Thesis and Dissertations

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    Macroeconomic variables and stock market performance: a case of Nairobi securities exchange
    (2023-01-01) Saad, Zaitun
    Nairobi Stock exchange (NSE) is playing a vital role in the growth of Kenya's economy by encouraging savings and investment, as well as helping local and international companies’ access cost-effective capital. NSE operates under the jurisdiction of the Capital Markets Authority of Kenya. Presently, NSE’s market capitalization closed at Sh1.976 trillion compared to the Sh1.986 trillion value in December 2022, representing a 0.49 per cent depreciation. The purpose of this study was to examine the effects of macroeconomic variables on stock market performance a case of Nairobi securities exchange. The study was guided by the following specific objectives; to find out the effect of changes in exchange rates on stock market performance at the NSE; to examine the effect of inflation rates on stock market performance at the NSE; to establish the effect of economic growth rate on stock market performance at the NSE; to determine the effect of changes in interest rates on stock market performance at the NSE and to establish the moderating effect of savings on the relationship between the macroeconomic variables and stock market performance. To conduct the study, the researcher adopted a correlational research design and relied on secondary data collected from the annual reports of the Kenya National Bureau of Statistics, Nairobi Securities Exchange, and Central Bank of Kenya for the period 2000-2021. The collected data was analyzed using Pearson correlation analysis and time series multiple regression analysis. E-Views version 9.0 software was utilized for the analysis. The Pearson correlation matrix was used to assess the strength of the relationship between stock market performance and macroeconomic variables. Additionally, a time series data model (ARDL-ECM) was employed to determine both short-term and long-term effects of macroeconomic variables on the NSE's stock market performance. The study also examined the moderating effect of gross domestic savings through Baron and Kenney stepwise regression. Furthermore, classical linear regression and ARDL bound tests were performed to establish the existence of a long-term co-integration relationship between macroeconomic variables and stock market performance. The study results finding show that the R-squared value of 0.948827 suggests that the independent variables explain about 94.9% of the variation in market capitalization, which is a strong fit. The adjusted R-squared value of 0.861103 is lower than the R-squared value, suggesting that some of the independent variables may not be adding significant explanatory power to the model. The findings of the study indicate that interest rates, inflation rates, and economic growth rate have significant effects on stock market performance, as represented by market capitalization, in the long run. However, no statistically significant impact was found for exchange rates. On the moderating variable Gross domestic savings was found not to be a significant predictor of stock market performance on the NSE in Kenya. These findings highlight the crucial role played by macroeconomic factors in shaping the NSE's stock market performance. In conclusion, the study suggests that interest rates, inflation rates, and economic growth rate are important determinants of stock market performance at the NSE. Policymakers are advised to consider the interplay between macroeconomic variables and stock market performance, and implement appropriate policies and measures to manage exchange rates, inflation rates, economic growth, and interest rates. This will create a stable and supportive environment for the NSE and foster sustainable stock market growth. The study also suggests that future research could explore the effects of other macroeconomic variables on stock market performance.
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    Effects of mobile banking on financial performance of small and medium-sized enterprises in Kajiado County, Kenya
    (2023-06-01) Okello, Valentine Juma
    Despite the widespread availability and adoption of mobile banking technology, research on its specific impact on the financial performance of Small and Medium Enterprises (SMEs) is lacking. The effective utilization of mobile banking by SMEs to enhance financial performance and the factors influencing its effectiveness remain unclear. This study aimed to examine the relationship between mobile banking adoption and the financial performance of SMEs. Objectives included determining the effects of mobile banking service costs and accessibility on financial performance, as well as assessing the extent of mobile banking adoption among SMEs in Kajiado County. A descriptive research design targeted a population of fifty-eight (58) licensed SMEs in Kajiado County. Primary data from questionnaires and interviews were coded for analysis. Normality tests confirmed a normal distribution of the data. Statistical analyses, including regression analysis and ANOVA, were conducted. The findings indicated a strong negative correlation (-0.974, p = 0.000) between mobile banking service costs and SME financial performance, demonstrating a significant relationship. The rejection of three hypotheses (r=0.351, p<0.05), (r=0.321, p<0.05), and (r=0.246, p<0.05) suggested a positive association between mobile banking service adoption and improved financial performance, including revenue growth and profitability. Specifically, mobile banking service costs had a positive and significant association with financial performance (r=0.665, p<0.05), while mobile banking service accessibility showed a positive and significant correlation (r=0.751, p<0.05). The study recommends collaboration between financial institutions and mobile network operators to reduce service costs and expand coverage, thereby encouraging greater adoption by SMEs in Kajiado County and enhancing their financial performance.
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    Effect of entrepreneurial orientation on the growth of micro finance institutions based in Nairobi, Kenya.
    (JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY, 2017) WAINAINA, ALICE WANJIKU
    Despite the impressive growth evident in the micro finance industry, its outreach still remains severely constrained. This study sought to examine the effect of entrepreneurial orientation (EO) dimensions on the growth of micro finance institutions as a strategy of capturing the large unexploited micro finance market. The specific objectives of the study were; to analyze the effect of risk taking propensity on the growth of micro finance institutions, to examine the effect of proactiveness on the growth of microfinance institutions, to examine the effect of autonomy on the growth of microfinance institutions, to examine the effect of innovativeness on the growth of microfinance institutions and to analyze the effect of competitive aggressiveness on the growth of microfinance institutions. The study examined a target population of 56 formal Microfinance institutions operating within Nairobi. It employed a census inquiry and collected data through questionnaires and face to face interviews. The target respondents were Chief Executive Officers, Owners, Branch managers, operational managers and Relationship managers. The study used mixed research design which involved the application of both qualitative and quantitative research techniques. Cronbach’s alpha was used as a measure of reliability and multiple regression analysis to test the hypotheses. The regression coefficient shows that the EO dimensions (independent variables) are positively and statistically significant in explaining the growth of MFIs. The regression coefficient shows that innovativeness is the most important variable. The study recommends the utilization of entrepreneurial orientation dimensions as a competitive strategy. It recommends the development of internal strategic measures that will promote innovation, proactiveness and autonomy in the management practices. The study recommends further research on effect of entrepreneurial orientation on Microfinance Institutions at different stages of growth. It also recommends a study on the impact of commercialization of microfinance institutions on alleviation of poverty.