Faculty of Business and Economics

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An Investigation of the Relationship between Government Spending and Private Consumption in Kenya.
(SAS Publishers (Scholars Academic and Scientific Publishers), 2017-09-30) Kametu Evans Ndia; Dr. Nyongesa Destaings Nyenyi; Dr. Odondo Alphonse Juma
Over the past years, the relationship between government spending and private consumption remains one of the contentious issues in macroeconomics literature. The question of whether public expenditure is neutral or crowds in or out private consumption has dominated theoretical and empirical debate. Three major schools of thought on the issue are observed in the literature, these are the Ricardian equivalence theorem, the Keynesian framework and the Substitutability hypothesis each with a distinct set of explanations. These contrasting schools of thought have triggered several empirical studies attempting to investigate the relationship between government spending and private consumption. However, conclusions from the empirical studies are inconclusive. Most of the empirical studies, on the subject have mainly focused on the high-income countries which have different structural properties in their economic structure and government spending patterns. There is scanty literature on the relationship between private consumption and government spending in the less developed economies. In Kenya, most of the studies focus on the relationship between government expenditure and economic growth. The government expenditure in Kenya has been increasing gradually over the years. The average value of government expenditure was 9.96 billion U.S. dollars with a minimum of 0.56 billion U.S. dollars in 1961 and a maximum of 50.29 billion U.S. dollars in 2015. On the other hand, the private consumption, average increment was 2.06 billion U.S. dollars with a minimum of 0.09 billion U.S. dollars in 1960 and a maximum of 9.19 billion U.S. dollars in 2015. Though there is upward trend of both private consumption and public spending in Kenya, the relationship between the variables is not clear. This study sought to investigate the relationship between government spending and private consumption in Kenya. The specific objectives of this study were to; determine the correlation between government spending and private consumption, establishthe long run equilibrium linkage between government spending and private consumption and determine the causality link between government spending and private consumption in Kenya. This study was based on correlational research design and used the Autoregressive Distributed Lag (ARDL) estimation technique. The model was subjected to several diagnostic tests, Breusch- Godfrey serial correlation LM test, CUSUM test and Bound test to ensure validity and reliability. The results of the study revealed that government spending has a significant positive effect on private consumption both in short run (= 0.376,) and long-run (= 0.888,). The results also indicated that the variables had a positive trend with a strong, statistically significant positiveassociation (0.998,). The Granger causality test results indicate that there is long run unidirectional causal relationship running from government consumption to private consumption. Based on the results, this study recommends the enhanced use of public spending to stimulate the private consumption.
Causal Effect of Financial Market Frictions and Flight to Quality on Cost of Credit in Kenya
(Journal of Economics and Sustainable Development, 2021-11-06) Barnabas Ochieng’ Onyango; Dr. Alphonce Juma Odondo; Prof. John Ernest Odada
Financial market conditions have been declining over the past ten years globally as most developing countries continue to adopt more liberal financial policies, such conditions may amplify adverse shocks to the economy. The Kenyan Banking sector was highly profitable before the implementation of financial market frictions, with industry return on equity’s average of 20%. The ratio of credit supply to gross domestic product was 35%; and the economy grew by 5.6 %. Nonetheless, after its adoption, listed Banks recorded negative Earnings per Share growth of 8.2%, compared to an average positive growth of 14.1%, The Net Interest Margin declined to 8.4% from 9.4%. Studies relating to financial market frictions, flight to quality and Cost of Credit have produced mixed results. It was on this basis that this study sought to establish the effect of financial market frictions and flight to quality on cost of credit in Kenya. The study adopted correlational research design. Secondary data from the Kenyan Market for the period January 2009 to December 2019 was analyzed. Augmented Dickey Fuller and Philips-perron unit root test was used to test the stationarity of the data. VECM was estimated to establish the speed of adjustment towards the long run equilibrium; Wald statistics was also estimated to establish short run causalities amongst the variables. Based on cointegrating equations, the error correction term indicated a negative sign and was significant at 5% level (C (1) = -0.153042, .0429 < 0.05), an indication that a long run relationship exists amongst the variables. Wald statistics revealed that the estimated coefficients in the VECM were insignificantly different from zero (.8417; .5603; .9188>p=0.05),however, Central Bank rate was found to be different from zero and significant at 5% level (.0163>p=0.05), an indication that there was a short run casualty running from the Central Bank rate to cost of credit. The study therefore recommends that for Micro finance institutions to maximize their profits they should adopt new technologies like Mobile Banking for their credit facilities, this does not require administrative and operation costs, in a bid to cope with the market shocks and frictions.
