MDF Theses and Dissertations (2021)
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- ItemEffect of drivers of responsible banking activities on performance of Commercial Banks in Kenya(Strathmore University, 2021) Chege, Denis GathuGlobally, commercial banks have been keen on executing responsible banking initiatives in developed countries at a higher pace than in developing economies. This has resulted in major international banking institutions recording better financial returns. Locally, as of 2015 only 9 commercial banks had made strides in the adoption of responsible banking, despite the immense impact the activities have on the banks’ bottom line. Further, with increased evidence of the importance of adopting responsible banking initiatives to support financial performance there has been less than adequate examination of their contribution within Kenyan banks. The aim of this study was to examine the drivers of responsible banking-related initiatives and their effects on financial performance of commercial banks in Kenya. The study specifically analyzed the extent of adoption of responsible banking initiatives, the drivers of adoption and the impact of the drivers of responsible banking activities on the performance of banks. The study was grounded on the market power theory and institutional theory with a positivist philosophy being adopted in the research. The study further applied a descriptive research with the unit of analysis being the operational 41 commercial banks. The study sampled 135 officials drawn from the operational commercial banks. The study data were collected from structured questionnaires and the audited financial statements of the commercial banks and Central Bank of Kenya (CBK) reports. The study utilized descriptive analysis, explanatory factor analysis and regression analysis. The findings were presented graphically using charts and tables. The study was able to obtain a 76% response rate. The Spearman rank correlation tests indicated there was a positive and significant effect of management support, strategic position, regulatory environment on responsible banking activities and performance of banks. The ordinal regression findings showed there was a significant and positive effect of responsible banking activities and regulatory environment on bank performance. Further, findings indicated a negative and significant effect of management support on adoption of responsible banking and bank performance. Lastly, findings established a positive and insignificant effect of strategic planning on the bank performance. The study recommends that commercial banks should improve alliances and collaborations that can support meeting of sustainable banking standards within the banking industry. The study also recommends that commercial banks should continuously review their adoption of responsible activities that can support development of green finance within the industry. Further banks should review their internal operations, improve coordination, positioning and adherence to regulations which can all lead to better performance
- ItemEffect of blended finance approaches on the extent of implementation of water and sanitation projects in Kenya(Strathmore University, 2021) Stephen, Eunice MueniInvestments in water and sanitation are critical ingredients for the development and growth of economies. Blended financing is a structuring approach that enables different stakeholders to pool their resources together in investments for financial return, boosting economic growth in developing countries. The development of the blended financing market has led to eminent traction towards developing sustainable infrastructure, bridging the financial gap to attain the Sustainable Development Goals enabling the private sector's participation. However, little has been documented on the effectiveness of blended financing on the implementation of Water and Sanitation and Hygiene (WASH) projects in Kenya. As a result, information on funding blended and its efficacy on attracting commercial funding is not known and where it is known; that information is limited or has not been shared with the public, creating a gap in knowledge use of blending financing. Therefore, this study sought to evaluate the effectiveness of different blended financing models in Kenya's WASH projects. Specifically, the research was after investigating the effects of output-based approach, credit guarantee approach, technical assistance approach, credit rating approach and the moderating effect of type of investor on the relationship between blended financing approaches and the implementation of water and sanitation projects in Kenya. The research was anchored on the resource dependency theory. The study utilized a descriptive research design to collect both quantitative and qualitative data. The population of the study is 100, and the sample size of the survey is 80, comprising of representatives from donors of the projects, water service providers, staff members from the Water Sector Trust Fund, and officials from banks which provided credit towards financing the WASH projects from 9 projects in 6 counties namely; Murang’a, Nyeri, Kajiado, Embu, Kisumu, and Nakuru. The Water Companies in the selected regions have implemented World Bank projects funded through the blended financing approaches that form this research's objectives. The analysis was quantitative and utilized both primary and secondary data. Primary data was collected through questionnaires, while secondary data was sourced through secondary data collection guides. The data was analyzed through the use of descriptive and inferential statistics. The study was able to obtain a 64% response rate from the sample of 80 stakeholders in the WASH projects. The regression results showed that blended financing approaches predict 20.1% of the changes in implementation of water and sanitation project in Kenya. Further, the moderate regression indicated that 46.4% of the changes in implementation of WASH projects are determined by blended financing approach and the type of investor. The study concluded that credit guarantees, and technical assistance have a positive and significant influence on WASH projects. The research further concluded that output-based approach and credit rating approach have no significant influence on implementation of water and sanitation project in Kenya. Further, the study concluded that donors and water service providers investments had a significant effect on the implementation of WASH projects in Kenya. The study recommends that project managers should seek strategic alliances that will open the financing options to the WASH projects. Further, collaboration with donor agencies and devolved governments will help in expanding the capacity and implementation success of WASH projects in the country.
