BBSF Research Projects
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Browsing BBSF Research Projects by Subject "Banking"
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- ItemAn Analysis on the long term performance of Initial Public Offerings in the Nairobi Stock Exchange(Strathmore University, 2018) Ladha, Jay KaushikThere have been a number of studies carried out that have tried to determine the long term performance of IPOs. The three key issues these studies try and dwell on is the long run under-performance, short term underpricing and the hot issue market phenomena. The effects of the financial crisis of 2007-2008 was felt strongly in America. However there were small ripple effects that spilled over in to countries like Kenya. The studies carried out with regard to the above three phenomena in relation to IPOs and post financial crisis period have been scanty and not entirely conclusive. This project will help the IPO literature, by providing proof on two of the three above mentioned anomalies. The study documented evidence supporting the undisputed underpricing of IPOs at the NSE as compared to the closing first day trading price of the IPOs. With respect to the first phenomena, which was the long run under performance, the results are mixed in the sense that the study concludes that there is no visible regularity when computed against the market benchmarks. The study also proves through the use of wealth relatives that the IPOs are performing similarly to the market on their 5th anniversary to the market.
- ItemAnalyzing the effectiveness of microfinance as a means of poverty alleviation in selected areas of Nairobi County; a case study of Kenya Women Micro-finance Bank(Strathmore University, 2018) Sembi, Singh KaranPoverty is a major concern for most developing nations. Economic development and poverty reduction have been elusive throughout sub-Saharan Africa since independence (Younger, 2004), with Kenya being no exception. Moreover, entrepreneurship and financial inclusion among women in Kenya is lower than among men (CBK, 2016). Gender equality is the fifth Sustainable Development Goal (SDG) and its pursuit is key to the economic development of Kenya. Micro finance is built around the concept of alleviating poverty, the creation of wealth for the poor and women empowerment. Empirical evidence, however, indicates that this may not always be the case and in some instances, micro-finance initiatives leave their intended beneficiaries worse off than they were before undertaking the micro-finance initiative.
- ItemEmpirical corporate probability of defaults in Kenya: Merton and modified KMV framework(Strathmore University, 2018) Mukesh, Bharadva, DarshaA firm's capital structure gives it an endogenous cause to default. Be that as it may, prior to default there is no way to precisely single out the firms that will default from those that will not. At best, we can only make a probabilistic assessment of the likelihood of default. Not to mention, depending on a firm 's choice of capital structure, the probability of default varies from a firm with a low financial leverage to one with a high financial leverage. This paper used the Merton Model to determine the probabilities of default in various sectors of Kenya and their relationship with varying debt tenors. The model generated high default probabilities for firms with a high leverage indicating that firms with a high leverage bear high financial risks. Furthermore, the default probabilities increased as the debt maturity increased signaling an increase in future uncertainty. Nonetheless, caution must be taken when interpreting the results since the Merton model carries assumptions that are at odds with reality. These assumptions can be relaxed and alternative modeling techniques can be employed in order to match real world situations. This can be a possible future research agenda.
- ItemMulti objective optimization of commercial bank's balance sheet in Kenya : goal programming approach(Strathmore University, 2018) Rotich, Rolly KipkemoiThis study applies goal programming approach to optimizing the balance sheet of three commercial banks representing the different tiers in Kenya; Barclays Bank of Kenya (Tier 1 ), Family Bank (Tier 2), Sidian Bank (Tier 3) subject to particular constraints. The constraints used in this study include capital regulatory measures issued by the Central Bank of Kenya under the Prudential Guidelines 2013. Following the Lexicographic Model Approach of allocating priorities to different constraints, the study establishes that optimization of the balance sheet of a commercial bank is possible based on desired goals and constraints. In this optimization study, the core capital ratio was realized to be the most significant constraint when optimizing the balance sheet for a commercial bank. Once an optimum core capital ratio is attained, the other constraint, total capital ratio, can be retained at the regulatory level or slightly above it. With the same results seen across all the three banks, the same procedure can be applied for the other banks. However, caution should be taken for the smaller banks in handling their capital levels.
- ItemA Study on the effect of capital adequacy on financial performance of commercial banks in Kenya(Strathmore University, 2018) Kamaita, Sheila NkirotePrudential soundness in the financial system is ensured through better self -regulation of factors such as capital adequacy, management quality and asset quality. Capital adequacy as a bank specific factor revitalizes the functioning of the banking system by acting as a buffer for losses during an economic downturn yet at the same time its use in projects leads to substantial returns. This study seeks to assess the extent to which capital adequacy affects the Return on Equity and Return on Assets for commercial banks in Kenya. A regression analysis using STAT A software was performed for the panel data collected from 6 commercial banks in the NSE from 2007- 2016. The results from the analysis show that a. unit increase in CAR increases ROE by 0.0558141 and increases ROA by 0.2033251. Based on the findings, capital adequacy plays a vital role in the financial performance of commercial banks. This implies that banks should hold more capital to buffer them against economic downturns and for better financial performance