CAUSALITY BETWEEN REAL INTEREST RATE AND GROSS CAPITAL FORMATION IN KENYA: THE HICKSIAN HYPOTHESIS
(EPRA JOURNALS, 2018-09-10) Ochieng Otieno Benjack; Dr. Odondo Alphonce Juma
In 2016, the Government of Kenyan introduced interest rate cap of 14% per annum to spar investments through cheaper credit acquisition from commercial banks. This objective was not realized as evidenced by deteriorating levels of investments as reported by the Central Bank of Kenya (CBK) in 2017. In response to this incongruity, causal relationship between Real Interest Rate (RIR) and Gross Capital Formation (GCF) together with the relevance of Hicksian Hypothesis was tested in Kenya. Correlational research design was adopted and World Bank Time series data from 1980 to 2017 was used. Long run causality was tested using Vector error correction model (VECM) and revealed a long run causality with the speed of adjustment towards equilibrium = 1.696590 at p =0.0061. Wald test pointed to the existence of short run causality between the two variables. The study found a bi directional causality between RIR and GCF in the short and long-run periods. Consequently, investments decisions in Kenya closely follow the Hicksian hypothesis. Although bidirectional causality was established, a weak negative association existed between the two variables, suggesting the existence of other factors which determine GCF in Kenya given the outlined incongruity. Hence, the two variables should be jointly considered together with other GCF determinants during policy formulation in order to enhance investment activities in the economy.
Comparative Economic Analysis of Clonal Tea Yield Response to Nitrogen Fertiliser Rates within Selected Geographical Areas in Kenya
(International Journal of Tea Science, 2020-09-09) Rosebell A. Owuor; Alphonce J. Odondo; P. Okinda Owuor; David M. Kamau
Tea sector contributes approximately 30% of export earnings in Kenya. Despite the industry continuing to realize positive gross margins, high costs of production coupled with weak trends in export prices threaten its future contributions. Nitrogen fertiliser is mandatory in tea production and its appropriate use promotes tea growth rate and yields. Previous studies using different tea cultivars established that optimal fertiliser rates varied with clones and geographical area of production. However, economics of nitrogenous fertilisers use on same tea cultivar in different tea growing regions in Kenya remains undefined. This study evaluated response of NPKS 25:5:5:5 fertiliser applied at 0, 75, 150, 225 and 300 kg N/ha/year on clone BBK35 to determine the viable economic rate under uniform management in different locations (Karirana, Timbilil, Changoi, Sotik Highlands and Kipkebe) within Kenya. The study used time series tea yield data and corresponding variable costs from field experiments running from 1997 to 2007. The data were subjected to Partial Budget Analysis (PBA) procedures for economic analysis of on-farm experiments. The economic returns varied with rate of nitrogen and region of production. Maximum marginal rate of return (MRR) were achieved at 75 kg N/ha/year at Kipkebe, Changoi and Timbilil, and 150 at Sotik Highlands and Karirana. However best economic returns were recorded at 300 kg N/ha/year in Kipkebe and Sotik Highlands, 225 kg N/ha/year in Changoi, and at 150 kg N/ha/year in Timbilil and Karirana. These results demonstrate that current uniform fertiliser recommendation rate of 100 to 220 kg N/ha/year may not be suitable for all regions. There is need to develop region specific nitrogen fertiliser requirements for tea growing areas in Kenya.
