MDF Theses and Dissertations

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An Assessment of the relationship between capital markets development and economic growth in Kenya
(Strathmore University, 2021) Kilel, Viola Chelangat
This 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.
An Investigation of the challenges in sustainable finance for water and sanitation in Kenya
(Strathmore University, 2023) Bundi, P. K.
Water and sanitation are critical to achieving the Sustainable Development Goals in addition to having an impact on health, particularly that of children under the age of five. Economic losses prevalent because of increased household expenditures on health-related expenditures and decreased productivity because of water and sanitation-related diseases, translate into additional budgetary allocation requirements for curative health that could otherwise be used for developmental initiatives and projects in a country's economy. The study set out to investigate the challenges that impede sustainable financing of water and sanitation, as well as to investigate solutions that will aid in bridging the gap in the sustainable financing of water and sanitation in Kenya. The sustainability theory and stakeholder theory formed the foundation of this study. A qualitative research design was used for the study, with the respondents comprising of officials from the Ministry of Health (MoH) (national and county), the Ministry of Water, Sanitation, and Irrigation (MoWSI), developmental organisations, and financial institutions. The study gathered qualitative data from 30 experienced key informants and an interview guide was used to guide the interviews. Content analysis was used to analyse qualitative data, and the results were presented in prose form. The challenges impeding sustainable finance in water and sanitation including inadequate financing, dependency syndrome, rapid urbanisation, affordability, and knowledge gaps were examined, and solutions to bridge the gap in water and sanitation financing were discussed. Financial innovations such as blended finance, institutional arrangements, improvement of the regulatory framework, promotion of accountability in water and sanitation financing were among the solutions. Alignment of the solutions brought out the fact that water and sanitation sector harmonisation was crucial for its sustainable financing to aid in enhanced intersectoral monitoring and knowledge harmonisation, which would not only improve information exchange for improved sector monitoring and informed investment choices for the sector's sustainable finance for water and sanitation but also aid in the development of the water and sanitation sector financing governance framework. With these a market that attracts sustainable finance for the sector because of increased transparency, readily available information, and a market whose risks have been evaluated, mitigation measures developed, and information made available to all stakeholders, would result in the development of suitable financial solutions, and enhanced access to sustainable finance. Key Words: Sustainable Finance, Sustainable Development Goals, Stakeholder
Analysis of critical success factors for Health Public-Private Partnerships: a case of the Managed Equipment Services (MES) in Narok County
(Strathmore University, 2020) Miseda, John Opudo
Health Public Private Partnerships (PPPs) have increasingly gained popularity as governments worldwide are seeking interventions to manage the ever-increasing cost of healthcare and foster development goals while harnessing private sector efficiencies. While most health PPPs have recorded a high success rate in developed nations, there is little evidence of success in relation to Low- and Middle-Income countries which are marred by complex challenges inherent in healthcare industry thereby imposing challenges to achieve their intended goals. This research focused on the Critical success factors (CSFs) for health PPP in this case Managed Equipment Services (MES), a Partnership between the government of Kenya and private companies to provide specialized medical equipment to County governments’ hospitals. Past studies reviewed in the literature focused on different health PPP models across different jurisdictions and indicated that Political goodwill, Contract Agreement, Stakeholder Involvement, Expertise, Human Resource, and Innovation were CSFs. However, these factors are unique and are not easily replicated into other jurisdiction, health PPP models, or sectors and it is against this backdrop that the current research seeks to analyze which factors are critical for MES in Narok County. The researcher conducted Key Informants Interviews of PPP experts and administered questionnaire to Sub-County and County Health Management Teams in Narok County. The Spearman rank correlation was used to measure the correlation of CSFs under review while qualitative content analysis was inductively done to come up with overarching themes on the CSFs. Among the factors tested, Political Goodwill, Contract Agreement, Stakeholder Involvement, and Expertise were found to be critical for the success of MES and exhibited a positive correlation with each other. The key recommendations of the study were employing these CSFs and strengthening PPP framework to guide on procedures and rules that govern the implementation of health PPP at the County level.