- ItemThe Determinants of sustainability content integration in graduate business programs in Kenya(Strathmore University, 2021) Waireri, CeciliaBusiness schools have traditionally been seen to teach courses that are geared towards shareholder wealth or profit maximization at the expense of society or the environment. However, in recent times there has been a surge in business failures and corporate scandals and the reason for this has been identified as a loss of values. Due to this university business schools have been pressured to incorporate sustainability to focus the attitudes and perceptions of future business leaders to sustainable businesses that consider not only the shareholder wealth but also the society and environment. There is limited research carried out in African countries such as Kenya in examining the extent of sustainability integration. Given that economic sustainability is a given in business programs the study sought to examine the extent of integration of environmental, social and cross-cutting sustainability content in business graduate programs in Kenya. Previous research has highlighted that the determinant factors of size, status of the university, gender of the dean, accreditation status and mission/vision statement are the main determinants of sustainability integration in business programs. The study thus sought to determine whether these factors do have an impact on sustainability integration in Kenyan business graduate programs. A census was carried out on the graduate business programs. Descriptive research design was used. Data was analyzed using descriptive statistics, inferential statistics, factor analysis and content analysis. For social sustainability, the findings indicate that the extent of integration had an aggregate mean of 2.1 and standard deviation of 1.0 implying that social sustainability aspects in the course programs had been integrated to a small extent. For environmental sustainability, the findings indicate that the extent of integration had an aggregate mean of 1.2 and standard deviation of 0.4 implying that environmental sustainability aspects had not been integrated in the course programs. For cross-cutting sustainability, the findings indicate that the extent of integration had an aggregate mean of 2.1 and standard deviation of 0.7 implying that cross-cutting sustainability aspects in the course programs had been integrated to a small extent. Non-parametric mean comparison statistics showed statistically significant differences in status of the university, size of the university and sustainability inclusive mission/ vision statement in relation to the integration of social, environmental and cross-cutting sustainability aspects in business graduate programs. Further logistic regression tests carried out showed that the factors of status and size of the university were only factors that showed significant results in analyzing the relationship between the explanatory factors and social sustainability. The model (explanatory factors) explains 48.2% of the variance in the dependent variable (social sustainability integration). The logistic regression showed that for size and status of the university there is a likelihood of higher integration of social sustainability in private universities and in small and medium sized universities. The determinant factors of size, status of the university, gender of the dean, accreditation status, and mission/vision statement did not have significant logistic results in influencing environmental and cross-cutting sustainability. The study recommended that business schools in Kenya should integrate relevant social, environmental and cross-cutting sustainability aspects in graduate business programs. The universities should also streamline their mission and vision statements to become sustainability inclusive.
- ItemThe Relationship between government expenditure on education and fertility in Sub – Saharan Africa(Strathmore University, 2021) Mwangi, Susan WanjikuThis dissertation estimates the changes in fertility rates in SSA, achieved by targeting government expenditure on education towards women’s education. Additional determinants of fertility were included in the model to ascertain the predictive validity and significance of government expenditure on education. They include the contraceptive prevalence, female unemployment rate, gross national income per capita, infant mortality rate, male employment rate, urbanization growth rate, and the Tax to GDP ratio. The theoretical foundation for this dissertation is the Theory of Increasing Prosperity, Theory of Human Capital and Wagner’s Law of Increasing State Activities. Panel Data spanning 1980 – 2017 of a sample of twenty – one countries was coded into a series of simultaneous equations executed through a Structural Equation Modelling tool. The results reveal a positive and significant correlation between government expenditure on education and the female school enrollment rate. Additionally, the findings show a significant and negative relationship between government expenditure on education and fertility. More importantly, the magnitude of this effect intensifies with women’s education as a mediator. Furthermore, the aforementioned relationships remain significant in the presence of other determinants of fertility. This dissertation concludes that government expenditure has the potential to achieve a reduction in fertility as an outcome, and specifically through women’s education, resulting from the benefits of Human Capital.
