MDF Theses and Dissertations (2023)

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    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.
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    Influence of socio-economic factors on the adoption of weather-based agricultural insurance products in Narok County, Kenya
    (Strathmore University, 2023) Nanshemeza, H.
    Kenya has been facing a high number of natural disasters, having recorded various droughts in the last two decades. These are consequences of climate change. To mitigate the adverse impacts of this climate uncertainty, the government avers that farmers need to adopt various coping strategies. Among these is agricultural insurance, which is supposed to help low-income farmers reduce vulnerability. However, despite policies and initiatives being implemented to encourage farmers to adopt these insurance products, uptake remains low. The focus of this research was to investigate the influence of socio-economic factors on the uptake of weather-based agricultural insurance products in Narok County. The study specifically examined the effect of demographic factors, household income, household perception, household expectation, and crop insurance regulation on the uptake of weather-based agricultural insurance products in Narok County. The research was grounded on prospect theory and customer perceived value theory. A sample of 300 wheat farmers in Narok County was considered for the research. A structured research questionnaire was adopted for the examination with probit regression estimated to determine the marginal effects of socio-economic factors on the uptake of weather-based agricultural insurance products in Narok County. Analysis revealed that a majority, 53% (n = 159), were male farmers, with 47% accounting for female wheat farmers, which demonstrates inclusive participation in agricultural activities. The results revealed that, on average, the farmers had an income of KES 16,843 from farming activities. The research further focused on the rate of adoption of weather-based insurance products and the findings showed that 48% (n = 144) of the farmers have used weather index crop insurance, with 52% not using the product. The summary of the probit regression established that there was a positive but insignificant influence of 2.14% on the adoption of weather-based insurance products in Narok County that was predicted by the socio-economic factors. Overall, the research findings were that socio-economic factors do not have significant effects on the adoption of weather-based insurance products in Narok County. The first recommendation that can be drawn from the research findings is that the government needs to be more involved in the efforts to address the challenges facing agricultural insurance. The study also recognizes the role played by insurers in promoting crop insurance and the study recommends that insurers do more research on farmers’ needs and their perception about insurance. Finally, this study calls on the government to step up education efforts and partnerships with local and international partners to provide up-to-date insurance education programmes for farmers and training for insurance experts.
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    The Effects of financial inclusion on entrepreneurial venture formation in marginalized areas in kenya - a case of Chepyuk Ward, Mt. Elgon Sub-County
    (Strathmore University, 2023) Kipnusu, T. K.
    Financial inclusion has widely been touted as a vital tool in alleviating poverty and reducing income imbalance among the rural-poor in developing economies. The concept of financial inclusion (FI) has become popular and has been described as a means of easy and voluntary access to basic financial services. This study sought to determine the effect of financial inclusion on entrepreneurial venture formation in marginalized areas with focus on Chepyuk Ward, Mt. Elgon Sub-County in Kenya. The highest financial exclusion of 29% is in marginalized areas compared to 2% in non-marginalized areas. Further, Commission for Revenue Allocation identifies Mt Elgon in Bungoma County, Western Kenya among 1,424 areas in 47 counties as most deprived and therefore marginalized. The overall objective of the study was to determine the effect of financial inclusion on entrepreneurial venture formation in marginalized areas with focus on Chepyuk Ward, Mt. Elgon Sub-County in Kenya. The study had three specific objectives: The first specific objective was to establish the extent of access to financial services and its effects on entrepreneurial venture formation in Chepyuk Ward, Mt. Elgon Sub-County in Kenya. The second specific objective was to establish the extent of usage of financial services and its effects on entrepreneurial venture formation in Chepyuk Ward, Mt. Elgon Sub-County in Kenya. The third specific objective was to investigate the level of awareness of existence of financial services and its effects on entrepreneurial venture formation among the marginalized areas of Chepyuk Ward, Mt. Elgon Sub-County in Kenya. This study used two theories; Capabilities theory and theory of asymmetric information. Descriptive research design was applied and a sample size of 379 households from a target population of 7,274 households from Chepyuk ward was used in this study. Two research assistants were trained and supported data collection process. The study adopted a spearman`s rank correlation coefficients and binary logit regression model. Results of the study indicated that there was a positive and not significant effect of access to financial services on entrepreneurial venture formation. There was an inverse and not significant effect of usage of financial services on entrepreneurial venture formation. Moreover, there was an inverse and significant effect of level of awareness of financial services and entrepreneurial venture formation in Chepyuk Ward, Mt. Elgon Sub-County. The study concludes that extent of financial access, access to financial training and financial literacy are catalysts of entrepreneurial venture formation. There is need for cost benefit analysis by financial services providers so as to examine the costs of credit facilities, use of mobile financial services and micro insurance so as to match the need with costs incurred by service seekers, especially the low income earners in the marginalized areas. There is need for deployment of strategies that may alter the inverse effect of access of financial services, access of financial training and financial literacy. There is need for development of policy programs that would mitigate against the levels of information asymmetry and ultimately increase uptake of financial products and reverse the trend of entrepreneurial venture formation.