Analysis of environmental, social and governance integration and sustainable lending practices by commercial banks in Kenya
(Strathmore University, 2024) Lengewa, S. J.
The global call for sustainable development has prompted businesses and financial institutions to adopt responsible practices that balance economic growth with environmental and social concerns. In Kenya, a rapidly developing nation facing significant environmental and social challenges, the role of commercial banks in promoting sustainability has gained increasing importance. Despite its proven benefits in other parts of the globe, commercial banks in Kenya are yet to fully integrate ESG in their lending practice, begging the question why? This study sought to determine the effect of environmental integration, social integration, and governance integration on sustainable lending practices of commercial banks in Kenya. The research methodology anchored on the positivist research philosophy and employed a descriptive research design where the study used questionnaires to collect data from employees from sustainability and credit departments of the 39 commercial banks that operate in Kenya. The stakeholder theory, legitimacy theory and stewardship theory guided the study and informed the research objectives, variables, and conceptual framework. Using ordinal regression analysis, the study regressed the predictors on the outcome variable. It was established that environmental integration, social integration and governance integration had a positive significant effect on the sustainable lending practices of commercial banks in Kenya. The study concludes that there exists a significant positive relationship between environmental, social and governance integration (ESG) and sustainability lending practices of commercial banks in Kenya. It is recommended that policy makers should proactively formulate robust policies mandating commercial banks to fully integrate ESG principles into their lending practices to promote sustainability. And that bank management should enhance their ESG disclosure procedures by incorporating critical and relevant ESG components that directly impact stakeholders‘ interests and overall bank operations. Keywords: Environmental integration, Social integration, Governance integration, commercial Banks and sustainable lending practices
Analysis of factors influencing financial inclusion of coffee farmers in the littoral region of Cameroon
(Strathmore University, 2024) Bate, N. G. S.
The study delves into the determinants of financial inclusion among coffee farmers in the Littoral region of Cameroon, aiming to uncover factors influencing their engagement with the financial system. By analyzing individual farmer characteristics, farm farm business characteristics, and Microfinance Institutions (MFIs), the research seeks to elucidate their roles in fostering financial inclusion, including aspects like savings accounts and loan accessibility. Data collected from 300 respondents across rural areas will address knowledge gaps and provide insights into the relationship between financial inclusion and coffee farming. Utilizing Principal Component Analysis (PCA), an FI Index will be constructed to measure financial inclusion comprehensively. Correlation results reveal a significant and negative correlation between MFIs and Farm business characteristics (-0.391, p < 0.01), and no significant correlation between MFIs and Farmer Characteristics (0.083, p = 0.493), while Farm business characteristics demonstrate a moderate and significant positive correlation with Farmer Characteristics (0.319, p < 0.01). The findings suggest that Farm business characteristics and Farmer Characteristics positively influence financial inclusion, emphasizing the importance of fostering entrepreneurial skills among coffee farmers. The study proposes recommendations for policy and practice, including strengthening financial literacy programs, supporting entrepreneurship, improving access to financial services, enhancing collaboration, promoting policy reforms, and monitoring interventions. Further research avenues include longitudinal studies, comparative analyses, qualitative research, impact evaluations, policy analysis, and advocacy to deepen understanding and address limitations, ultimately contributing to inclusive development in the region.
Analysis of the drivers of financial performance of development financial institutions in Kenya
(Strathmore University, 2024) Katsenga, R. M.