- ItemFactors influencing access to finance among enterprises in the cultural and creative sector in Nairobi County, Kenya(Strathmore University, 2021) Ogutu, Erick Otieno JeanBusinesses within the Cultural and Creative Sector (CCS) are credited with contributing substantially to the economies of many countries worldwide to the extent of being described as the next frontier for economic growth through creating jobs and contributing to tax revenue. Whereas Kenya’s regulatory framework for the broader segment of Micro, Small and Medium Enterprises (MSMEs) is in place and interventions by public, not-for-profit and private sectors well established, little focus has been placed on facilitating the growth of cultural and creative enterprises which have mostly remained small-sized and informal. This study seeks to investigate the influence of business owner attributes, firm characteristics and exogenous factors on access to finance by cultural and creative sector enterprises. Using descriptive survey research design, the study targets research on a sample of 215 simply randomly selected firms in Nairobi City County, Kenya. Data analysis is objective based while analytical techniques range from descriptive frequencies to inferential statistics. Results show that, mobile money and SACCOs had the highest success rates (above 94%) of access to financial services for creative sector enterprises in Nairobi even though they were the least preferred. Creative sector enterprises preferred commercial banks whose success rate of access to financial services was low at 25%. CCS enterprises seek financing mostly to innovate on products through research (M=4.00, SD=1.04), to digitize operations such as sales (M=3.89, SD=1.35), marketing and communication (M=3.77, SD=1.08). The greatest constraints to access to finance in the creative sector were high interest rates (M=4.44, SD=1.009), cumbersome funding requirements such as collateral (M=4.14, SD=2.877) and lack of be-fitting credit product (M=3.77, SD=1.432). Key challenges facing CCS the firms include investors not understanding the creative sector (M=4.53, SD=0.964), lack of supportive policies such as intellectual property protection (M=4.24, SD=0.887), lack of IP collateral tools (M=4.04, SD=0.882). The probability of cultural and creative sector enterprises accessing finance in commercial banks decreases by 0.076 among younger business owners, increases by 0.012 among businesses that have operated for longer and increases by 0.194 for managers with a lengthy business experience and good business networks (ceteris paribus for each variable). The probability of access to finance within SACCOs increases by 0.024 among businesses that have operated for longer and, ceteris paribus, by 0.133 among businesses whose owners had entrepreneurship training. Access to finance among informal savings groups (chamas) decreases by 0.036 among businesses with higher duration of operation in the creative sector and also, separately, increases by 0.415 among businesses whose owners have entrepreneurship training. Registration status of the business was critical with access to finance within commercial banks, SACCOs and informal savings groups (chamas) increasing by 8.7%, 36% and 67%, respectively, if the business was registered. Favorable financial services provider (FSP) policy on CCS financing, ceteris paribus, increases the probability of access to finance within commercial banks and SACCOs by 7.5% and 14.5%, respectively. In conclusion, there is a desirable mix of individual attributes, business characteristics and exogenous factors which, if addressed, would increase chances of access to finance for majority of CCS businesses in Nairobi. These attributes include years of experience (the more the better), access to technical training in CCS business, access to business networks as well as having the owner register their creative enterprise to formalize business operations to increase access to finance.
