MDF Theses and Dissertations (2021)
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- 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.
- 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 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.
- 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.