The Development Financial Institutions are a critical nerve Centre to the economic growth of any country. The financial performance of Development Finance Institutions in Kenya over the last twenty years has not been performing according to the stakeholder expectations. DFI’s in Kenya had failed to provide a sustainable long-term finance to the industrial sector and the agricultural sector. This was evidenced by credit being allocated on the basis of political and social concerns, lack of effective and efficient incentives to collect. Studies on these development institutions have remained scanty with those that have attempted having varying outcomes thus making it difficult to provide a guide to policy formulation in Kenya. The purpose of the study was to analyse the drivers of financial performance of Development Financial Institutions (DFIs) in Kenya. The driver of financial performance considered in the investigation included asset quality, management efficiency and liquidity management in Kenya. The survey made use of census approach to arrive at five Development Finance Institutions employed in the investigation. Relying on information of the financial audited reports of these institutions, the data was retrieve spanning over the period 2012/2013 to 2019/2020. Laying the theoretical foundation for the study was the theoretical postulations of the CAMEL model and the Liquidity Preference Theory. The outcomes of the investigations were reached owing to the credit accorded to the descriptive and regression techniques with the outcomes presented in tables. The outcome uncovered that asset quality is a significant and negative driver of Development Finance Institutions’ financial performance; management efficiency was unfolded as a positively and significant driver of Kenyan Development Finance Institutions financial performance; while liquidity management was reported to be a significantly positive driver of Development Finance Institutions financial performance in Kenya. Relating to the outcomes, the investigation recommended that the management of Development Financial Institutions should strengthen the means through which non-performing loans could reduce to boost the financial performance of the institutions. This can be done through critical assessment of customers’ credit worthiness to reduce the amount of loans that are non-performing in Kenya.
Assessing the effect of cross border facilitation measures on trade costs in the East Africa region
(Strathmore University, 2021) Atieno, Donna
Successive 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.
The Association between ease of doing business attributes and net foreign direct investment flows into Kenya’s manufacturing sector
(Strathmore University, 2021) Olando, Adah
The 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.
Attitude as one of the factors affecting the performance of Technical and Vocational Education and Training (TVET) students: a case of NITA College – Nairobi
(Strathmore University, 2022) Odhiambo, Emmanuel Oduor
Kenya has set itself a target of being a middle-income country in the near future as envisaged in the country’s Vision 2030. To achieve this, the Kenya Government has in the recent past made many efforts in setting up and equipping new technical institutions across the country to revamp the technical training of young people. But in spite of the many interventions by the Government to improve the technical adequacy of these institutions, many employers still complain about the quality of workmanship of the new recruits from the said institutions. This study delved into this matter and attempted to understand if non-technical factors contribute in any way to this situation. In particular, this study sought to understand the influence of the learners’ attitudes in the preparation for the jobs in the manufacturing sector, with a focus on NITA College, Nairobi. A quantitative survey approach was used. Data was collected using questionnaires and the responses captured in a Likert scale. The collected data was then analyzed using appropriate software tools and hypothesis tests carried out. These findings were discussed, implications drawn, and recommendations made. The research collected research data from 94% of the sampled participants from NITA College - Nairobi. The results showed there was a high disparity in the gender of the students with only 12% female students taking the Welding & Fabrication and Electrical Technology courses at NITA College. Furthermore, more female students were more prone to register for ICT courses as opposed to artisan and craft proficiency courses. The analysis of the student performance showed that most of the students attained a grade of 70% in their last Electrical Technology Test in NITA and a score of between 60%-69% in their last Welding & Fabrication tests. Regression tests implied that 55.4% variability in student performance can be accounted for by the variable’s attitudes based on intention, attitudes based on subjective norm, attitudes based on perceived behavior control. The study concluded that attitudes based on intention, attitudes based on subjective norm and attitudes based on perceived behavior control positively affect student performance. The study recommends that the institutions should form collaborative partnerships that will encourage the participation of female students in NITA programmes. Further, the institutions should encourage industry players to offer students internship and full-time job opportunities which can spur their academic performance. The study also recommends the institution should engage career advisers to tour secondary schools and provide materials to parents and teachers on the various programmes on offer as this will improve the student intention to enroll in the courses on offer.
Capital market reforms and market efficiency: case of the Nairobi Securities Exchange, Kenya
(Strathmore University, 2023) Owade, W.