- ItemThe Effect of foreign direct investment on tax revenue in Kenya(Strathmore University, 2021) Nasibu, Sharon Makena;Raising adequate domestic revenue is a challenge particularly for low and middle-income countries with low domestic savings rates. Domestic revenue shortfalls have persisted in Kenya for the last several years and in this time, public debt has ballooned and borders on unsustainability. Globalization and increased capital mobility have created pressure for governments to provide tax incentives in order to attract and retain foreign direct investment. Consequently, a “race to the bottom” has ensued in which foreign investors benefit from these tax incentives, at the expense of governments which lose much needed revenue particularly in developing countries. This study sought to determine the effects of FDI on aggregate and disaggregate tax revenue in Kenya, as well as the moderating effect of GDP per capita and trade openness on the association between FDI and tax revenue. The study was based on the theory of public fiscal behaviour and theories of tax competition. A descriptive correlational research design was adopted with the unit of analysis being Kenya. Secondary time series data was collected from relevant databases including KNBS, UNCTAD, The World Bank, and IMF. In relation to the first study objective, the findings showed that FDI stock had a negative effect on aggregate tax revenue in the short run and FDI inflows had no effect. In the long run, FDI stock did not have any effect on aggregate tax revenue but FDI inflows had a negative effect on aggregate tax revenue. Regarding the second objective, FDI stock had a positive effect on disaggregate tax revenues in the short run but no effects were observed in the long run. On the other hand, no interaction was observed between FDI inflows and disaggregate tax revenues. The third objective was to determine moderating effects of macro-economic variables (trade openness and GDP per capita) on the relationship between FDI and tax revenue. Results from hierarchical regression models revealed that trade openness and GDP per capita had a positive but insignificant effect on the relationship between FDI and tax revenue. The study concludes that FDI stock has a negative effect on aggregate tax revenues in the short run but no effect in the long run. Moreover, it is the study’s conclusion that FDI inflows have no effect on aggregate tax revenue in the short run but they have a negative effect in the long run. The study concludes that an increase in FDI stock increases disaggregated tax revenue indices while no effects are observed in the long run. The study further concludes that FDI inflows have a negative effect on disaggregated tax revenue indices in the long run, however this is not statistically significant. Furthermore, GDP per capita and trade openness do not exhibit moderating effects on the relationship between tax revenue and FDI. Among the key policy implications from this study, it is recommended that tax incentives be reduced but not completely eliminated, so as to attract and retain foreign investment while safeguarding revenue collection efforts. Gradually scaling back tax incentives while promoting other measures of attracting FDI is proposed, including but not limited to; enhancing infrastructure and technology, enhancing access to domestic markets, strengthening supply value chains and setting up investment promotion agencies to target and link foreign investors and the domestic economy. Policy makers should also focus on designing economic policies that encourage retention of existing FDI stock.
- ItemAssessing the effect of cross border facilitation measures on trade costs in the East Africa region(Strathmore University, 2021) Atieno, DonnaSuccessive rounds of multilateral trade negotiations over the years have progressively reduced traditional barriers to trade such as tariffs and quotas which are readily measurable. However, as trade becomes more liberalized, focus has now shifted to other determinants of international trade that add costs to goods as they cross borders such as procedures, paperwork and administrative formalities. Reducing these costs enabled firms take advantage of new market openings. Cross border trade facilitation particularly has been identified as a tool for increased and smoother trade between countries. In Africa, the East African countries have followed suit to encourage intra-regional trade among Partner States resulting in the need to assess the effects of these facilitation measures on trade cost. This study was guided by two objectives: to assess the effect of cross-border trade facilitation measures on trade costs in East African region; and to assess the control effect of GDP per Capita on the relationship between cross-border trade facilitation measures and trade costs in the East African region. The study was underpinned by the positivism philosophy with three theories: Comparative Advantage; Heckscher – Ohlin Model: and Simple Iceberg partial equilibrium model used as guiding principles. Panel data from secondary sources was collected and analyzed in relation to the objectives. The research conducted diagnostics tests and utilized the random effects panel regression in testing for the magnitude of the relationship between the study variables. The analysed research data was presented using tables. The findings of the study showed that overall, trade facilitation measures and GDP per capita had a positive and significant influence on the trade costs. The study concluded that: customs and border management (time to import and export and cost to import and export) have an insignificant influence on average trade costs within the region; infrastructure development index had a positive and significant influence on trade costs; the regulatory quality index had an insignificant influence on trade costs; and GDP per capita had a negative and significant influence on the trade costs. The study recommended that member states should invest more in improving their infrastructure which is critical in conducting trade in the region; that member states should formulate and implement policies that can boost economic growth and development; and that member states should ramp up their efforts to implement the trade facilitation measures by taking advantage of the technical capacity building being offered by WTO as part of the Trade facilitation Agreement (TFA) to build its capacity to implement the trade facilitation reforms.
