAn exploratory study on the relationship between marketing mix decisions and the success of micro and small enterprises: a case study of Westlands Shopping Centre, Nairobi(Strathmore University, 2012) Otieno, Dorcas AwitiThis study set out to explore the relationship between marketing mix decisions and the success of micro and small enterprises. This main objective was broken down to 3 specific objectives: to understand the general characteristics and general marketing environment of Micro and Small Enterprises (MSEs) in Westlands; examine the significance of the correlation between marketing mix elements and success of micro and small enterprises; and observe and understand the combinations of the marketing mix elements relevant to success within specific industries in the MSE sector. The study was carried out in Westlands shopping centre that has a population of about 400 MSEs. The study was exploratory in nature and thirty one businesses were used for analysis. Purposive sampling was used to derive the final sample. Minitab and Microsoft Excel were used to arrange and analyse the data. Responding to research, this study categorised MSEs into four distinct categories. General characteristics such as, age, experience, motivation and challenges were comparable across groups. The study added to literature by establishing that there are indeed significant industry differences among MSEs and this does indeed affect their marketing activities. All categories except professionals relied on the consumer market. Variability across all categories in terms of the number of marketing activities employed was significantly different for all the marketing elements except distribution. Also, the versatility in marketing activities across groups was significant. Traders were the most versatile category followed by professionals, entertainment houses and artisans respectively. In terms of success, the only significant differentiator was in the self-claimed definition of success (objective versus subjective). Otherwise, across groups there was no real difference in the exhibition of the success variables given by the research. However, there were tendencies that could be further explored in later research. The relationship between the type of customer and the level of marketing done is an area that could be studied. Further, the tendencies of exhibiting certain variables in success by specific industries should be studied. A study on how business orientation affects the marketing activities done would also be a good area to study especially for successful MSEs.
- ItemMonitoring compliance to determine the effectiveness of the Kenya Association of Stockbrokers code of ethics by members firmsKimeu, Abraham Mwose; Dimba, BeatriceThis study monitored the effectiveness of the Kenya Association of Stockbrokers (Kasib) code of ethics by looking at whether members complied with factors known to make for effective codes such as leadership and method of code implementation, and the role of the Capital Markets Authority (CMA) of Kenya when it came to codes. The study was descriptive and used questionnaires to collect data from stockbrokers while secondary data was used in gathering information about the CMA. Results were mixed showing that while some Kenyan stockbrokers do have codes of ethics which detail sanctions for violations and offer some form of ethics training, others do not. The piecemeal implementation suggests that Kasib seems to lack teeth to enforce these compliance factors necessary for code effectiveness. While the CMA encourages codes of ethics it does not actively monitor their implementation as its main concern is with fraud. As such, it regulates the stockmarket through market surveillance, on and off site inspections of stockbrokers and has recently moved to risk profiling. This suggests that the haphazard implementation of codes of ethics may be due to the lack of enforcement of codes by the CMA This study recommends engagement between stockbrokers and the CMA on code of ethics issues so that codes of ethic can be adopted and implemented successfully by stockbrokers. Kasib also needs to enforce its code of ethics by punishing members that do not adhere to the code.
- ItemMovements in foreign currency exchange rates and operational performance(2013-11-13) Therese, Onyango M.; Mboya, Josephat (Dr.); Wang'ombe, David (Prof.); Kiraka, Ruth (Prof.)This study examined the relationship between changes in foreign currency exchange rates and operational performance of hotels in Nairobi. In doing so, it sought to determine whether operational controls can be used to reduce foreign currency exchange risks in hotels in a developing country. The population for the study was the five-star hotels in Nairobi. Data on hotel occupancy, currency exchange rates, market interest rates and inflation was collected from a sample of hotels in Nairobi, Central Bank of Kenya and the Kenya Bureau of Statistics over a period of four years (2007-2010). A survey was also carried out. Step-wise regression model was used in analyzing the data. The key finding in this study showed that there was a significant positive relationship between operational performance and movements in currency exchange rates. The study also found that interest rates were not an important factor in determining operational performance of hotels in developing countries.