The role and importance of stock markets globally and locally has led to significant efforts being put into ensuring growth of these markets. Key among these efforts include implementation of reforms within the stock markets with the aim of promoting market development. The Kenyan stock market has had several reforms implemented since the 1990s to date, however, there still remains a gap between expected market performance in comparison to the reforms that have been put in place. The objective of this study was to examine and assess market efficiency following implementation of capital market reforms at the Nairobi Securities Exchange (NSE). Specifically, the study intended to assess the stock market efficiency upon implementation of the following reforms: automated trading system reforms, Central Depository and Settlement (CDS) reforms and stock market demutualization reform at the NSE. The choice of the reforms is highly influenced by studies that have been done in the past for which results have been inconclusive or not previously researched. The underpinning theories guiding this study include the efficient capital markets theory, theory of over and under market reaction and theory of economic regulation. Empirical reviews were also done to build on existing methodologies from similar studies done previously. The study took an event study approach for each of the independent variables to determine how the markets reacted each time the particular reform was implemented. The study applied positivism given that quantitative data was analysed, and a purposive sampling technique was used to obtain data from the listed companies at the NSE. The study utilised secondary data obtained historically from the NSE. Data was analysed using Stata 14.0 and SPSS 23, and findings revealed strong positive correlation between automation reforms and market returns throughout both the short term and long-term event windows. Findings also reveal consistent significance of abnormal returns from zero, which is an indicator of market inefficiency; additionally, results reveal significant volatility across all their reforms upon implementation. In the case of CDS and demutualization reforms implementation the market was efficient as no autocorrelation was observed. However, in the case of automation reforms, there was negative autocorrelation pattern which is not consistent with efficient markets and thus in the period of automation of the NSE, the market experienced inefficiency. The findings of the study are intended to benefit various stakeholders including policy makers, sector practitioners and scholars. The study recommends that future studies consider research on reforms cutting across the East African region or comparative study with findings in local markets in comparison to more developed markets. Additionally, there is room to study more recent reforms that have been implemented in the local stock markets.
Challenges facing water service providers in Kenya in accessing the output based aid-commercial financing
(Strathmore University, 2021) Cherotich, Heather
Water 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
Determinants of financial performance among Kenyan insurance companies
(Strathmore University, 2023) Wainaina, E. N.
The past two decades have seen the collapse or near-collapse of several insurance companies in the country because of the inability to honor their obligations due to diminished net worth. Covering risks lies in their ability to generate value for their shareholders and firms. Past studies had conflicting outcomes on the factors that influenced the insurance companies’s financial performance. The paper focused on assessing the factors that affected an insurance company’s financial performance. The study scrutinized the effects of underwriting risk, the influence of solvency, the impact of premium growth, and firm size on the financial returns of Kenyan insurance firms. The study also considered the moderating effect of market share on the financial performance of insurance companies. The research used data collected from 55 listed Kenyan insurance companies. Secondary data sourced from the financial statements of insurance companies from 2012 to 2020. The data analysis offered some critical insight into the issues that control the financial performance. The regression analysis showed that underwriting risk, firm size, premium growth together with solvency positively and substantially affected performance. However, once market share was introduced as the moderation variable, premium growth, underwriting risk, firm size, and solvency which are independent variables failed in having an influential relationship with the financial performance in the firm. The results from the present study indicate that insurance companies should focus on improving their premium growth, underwriting risk, firm size, and solvency, as this significantly impacts the company's performance. It is recommended that companies seeking a higher financial performance in the market should work to improve their premium growth, underwriting risk, firm size, and solvency. Although the results were insightful, a few limitations exist. The study was limited to a single sector. Similarly, the study’s completion was during the COVID-19 pandemic which affected many businesses. Therefore, this imposed some restrictions on the methodological choices made. Nevertheless, the study provides the basis for further research on the same subject.