- ItemFactors undermining the effectiveness of social protection programmes as a poverty eradication mechanism in Kenya(Strathmore University, 2021) Okoth, Frankline ManyalaSocial protection has become a fundamental focus of governments and policymakers to eradicate poverty. They are key in protecting vulnerable and marginalized population from sinking into absolute poverty and thus evolved from emergency and disaster interventions to long-term policies for social and economic inclusion, human development, and poverty eradication. To this end, the Kenyan government has made significant investments in this agenda, but poverty remains prevalent in the economy. Hence the objective of the study was to investigate the factors undermining the effectiveness of social protection programs as a poverty eradication mechanism in Kenya. The study used a mixed-method research design to conduct the study. Feedback was sought from key informant interviewees who were experts in their field. The findings indicated that there was still insufficient coverage of the social protection programs due to the skewed dispersion of the programs. This can be attributed to insufficient targeting mechanisms and designs. ASAL region is among the worst affected due to the logistical challenges of reaching them to create awareness. The findings also indicated that despite the programs role to create a safety net, the amount offered is insufficient and unreliable. Amongst the recommendations shared is scaling up of social protection programs using robust targeting mechanisms as well as sustainable investments of the social protection funds to increase its reliability and effectiveness in helping to combat poverty.
- ItemPortfolio manager’s perception of the determinants of digital credit repayment in Kenya(Strathmore University, 2021) Ndung’u, Eva WangariThe critical problem most digital credit-lending agencies face is poor loan repayment. Statistics show that loan default has been a tragedy and loan repayment problem is an unsolved issue faced by the majority of digital lending institutions. The study sought to establish the perception of the determinants of digital credit repayment in Kenya. The study specifically looked into the effect of individual/borrowers factors, loan factors and lender factors on digital credit repayment in Kenya. The research was based on prospect theory and the theory of delegated borrowers monitoring. To determine and be able to characterize the features of variables of interest, a descriptive research design was used. The study targeted all the main credit digital lenders in Kenya but the unit of observation was the credit managers, credit analysts and account relationship managers. The study adopted stratified sampling and employed the Yamane (1967) formula below to calculate the sample size of 204 respondents. The study relied on primary data gathered through questionnaires. The questionnaires were self-administered using a drop-and-pick method. Both descriptive and inferential statistical approaches were used to analyze the data. For simplicity of analysis, the data was sorted, categorized, and coded before being tabulated. The information was grouped and summarized based on common topics. The data was analyzed using descriptive statistics. The Statistical Package for Social Sciences (SPSS) was used to conduct the analysis (SPSS Version 25.0). The qualitative data from the open-ended questions was evaluated and presented in prose using content analysis. Further, inferential statistics was done using multiple regression and correlation analysis. Tables and other graphical presentations as appropriate were used to present the data collected for ease of understanding and analysis. The study established that the number of dependants; marital status; level of education; and gender affect digital credit repayment to a great extent. The study also found that repayment period and type of loan/security provided affect digital credit repayment to a great extent. The study found that number of loan installments affect digital credit repayment to a moderate extent. The study concludes that individual/borrowers factors positively and significantly affect digital credit repayment in Kenya (β=0.792, p=.000<0.05). The study further deduced that there is a negative but significant relationship between the loan factors and digital credit repayment (β=-0.229, p=.006>0.05). The study also concluded that there was a negative but significant relationship between lender factors and digital credit repayment in Kenya (β=0.457, p=.000<0.05). The study therefore concluded that individual/borrowers had the greatest effect on the digital credit repayment in Kenya, followed by lender factors while loan factors had the least effect on the Digital credit repayment in Kenya. When building loan products for the Kenyan market, digital credit lenders should take into account borrowers' demographic factors such as age, gender, marital status, occupation, education, and income, according to the study. This is because demographic elements are important and measurable population data that aid in the identification of target markets, are easier to quantify, and are appropriate for psychographic and sociocultural research. Furthermore, Kenyan digital credit lenders should take more steps to perform broad market surveys so that they can better understand the regions where they can tap into and produce lending products that are relevant to market needs. Lenders should do a better job of reporting and clarifying key loan elements so that borrowers have a clear understanding of the loan's cost, payment due dates, and the repercussions of late repayment and default.