- ItemRationale for use of forensic accounting in reducing audit expectations gap : a case for central Kenya cooperative societiesWanjohi, Festus M.; Mboya, Josphat KiweuThis study examines the rationale for the use of forensic accounting as a mechanism for reducing the audit expectations gap. Fraudulent activities in Kenya have been responsible for widespread collapse and poor performance of firms, hence the potential use of forensic audit to detect frauds and narrow the audit expectations gap. The study tests empirically the three hypotheses that, first, the audit expectations gap exists in Kenyan audit engagements; secondly, the introduction of forensic audit will be an important mechanism in reducing audit expectations gap; and thirdly, the introduction of user education and better auditing and accounting standards are other important mechanisms for reducing the audit expectations gap. The study employs a descriptive research study design. The study uses a sample of 134 respondents, comprising of 118 cooperatives and 16 audit firms which were selected using a stratified systematic sampling approach. The data collection instrument preferred for the study was a questionnaire. The data was analyzed using inferential statistics such as Chi square statistics, f exact test, one sample and two sample tests. Study findings indicate that there is a significant difference in responses between auditors and cooperative members. These findings imply the existence of audit expectations gap in Kenyan audit engagements. In addition, t-tests indicate that forensic accounting, user education and better auditing standards are important mechanisms in reducing the audit expectations gap. The study contributes to literature on the discourse of the audit expectations gap which is scarce in Sub-Saharan Africa in general and Kenya in particular.
- ItemThe influence of human resource management practices on firm performance in the Kenyan banking industryShitsama, Belinda MasitsaOver the last decade, much research has been conducted in the field of human resource management (HRM) and its associations with firm performance. For firms to survive in a global economy in the new millennium, they need to exploit all the available resources as a means of achieving competitive advantage. One resource recognized as providing a source of competitive advantage is the human resources of the firm. The main objective of this study was to establish the inf1uence of human resource management practices on performance ofbanks in Kenya.The specific objective of this study was to; establish the effect of selection and recruitment on performance; to gauge the effect of training and development on firm performance, to determine the effect of performance appraisal and compensation management on firm performance.The research used a descriptive quantitative approach. The target population of this study was all the 43 banks in Kenya. Piloting was carried out to test the validity and reliability of the instrument (questionnaire). The researcher perused the completed research instruments and document analysis recording sheets. Quantitative data collected using questionnaires was analyzed by the use of descriptive statistics using SPSS (Statistical Package for Social Sciences) and was presented through percentages, means and frequencies. The findings show that recruitment and selection is effective but is done less often in the banks and that the application of the right practices in recruitment and selection enhances organizational performance. The study also found out that training and development alongside performance appraisals also affect performance of the commercial banks. On the same note, the study established that rewardl compensation affect the performance in the banks. The findings revealed that the banks had performance appraisal systems and were effective. The developmental purpose of performance appraisal is more productive in inf1uencing organizational performance. Finally, the study established that for a remarkable firm performance, constant fixed salaries are better than higher ones, and irregular hourly rates and bonuses should be distributed to all employees who have helped the organization achieve goals.
- ItemThe Relationship between corporate governance and audit fees : a case study of non-financial companies listed on the Nairobi Securities ExchangeNyamosi, Wilson Omwoyo; James Boyd, McFie (Dr.)This thesis consisted of two empirical studies. First, it examined the relationship between corporate governance mechanisms (relating to boards’ of directors characteristics) and audit fees in the Kenyan context. Secondly, the study also examined compliance with the corporate governance disclosure requirements for listed companies in Kenya. The purpose of the study was firstly, to contribute to understanding how various boards’ of directors characteristics as required by the Capital Markets Act, Chapter 485A of the Laws of Kenya, (2002), affect external audit fees in Kenya. Secondly, the study sought to explore corporate governance disclosure aspects of listed companies in Kenya. The study adopted the pooled ordinary least squares regression model for a sample of thirty non-financial listed companies out of a population of fifty-three companies listed on the Nairobi Securities Exchange at the time the study was done. The multivariate regression results suggest that board expertise and board size are positively related to audit fees. The other characteristics of board independence and board diligence provide inconsistent results with audit fees. The control variables of total assets and complexity are significant; the financial risk and company leverage variables are found to be insignificantly related to audit fees. On the adequacy of corporate governance disclosure by listed companies in Kenya, a good system of corporate governance requires a good level of disclosure and adequate information to reduce information asymmetries between parties. The degree of disclosure results show that eight companies, that is, 26.6% have a corporate governance disclosure index of between 81% and 100%. This means that 73.4% of the companies in the sample did not attain the adequacy level; thus, the corporate governance disclosure level in Kenya is low. With regard to the relationship between boards’ of directors characteristics and the level of corporate governance disclosure compliance by listed companies in the Kenyan securities market, the multivariate regression results suggest that board independence is positively related to the level of corporate governance disclosure. The study finds no evidence that board diligence, board expertise and board size are related to the level of corporate governance disclosure compliance by listed companies. The control variables of total assets, company leverage and industry type 1 are significant; industry type 2, industry type 3 and industry type 4 are found to be insignificantly related to the level of corporate governance disclosure.