Determinants of illicit financial flows in Kenya
(Strathmore University, 2022) Kasimu, Faith Nzilani
Illicit financial flows remain a key obstacle to Africa’s attainment of the 2030 Agenda and Agenda 2063. Given the multidimensional and transnational nature of IFFs, IFFs have attracted attention globally and are now at the forefront of the international development agenda. Agenda 2030 of sustainable development identifies reduction of IFFs as a top priority in building peaceful societies all around the world. As reflected in Target 16.4 of the SDGs, combating illicit financial flows is a critical element in the global effort in promoting peace, justice and strong institutions. The target aims to significantly reduce IFFs and arm flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime by 2030. The ability to attain the SDGs remains fragile when undermined by IFFs. In light of this, the study sought to examine the determinants of illicit financial flows in Kenya. The independent variables were corruption, political risks, external debt and exchange rate. Inflation and interest rate were used as control variables. Illicit financial flows was the dependent variable which was the core focus of the study. Secondary data was collected for 19 years (January 2003 to December 2020) on a quarterly basis. A descriptive correlational design was used in the study. A time series model was used in analyzing the variables. VECM findings established that corruption lagged for quarter one, two and four had a positive and significant effect on illicit financial flows in Kenya. Political risks had no effect on illicit financial flows in Kenya. External debt lagged in the second, third and fourth quarter had negative and significant effect on illicit financial flows. Lagged exchange rate for quarter one, two and four had a positive and significant effect on illicit financial flows. The study recommends that government should enforce management practices that would deter corrupt practices and prudent financial management guidelines that would enhance management of external debt to curtail odds of illicit financial flows.
Determinants of inflation in Kenya and the moderating effects of governance regimes
(Strathmore University, 2022) Maonga, Solomon Atura
A high level of inflation is undesirable because it causes a depreciation of the local currency. It also makes long-term financial planning difficult for market participants resulting in an inefficiency in a market economy, and subsequently, a lower rate of economic growth. An ideal economy would have price stability (low and steady inflation) and the wider economic goal of strong and sustainable growth and employment would be achieved. This study examined monetary and non-monetary determinants of inflation in Kenya, a developing country with a monetary policy objective of inflation-targeting. Using an Error Correction Model (ECM) based on the Autoregressive Distributed Lag (ARDL) model to explain the short run and long run impacts of each variable on inflation, this study covered secondary quarterly data spanning 25 years (1996 – 2020). The unique contribution of the study was the investigation of the moderating effects of governance regimes on the determinants of inflation. Governance regimes were examined with respect to the President of the country and the Central Bank Governor. The study concluded that in the Kenyan context, inflation is primarily influenced by prevailing interest rates and the most recent rates of inflation in the short run. The non-monetary factors and other monetary factors examined do not have a long run nor short run impact on the level of inflation, but given the moderating effects of governance regimes, their influence may be felt sporadically. Global oil prices and public debt levels are emerging as major factors influencing the rate of inflation. The study emphasises the importance of good governance to ensure consistency of policy across regimes in order to maintain price stability.
Determinants of open banking adoption intention among Kenyan commercial banks
(Strathmore University, 2022) Rutto, Kevin
In Kenya, digital finance has developed at a rapid pace. Notwithstanding, the banking industry still faces a myriad of problems such as information overload on consumers, growing competition from fin-tech & non-traditional players, inefficient manual reconciliation processes, lack of product offering personalization, regulatory compliance inefficiencies, counterparty risks, lack of proper security protocols, lack of financial services that offer single customer view, clearing and settlement time constraints, and poor customer retention. Using Open Banking and Open APIs, banks can innovate by transforming their core systems and integrating their internal systems with external partners to overcome some of these challenges. As a result, the goal of this research was to find out the determinants that will influence the adoption intention of open banking within licensed commercial banks in Kenya. The specific objectives of the study included establishing how perceived risk, perceived value, perceived relative advantage, cost of technology, and how government support affects open banking adoption by Kenyan commercial banks. The main motivators for the study were; the fast-changing competitive environment, globalization, economic paradigm shifts, European Union PSD2 regulation, increased uptake of digitized financial services due to the COVID-19 pandemic, and