COMPOSITION-DIFFERENTIATION OPERATOR ON THE BERGMAN SPACE
(Pan-American Journal of Mathematics, 2023) K.O.ALOO; J.O.BONYO; ANDI.OKELLO
We investigate the properties of composition-differentiation operator D on the Bergman space of the unit disk L2 a(D). Specifically, we characterize the properties of the reproducing kernel for the derivatives of the Bergman space functions. Moreover, we determine the adjoint properties of D whenever is self analytic map of the unit disk D
Drivers of Organic Fertiliser Adoption and Use Intensity Among Smallholder Maize Farmers in Lake Victoria Region, Western Kenya
(Open access publication ., 2025-07-16) Rosebell Achieng Owuor; Alphonce Juma Odondo; Caleb Ollweny; Mathews Dida
Smallholder farmers account for about 75% of maize production in Kenya. The current average on farm productivity is 1.43 ton/ha against the potential of 6 ton/ha. In Western Kenya, low soil organic carbon is one of the contributors to the low maize productivity. Studies have shown that organic fertilizers contribute towards increase in soil productivity. However, there is paucity of information on the relationship between drivers of organic fertilizers adoption and use intensity among the farmers, which the study seeks to address. A total of 358 farmers were interviewed in the 2020/21 growing seasons. Heckman’s two-stage model was estimated. The results demonstrate that age, education, gender, soil quality perception and access to supportive resources are pivotal in shaping organic farming decisions. There is need for targeted extension services to less educated and older farmers. Off-farm income generation should be encouraged. Integrated soil fertility management approaches that address nutrient replenishment and soil erosion control is necessary, and there is need to promote mechanization or subsidization of organic fertilizer application on larger farms as this may help overcome labour constraints and improve organic fertilizer adoption on a broader scale. The results may be a source of literature for subsequent studies in related fields.
Dynamics of Core Inflation, Energy Inflation, Food Inflation and Manufacturing Sector Output Growth in Kenya: Econometric Analysis of Causality and Effects
(www.iiste.org, 2021-01-31) Dr. Alphonce Juma Odondo
World over, the manufacturing sector plays an important role in spurring economic development by boosting employment opportunities for semi-skilled labour and building a nation’s competitiveness through exports. Globally, only a few nations have managed to realize their development status without manufacturing sector playing a leading role. Kenya has not managed to develop a robust manufacturing sector and its growth has been majorly ascribed to the agricultural and service sectors. It has therefore, experienced de industrialization as evidenced by the decline in GDP contribution by the manufacturing sector from a paltry 10% in 2018 to 9.7% in 2019. The de industrialization has been characterized by fluctuating inflation rates, a scenario that has elicited debate as to whether there exists any nexus between manufacturing sector output growth and inflation rate. A few empirical studies have been conducted on the same, however, the exact relationship is not well defined. Furthermore, inflation has been largely treated as an aggregate, a scenario that hampers policy formulation. A disaggregated approach to the analysis thus motivated this study. Time series data from the world bank was used and VECM estimated to assess long run dynamics after stationarity test by ADF and Cointegration test by Johannes’s approach. Short run causalities were assessed via Wald test. The study revealed long run relationship between manufacturing output growth and the variables (core inflation, energy inflation and food inflation). Short run causality running from each of the inflation types to manufacturing output growth also exists. Food inflation negatively and significantly influences manufacturing output growth while core inflation has significant positive effect on the same. To enhance manufacturing output growth in Kenya, food inflation should be reduced and stabilized. In the same vain, low and stable level of core inflation should be ensured over time.
Effect of Cash Transfers on Household Consumption amongst the Vulnerable Population in Awendo Sub-County
(Journal of Economics & Management Research, 2021-07-21) Donald Indiya; Oloo Willis Otieno; Odondo Alphonce; Gulali Donald; Odayo Frankline
Despite the national cash transfer programme, poverty rate among the Kenyan population is still high at a prevalence rate of 48.9% in 2016 up from 45% in 2008. In Kenya, poverty prevalence is disproportionately spread across the 47 counties and sub-counties. In Awendo sub-county, poverty prevalence rate is 49.8 % in 2018 which is higher than the national figure prompting this empirical study. The purpose of this study was to analyze the effects of cash transfer on consumption among vulnerable households in Awendo Sub-County. The study was anchored on the Life Cycle hypothesis of consumption and savings, the study used a correlational design to aid the determination of relationship and association between cash transfers and status of household consumption. Using stratified sampling method, a total of 390 respondents were selected. However, the response rate was 98.7 %. Cronbach’s alpha coefficient was estimated to test for reliability and the value was 0.782 which was greater than the threshold of 0.7. The study used multiple linear regression models which indicated that, there is a positive significant effect of cash transfer on consumption (α1 =0.060;p=0.046). In conclusion; cash transfer is an important factor determining levels of consumption of the vulnerable population in Awendo Sub-County. The study recommends for policy to enhance allocations among the vulnerable population in Awendo and Kenya in general. The study provides empirical evidence on the current body of knowledge for researchers and policy makers.