- ItemThe Effect of demonetization and COVID-19 on mobile money transactions in Kenya(Strathmore University, 2021) Omanga, Gabin NyamweyaMobile money has been identified as having several advantages over cash. It has the potential to boost economic growth and financial inclusion while closing the related gender- and rural-gaps in the process. It has further been found that demonetization, through a money supply shock can enhance use of other non-cash forms of money. This study sought to determine the effect of demonetization on mobile money in Kenya. The focus of the study was Kenya which demonetized its largest denomination, the one-thousand-shilling note, in May 2019. This dissertation is motivated by the need to determine the efficacy of demonetization as a tool for digitization and expansion of non-cash transactions in an economy, specifically mobile money. The study employed an event study methodology using the Mean Adjusted Model. The timeframe under review was split into two between April 2017 and May 2019 (25 observations) and May 2019 and June 2021 (25 observations). The study found that there was a significant increase in mobile money transactions attributed to demonetization. Further, the study concluded that measures on mobile money taken by the Kenyan government to cushion its citizens against economic effects of SARS COVID-19 pandemic in early 2020 did not have a significant moderating effect on the association between demonetization and mobile money transactions. This study has contributed to existing literature that demonetization through a cash supply shock, leads to use of alternative non-cash forms of payments. Additionally, the study deduced that demonetization is a good policy tool for expansion of currency digitization.
- ItemInfluence of firm-level financial characteristics on credit extension by microfinance institutions: a case of Kenyan licensed microfinance banks(Strathmore University, 2021) Karanja, Winnie NjeriEmpirical evidence has shown that the growth of the microfinance sector in Kenya has been constrained by increasing competition in the microfinance industry from other emerging models such as digital lending institutions, short-term unsecured lenders as well as micro-lending activities from commercial banks. These constraints have also resulted in shrinking lending capacity and declining profitability due to attrition of high-quality borrowers to competing lenders. However, there is limited research on the factors that affect credit extension by Kenyan microfinance banks, which is vital in understanding the dynamics of the sector. This study examined how firm-level financial characteristics influence credit extension by microfinance banks. The study sought to find out the effect of firm size, liquidity, NPLs, deposits, and interest rates on credit extension by microfinance banks. A descriptive research design was applied, focusing on the 13 licensed microfinance banks as at December 2019. Panel data was collected for the period between 2011 to 2018 from financial submissions by these microfinance banks, which are published by the Central Bank of Kenya. Data analysis involved descriptive, correlation testing, and panel regression analysis. The study found that firm size and interest rates had a positive relationship with microfinance banks credit extension, while non-performing loan, liquidity and deposits were found to have a negative relationship with credit extension by licensed MFBs in Kenya. In the Panel estimation model, only Firm size and Liquidity were found to be good estimators of Credit Extension. The main recommendations from the study were that, as firm size supports the growth ambitions of a microfinance institution and the microfinance sector in general, microfinance banks should aim to maintain high asset quality of their loan book as it has an implication on the institution’s ability to absorb the impact of risk, and hence affects the institution’s ability to target credit extension growth. The study also recommends that, given the findings that deposit mobilisation is not a good predictor of credit extension, Microfinance banks should focus on mobilising capital from diversified sources, including low-cost funding from microfinance developmental funding institutions, as they are not able to rely on deposits as a cheap source of funding. On interest rates, while findings indicate that interest rates are not a good estimator of credit extension, care should be taken to avoid overly expensive loans so as to observe fair lending practices and support welfare of borrowers. To the regulator, the recommendation is that the sector should be watched closely to ensure liquidity levels remain above the minimum statutory level of 20% which was found to have a negative relationship with credit extension. Study limitations included the exclusion of external factors such as macroeconomic factors and competition, and the exclusion of primary data – both qualitative and quantitative.
