Analysis of the drivers of financial performance of development financial institutions in Kenya

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dc.contributor.authorKatsenga, R. M.
dc.date.accessioned2024-10-24T17:20:46Z
dc.date.available2024-10-24T17:20:46Z
dc.date.issued2024
dc.descriptionFull - text thesis
dc.description.abstractThe 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.
dc.identifier.citationKatsenga, R. M. (2024). Analysis of the drivers of financial performance of development financial institutions in Kenya [Strathmore University]. http://hdl.handle.net/11071/15587
dc.identifier.urihttp://hdl.handle.net/11071/15587
dc.language.isoen
dc.publisherStrathmore University
dc.titleAnalysis of the drivers of financial performance of development financial institutions in Kenya
dc.typeThesis
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MDF Theses and Dissertations (2024)