Theses and Dissertations (TD)

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    MACROECONOMIC VARIABLES AND STOCK MARKET PERFORMANCE A CASE OF NAIROBI SECURITIES EXCHANGE
    (Umma University, 2023-01) 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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    EFFECT OF MOBILE BANKING ON FINANCIAL PERFORMANCE OF SMALL & MEDIUM-SIZED ENTERPRISES IN KAJIADO COUNTY, KENYA
    (Umma University, 2023-06) 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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    INFLUENCE OF STRATEGIC PLANNING AND HUMAN CAPITAL PARTICIPATION ON THE PERFORMANCE OF COMMERCIAL BANKS IN KENYA
    (KENYATTA UNIVERSITY, 2025-02-06) WANJAU, JACKSON
    Numerous extant studies linking strategic planning and organizational performance abound, but non- focused on the effect of human capital participation in such a relationship. Moreover, none of the studies focused on the Kenya’s banking industry context. Thus a study towards determining the nature of relationship among the three constructs in Kenyan banks was thoughtful. The purpose of this study was to examine the influence of strategic planning and human capital participation on organization performance in Kenya’s commercial banks. The study was guided by the following specific objectives: Establish the relationship between strategy formulation and performance of Kenya’s commercial banks, establish the relationship between strategy implementation and performance of Kenya’s commercial banks, to ascertain the effects of control systems on performance of Kenya’s commercial banks, to investigate the effects of leadership and management participation and involvement in the strategic planning process on performance of commercial banks in Kenya, and to investigate the effects of employee participation and involvement in the strategic planning process on performance of commercial banks in Kenya. In this study descriptive research design, was used as the framework for analysis of data. The population of the study comprised of all 43 commercial banks in Kenya. Stratified random sampling technique was used because Kenyan banks are in different stages of development and exhibit high level of diversity in aspects such as ownership and leadership. The researcher used a questionnaire as a primary data collection instrument. Data for this study was quantitative hence descriptive statistics and inferential statistics were employed in data analysis. To establish the relationships between variables the researcher used Pearson’s Product Moment Correlation Coefficient (r), and multiple linear regressions. Performance of the banks is done through the use of both financial and non-financial measures with the inclusion of the employees in strategy evaluation and has indicated improvement in the banks’ profitability. Currently, the management’s efforts in controlling the strategic implementation strategy have resulted to the banks’ assets growth, growth of the bank’s market shares and launch of new products. Above 90% of the banks’ performance can be explained by the influence of the strategic planning and human capital participation in strategic planning. These variables have shown strong positive correlation with the performance of the banks. Thus, increasing either of the variables will result to a corresponding increase of the banks’ performance. However management and leadership participation and involvement was found to have very minimal influence on the strategic planning process. The study recommends a need to implement a system of corporate governance for banks, in the form of a template on which banks should base the development of their own control systems. The banking supervisors should provide guidance to banks on sound strategic planning and proactive practices that should be in place. The researcher recommends further studies to be undertaken focusing on influence of management and leadership participation and involvement in strategic planning process and their influence in the performance of the banks to validate these findings.