- ItemThe Association between ease of doing business attributes and net foreign direct investment flows into Kenya’s manufacturing sector(Strathmore University, 2021) Olando, AdahThe manufacturing sector plays an important part in the economic development of Kenya and forms a critical pillar in the achievement of the government’s Big Four agenda. Attracting Foreign Direct Investment (FDI) into the manufacturing sector has been listed as one of the objectives of the government with the aim of revitalizing the performance of the sector in the future. One of the critical factors identified in attracting FDI into a country are the Ease of Doing Business (EDB) attributes. The purpose of the study was therefore to examine the association between EDB attributes and net FDI flows into Kenya’s manufacturing sector. In doing so, the study was guided by four specific objectives which aimed at analysing the association between specific EDB attributes and net FDI flows into Kenya’s manufacturing sector. The EDB attributes that were assessed relate to bureaucracy, access to credit, political risk and trade liberalization. The Ownership – Location – Internalization (OLI) Theory was the theoretical foundation of this study. A positivist research philosophy was adopted, and a descriptive correlational research design was applied to data from the year 2012 – 2019. The correlation analysis revealed that that there was a significant positive association between access to credit and net inflow of FDI into Kenya’s manufacturing sector. On the other hand, political risk, trade liberalization and bureaucracy all had significant negative associations with net inflow of FDI into Kenya’s manufacturing sector. The study therefore recommends that the Government of Kenya continue with its efforts in reducing bureaucratic processes and procedures as well as curbing political risk and perceptions thereof. The study further proposes that the Government of Kenya consider providing competitive funding to firms that aim to internationalize their manufacturing operations in Kenya while creating a conducive environment for international firms to operate from Kenya by offering competitive terms in comparison to other members of the East African Community (EAC) who attract manufacturing firms into their economies.
- ItemAn Examination of the effect of impact investment instruments on sustainable development financing in Kenya(Strathmore University, 2021) Mati, Benson NjiruIt is estimated that the amount of finances required for key sectors related to the United Nations 2030 Agenda for Sustainable Development at the global level is approximately US dollar 5 to 7 trillion per year. This study sought to break ground in a new academic field of enquiry by examining the effect of impact investment instruments, novel approach for financing social and sustainable enterprises that is gaining momentum in Kenya and across the world, on sustainable development financing in Kenya. This study sought empirical evidence on the effect of green bonds and social impact bonds (SIBs) usage on sustainable development financing in Kenya. The 2030 Agenda for Sustainable Development overall vision is to lead the world toward a path of inclusive economic development, social inclusion and environmental sustainability. The study sought to examine Kenya’s progress in sustainable development financing and took stock of the effect of impact investment instruments on financing social and sustainable enterprises implementing the SDGs commitments in Kenya. The study empirically analysed social, environmental and economic performance data from impact investors employees in Kenya and mapped the impact data to the SDGs. Using a descriptive cross-sectional survey design, relevant data was collected from 185 employees of the 37 impact investors, members of GIIN, using structured questionnaires and analysed using descriptive and inferential analysis. Results showed that impact investment instruments play a critical role in sustainable development financing in Kenya. Further, a statistically positive significant relationship between social impact bonds and sustainable development financing was found, while green bonds had a statistically negative significant relationship with sustainable development financing. Finally, the joint effect of the two variables was statistically significant. Theoretically, this study contributes to impact investment instruments knowledge base by providing a model that optimizes the use of impact investment instruments on sustainable development financing. The study provides empirical evidence supporting the structure of impact investment instruments and sustainable development financing link from a developing country context using perspectives of the impact investors’ employees. Policy formulation may focus on mandating impact investors to develop social and environment performance management practices for measuring and reporting their social and environment performance.