the demands of financial liberalization within the industry by financial consumers, third-party providers, digital banks and fintech firms. The research focused on all licensed commercial banks within the Kenyan jurisdiction and this informed the unit of study. Thus, respondents comprised of employees from these banks. At least 5 respondents were selected, from the IT department, legal department, finance department, audit department, and operations department. Since the study selected 43 commercial banks this informed a total number of 215 respondents. The study adopted a descriptive cross-sectional survey. Primary data was collected through the use of an online questionnaire which primarily consisted of closed-ended questions. To pretest and validate the study’s questionnaire, a pilot study was performed. Using empirical data from the completed responses and partial least squares-structural equation modeling (PLS-SEM), the study developed a quantitative approach using Smart-PLS version 3.3.3. The main aim of the study was to establish the significance of cost of technology (COT), perceived relative advantage (PRA), perceived value (PCV), and perceived risk (PRSK) towards adoption intention by the commercial banks (UNT) and as well analyze the moderating effect of government support (GS) towards adoption intention of open banking. Results indicated that from the five determinants; cost of technology, perceived relative advantage and perceived value had a positive and statistically significant influence on the adoption intention of open banking among Kenyan commercial banks. On the other hand, perceived risk was revealed to have a negative effect, however with a statistically significant influence on the adoption intention, while government support significantly moderated the relationship between these exogenous variables and the endogenous variable. The study recommends that commercial banks should ensure that there is integration between banks and fintech firms through partnerships and collaborations on this open banking platform which will enable banks to scale up a broad range of user efficient and cost-effective innovations. Moreover, commercial banks should take advantage of this new technology to strengthen their consumer relationships and consumer retention since it has the capability of helping the commercial banks’ consumers manage their finances better rather than simply facilitating transactions. According to the findings, government regulators should ensure that there is a well-defined regulatory approach that is suitable to the specifics of open banking concerning the financial market. Through a well-defined regulatory approach new policies, regulations and initiatives can be made which will promote the adoption of fintech innovations such as open banking that can spur the growth of the financial sector in the country.
The Determinants of sustainability content integration in graduate business programs in Kenya
(Strathmore University, 2021) Waireri, Cecilia
Business 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.
The Determinants of U.S. coffee import volumes from Uganda under the African growth and opportunity act, 2000 (AGOA): a disaggregated product level approach
(Strathmore University, 2020) Olila, Gabriel
Research on AGOA’s impact is largely scanty and findings are mixed. Most prior studies on AGOA have been carried out at a high degree of aggregation, estimating its effects on overall bilateral export flows, relying on variation by country and year that masks important differences across products. Born of a recommendation by the AGOA Response Office of Uganda, this study took a disaggregated product level approach to investigate the determinants of U.S. coffee import volumes from Uganda under the African Growth And Opportunity Act, 2000 (AGOA). Using an augmented gravity model, a random effects regression was performed on a disaggregated data panel of U.S. Coffee import volumes from Uganda that spanned the years 1994–2018 to establish; the main factors influencing the volume of U.S. coffee imports from Uganda and the effect of AGOA on U.S. coffee imports from Uganda. Artificial Neural Network (ANN) analysis was used to predict the future U.S. coffee imports from Uganda for the foreseeable future of AGOA, that is, till 2025. The main determinants of U.S. coffee imports from Uganda were found to be; air traffic, AGOA membership, U.S. openness to trade plus climatic factors like global CO2 emissions and the mean surface temperature in Uganda. AGOA had a negative effect on total U.S. coffee imports from Uganda, however, the variety of coffee products imported by the U.S. from Uganda seem to have increased post-AGOA. U.S. coffee imports from Uganda were predicted be somewhat erratic between 2019-2025 but trend upwards. This study recommends that; firms should enter into more sophisticated and specialty coffee products with AGOA-status and take special care of climatic factors; policy makers should accelerate market positioning, branding, productivity and value-chain enhancement policies for coffee; researchers should investigate the effect of climatic factors further towards developing climate resilient varieties of coffee plus explore the effects of AGOA on other commodities so as to better exploit the provisions of AGOA
Digitalization factors influence on enterprise growth among handicraft enterprises in Nairobi City County, Kenya
(Strathmore University, 2024) Kariuki, P. W.