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    The Effects of financial literacy on the performance of Agro processing companies in Nairobi County, Kenya
    (Strathmore University, 2023) Mwirichia, D. N.
    Globally, financial literacy has gained attention in the business industry due to its significant impact on the sustainability of a business. This study sought to assess the effects of financial literacy on the performance of Agro processing companies in Nairobi County. The specific objectives of the study were: to determine the effects of financial budgeting literacy on the performance of Agro processing companies in Nairobi County; to establish the effects of financial risk management literacy on the performance of the Agro processing firms and to determine the effects of debt management literacy on the performance of Agro processing firms in Nairobi County. The study was anchored on financial literacy theory and used a descriptive correlational research design. The study target population comprised of all the 112 Agro processing companies in Nairobi County with the target respondents being the financial officers, chief accountants and other senior individuals in the firms’ finance and accounting departments. The study used census survey approach to obtain information from the 112 Agro processing companies in Nairobi County. Data was collected using questionnaires which were online administered using Google Docs. Gathered data was cleaned and then analyzed qualitatively and quantitatively. Qualitative data was analyzed thematically while quantitative data was analyzed by the aid of statistical software SPSS version 24. The study found that is a significant positive relationship between financial budgeting literacy, financial risk management literacy and debt management literacy as evidenced by the positive correlation. Further the model of the study concluded that financial budgeting literacy has a statistically significant impact on performance of Agro processing companies. The study recommends that Agro processing companies should move with speed in enhancing their staff members’ knowledge on emerging and disruptive financial concepts in relation to financial budgeting in order to maintain steady financial growth
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    Factors influencing the participation of youth in agribusiness in Kiambu and Machakos Towns in Kenya
    (Strathmore University, 2023) Mullu, L. M.
    Despite the high levels of unemployment, the youth rarely exploit opportunities in the agribusiness sector due to preconceived misconceptions and negative perceptions of agriculture as a career choice. However, agriculture is a significant contributor to the country’s economic development and the participation of the youth in the sector would surely play a significant role in easing the income challenges faced by the youth. To this end, the research sought to examine the factors that influence the participation of the youth in agribusiness activities. Specifically, the examination focused on the effect of market factors, technological factors, government factors and socioeconomic factors on the participation of the youth in agribusiness. The theoretical scope of the research was limited to the Push-Pull Theory and the Theory of Planned Behavior, which are relevant to the study. The research adopted a descriptive research design. The population of the research was 1,289,820 youth members drawn from both Kiambu and Machakos Counties. The study adopted convenience random sampling in the selection of the research participants, who were determined using the Krejcie and Morgan table. A sample of 384 youth members was selected, and the participants were apportioned across the two counties. Data was collected through structured questionnaires with focus interviews conducted with key informants in the agribusiness field. Data analysis was done using the SPSS software. The research implemented descriptive and inferential statistics in the analysis. The research further applied content analysis to review the qualitative research data within the study objectives. The analyzed research data was presented through pie charts, tables and graphs. Out of the response being sought in the study, the research was able to garner a 97% response rate which was deemed adequate for quantitative analysis. Overall regression analysis revealed that market factors have no statistically significant effect on youth participation in agribusiness, technology factors have a positive and significant effect on youth participation in agribusiness, socioeconomic factors a positive and significant effect on youth participation in agribusiness, and demographic factors have a significant relationship with youth participation in agribusiness in Kiambu and Machakos town. Regression results were that there was no statistically significant effect of market factors have no significant effect on youth participation in agribusiness. Findings led to the conclusion that technology factors and socioeconomic factors have a statistically significant effect on youth participation in agribusiness. Further, the study found that demographic factors such as gender, employment status, age and level of income have insignificant impacts on youth’s participation in agribusiness. On the other hand, the size of the household and the academic achievement of the youth were determined to have significant influences on the likelihood of participating in agribusiness. The study findings provide evidence that the youth are highly enthusiastic and motivated to participate in agribusinesses and that under the right conditions, more youth will get involved in the country’s biggest income earner. The study further calls on the inclusion of agricultural programs in schools from an early age to ensure the citizenship recognizes agriculture as a viable business activity from a young age. Another recommendation is for increased marketing and financing of agribusiness as a vital component of the economy to increase its attractiveness to foreign investors who can bring in newer farming methods, technologies and expertise. Key words: Market factors, technological factors, socioeconomic factors, Youth in agribusiness