- ItemChallenges facing water service providers in Kenya in accessing the output based aid-commercial financing(Strathmore University, 2021) Cherotich, HeatherWater is an essential component in the development of any economy. Although the Kenyan government has made some strides towards water supply and sanitation coverage within the country, recent statistics by the water services regulatory board reveal that water supply and sanitation service provision still remains scanty clue to insufficient finances. Water Service Providers (WSPs) are confronted with numerous hurdles which stifle their ability to sustainably fulfill their legal obligation of providing water and sanitation services without relying on aid support from government or non-governmental organizations. This paper examined the challenges that water service providers in Kenya face in accessing commercial financing from commercial banks. The specific objectives were to identify the current sources of financing within the water and sanitation sector, to determine the challenges facing water service providers in Kenya in accessing the output based aid-commercial financing, and to rank the challenges from the most prevalent to the least prevalent. A positivism research philosophy and exploratory research design was used for this study. Kenya was the unit of analysis. To achieve the objectives, the study used primary data. Questionnaires were administered to the commercial/finance managers of the water service providers. The collected data was analyzed using SPSS. The target population of the study comprised of the water service providers in Kenya. The study used a non-probability sampling technique of purposive sampling where the sample was known and a simple random sampling. The sample constituted 8 water service providers which applied for and accessed the facility, 6 water service providers which applied for but did not access the facility and 56 WSPs which did not apply for the loan at all. From the findings, this study aimed at coming up with recommendations and solutions that water service providers need to implement for them to access the output based aid-commercial financing. Empirical data an8lysis used collection. The study established that consumer tariffs were the main sources of infrastructure financii1g for water service providers. The study also established economic efficiency challenges was the most prevalent and persistent followed by corporate governance challenges then lastly infom1ation asymmetry. Under cooperate governance, the PPMC analysis showed a high positive relationship between proper financial management and ease of access to OBA financing (r = 0.5; p = 0.000: n= 62). flll1her, the analysis revealed the existence of a moderate positive relationship between level of utility oversight and supervision and case of access to OBA financing (r = 0.3; p = 0.16; n=62). The analysis also shows low positive relationship between availability of information and control system
- ItemAn Assessment of the relationship between capital markets development and economic growth in Kenya(Strathmore University, 2021) Kilel, Viola ChelangatThis study investigated the relationship between capital markets development and economic growth in Kenya for the period 2000-2019 The study used Gross Domestic Product (GOP) as the dependent variable and market capitalization, equity market turnover, bone! Market turnover as the independent variables, 91-day T -Bill as the control variable and exchange rates as the moderating variable. The data was analysed using STATA version 14.0. Statistical analyses including Descriptive statistics, Optimal Lag length selection, ARDL Bound tests for cointegration, Stationarity Test, ARDL ECM model , ECM, goodness of fit test, diagnostic tests and stability tests were undertaken. From the results, it is evident that capital market development has a significant positive effect on economic growth in Kenya. The study findings revealed that market capitalization had a significantly negative effect on GDP in the short run and a significantly positive effect on GOP in the long run. Flll1her, equity market turnover had a significantly positive effect on economic growth short run and a significantly negative effect on economic growth in the long run. Bond market turnover results indicated the presence of a significantly positive effect at first difference in the short run and a significantly negative effect on economic growth in the long run. The study's bound test statistic validates the presence of long run effect of the model on GDP as f-value as well as above the critical values. The study recommends that CMA and Capital markets industry stakeholders should implement initiatives that will support market activity and securities subscriptions in a bid to increase Market Capitalization, Equity Turnover and Bond Turnover percentage contribution to GDP. flll1her, it recommends the National Treasury to review sustainability of economic development and the suitability of the operating and economic environment for the growth and development of the domestic capital markets. In conclusion, domestic capital market plays a fundamental role as an engine for economic growth as revealed by the study findings.
- ItemThe Determining factors of financial sustainability of grant-financed seed companies in Kenya(Strathmore University, 2021) Kavilu, John WambuaAgribusiness offers an avenue for farmers to access both market information and access to reasonable funding for improved on-farm practices for enhanced productivity. This study aimed at exploring the underlying factors that determine financial sustainability of grant funded seed companies in the Kenyan agribusiness scene. The study also aimed at finding out the factors influencing successful financing of seed companies in Kenya and to further investigate financial sustainability challenges that face seed companies in Kenya. The research gap is informed by the fact that despite widespread access to extensive funding packages from various grant instruments, most seed companies in Kenya have faced severe financial sustainability challenges. A cross-sectional descriptive research design targeting 138 employees of seed companies was integrated with the principal-agent and the resource-based view theories are used to deduce the various factors that affect the financial performance of seed companies in Kenya. An overarching factor raised found to limit the financial sustainability of grant-funded seed companies is the absence of sufficient knowledge on the strategic financing options available and actions needed to steer consistent profitability. The study established that the primary factors that determine successful funding, financial sustainability challenges, and available financial options available for grant-funded seed companies are closely linked with their financial sustainability. This study suggests that seed companies that do not have access to adequate should readjust their capacity and operations to accommodate available resources in order minimize overdependence on donor funding. The study recommends further research be carried on downstream seed companies such as aggregators and to segment grant financed companies according to the type of donors.