Digitalization has become an important component for the survival and growth of organisations and this become even more visible following the COVID-19 pandemic. The anecdotal evidence indicates a growing trend towards digitalization of the handicraft industry but this has been documented in developed nations and Asian context and less remains reported in the context of African and Kenyan handicraft sectors. Therefore, this study investigated digitalization factors that influence growth among handicraft enterprises in Nairobi City County. It examines the extent of digitalization readiness, digitalization acceptance, and digitalization diffusion on the growth of enterprises. The research was anchored on technology readiness, technology acceptance model, and diffusion of innovation theory. The study subscribes to positivist research philosophy and implements an exploratory research design. The target population was 725 registered handicraft manufacturing MSMEs in the Nairobi region from which a sample of 257 owner/managers were recruited into the sample size. A structured questionnaire was designed using close- ended items (background information) and Likert scale (variable information). Descriptive, correlation, and linear regression analysis was done and captured in tables supported by implications and interpretations. The results indicated digitalization (digital readiness, digital acceptance, and digital diffusion) explained 51.1% of variation on growth of handicraft enterprises. Further, digital diffusion, digital readiness, and digital acceptance respectively had a positive and significant effect on growth of handicraft enterprises. The study concludes that digital diffusion is the most important component of achieving digitalization in the handicraft sector. Therefore, the study recommends for knowledge transfer activities supported by higher education institutions as important for MSMEs to achieve digital readiness. Keywords: digitalization, readiness, acceptance, diffusion, enterprise growth
Drivers of adoption of multiple sustainable aquaculture technologies among smallholder fish farmers in the Lake Victoria basin region, Kenya
(Strathmore University, 2024) Achom, B. E.
The study was undertaken in the Lake Victoria basin region (Busia, Homabay, Kisumu, and Siaya counties), Kenya, to determine the drivers of adoption of multiple sustainable aquaculture technologies. The global aquaculture sector grew in the recent past to become one of the most vital sectors to aid food security in the world but with constraints in factor inputs, new and better technologies must be developed to cope with the emerging demand for fish. Therefore, the study investigated the influence of socioeconomic factors, fish production, fish marketing and Aquaculture Business Development Programme (ABDP), in determining adoption decisions of fish farmers with regards to hormonal sex reversal, selective breeding and feed regime. The focus population comprised 5332 smallholder fish farmers as outlined in the ABDP report issued in 2022. Through multistage sampling (clustering and random sampling), primary data gathered from 724 fish farmers was analyzed using Multivariate Probit model. The findings revealed that the multiple sustainable aquaculture technologies were jointly adopted by fish farmers as complements. From the results still, the increase in household income, income from other activities, fish income, number of ponds, fish species being tilapia, high initial capital, amount of crops sold in kilograms, membership in fish association group, membership in fish marketing groups, high perishability and farmer being a beneficiary of ABDP were the critical drivers of adoption of multiple sustainable aquaculture technologies. Generally, the MVP model was fit for the test given the rejection of hypothesis that the three technologies were independent. The study concluded that the aquaculture technologies under study were widely practiced by farmers who were keen to see their incomes improve from all aspects as fish production thrives in tandem. From a policy and practice perspective, the study provided recommendations on the interventions of focus to build a business case of the trade to ensure farmers’ income increased. This could be achieved through continual farmer training and engagement with fisheries personnel in the counties; expansion of fish farming facility to at least 3 ponds of 300 square meters and establishment of suitable storage facilities such as temperature-controlled warehousing and logistics, all of which are imperative to the development of aquaculture sector. Key words: Sustainable aquaculture technologies, Multivariate Probit model, socioeconomic factors, fish production, fish marketing, Aquaculture Business Development Programme.
Effect of blended finance approaches on the extent of implementation of water and sanitation projects in Kenya
(Strathmore University, 2021) Stephen, Eunice Mueni
Investments 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.

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