Effect of Domestic Saving on Capital Formation in Kenya
(www.iiste.org, 2019-08-31) Mukhongo Wafula; Nelson Obange; Alphonce Odondo
Kenya’s average rate of gross capital formation of 20.13% of GDP over the period 2006-2017 falls short of at least 25% necessary for developing countries to experience sustainable growth. The attendant effects of low capital formation have entrenched unemployment rate above 39% line and consigned more than 65 per cent of the country’s population to living on less than $ 2 a day. The statistics suggest the need for urgent policy intervention aimed at accelerating capital formation in Kenya. But whether the government should respond by mobilizing more domestic saving or not is the question which this study sought to answer. This is because majority of the previous studies that investigated the effects of domestic saving on development indicators limited themselves to growthsaving nexus. Those that investigated the effect of domestic saving on capital formation either restricted themselves to a bivariate framework or controlled for a few sources of capital formation. This implies that the effect of domestic saving on capital formation is not clear. Besides, the response of capital formation to shocks in domestic saving is not clear. The purpose of this study was to investigate the effect of domestic saving and the response of capital formation to shocks in domestic saving. The study was anchored by Solow’s capital accumulation model within a correlational studies research design. Data over 1974-2017 period was sourced from the World Bank. ARDL bounds test found the existence of cointegrating relationship among gross capital formation, gross domestic saving and the controlled variables when gross capital formation was specified as the target variable. The short-run dynamic model estimates indicated that ECM term corrects 39.56% of deviations from long run equilibrium in one year. ARDL estimation indicated that in the long run, gross domestic saving has positive significant effect on gross capital formation. The results were robust for IRFs analysis which found the response of gross capital formation to innovations in gross domestic saving to be positive and significant. The study concluded that in the long-run, Kenya’s capital formation will be driven by domestic saving. Therefore, to achieve high capital formation in the long-run, the study recommended policies that enhance positive effects of domestic saving for consideration by the government of Kenya.
Effect of Financial Inclusion on Performance of Microfinance Banks in Kenya
(THE INTERNATIONAL JOURNAL OF BUSINESS & MANAGEMENT, 2021-02) Lilian Achieng' Issaias; Dr. Alphonce Juma Odondo; Dr. Stephen Okelo
Financial inclusion brings closer financial services at affordable costs to sections of disadvantaged and low-income segments of society. There have been many formidable challenges in financial inclusion such challenges include; bridging the gap between the sections of society that are financially excluded within the ambit of the formal financial system, providing financial literacy and strengthening credit delivery mechanisms so as to promote financial economic growth. A nation can grow economically and socially if its weaker section can turn out to be financially independent. Kenya strives to become a regional financial hub with vibrant, efficient and globally competitive financial system to drive savings and investments by the year 2030, where financial inclusion has been identified as a key driver. However, there is paucity of information on the contribution of financial inclusion on performance of micro finance banks in Kenya. It is on this basis that the study sought to determine the effect of financial inclusion on financial performance of micro finance banks in Kenya. The study was guided by Expectations Theory, Contracting Cost Theory and Market Hypothesis Theory. A census study was carried out for all the twelve (12) microfinance banks in Kenya. The study relied on secondary data covering the period 2015-2019 and this was obtained from audited financial statements of the microfinance banks. Correlational research design was adopted. Random and Fixed effects panel data models were estimated to establish the relationships. Choice of the best model between the two was done using the Hausman test where random effect was selected. Post estimation tests including multicollinearity, autocorrelation and heteroscekedastity work conducted. An insignificant negative relationship was established between firm size and return on assets (Coef= -.0014368, p >0.05). Similarly, the study established insignificant negative relationship between interest rates and financial performance as measured by return on asset (Coef= -.0888295, p >0.05). However, there was a significant positive relationship between operational efficiency and return on asset as a measure of financial performance (Coef= .394119, p <0.05). The study concluded that operational efficiency affected financial performance of micro finance banks in Kenya hence recommended that microfinance institutions should leverage on operational efficiency in order to make profit for shareholders.
Effect of Foreign Multilateral Aid and Foreign Bilateral Aid on Capital Formation in Kenya
(American Research Institute for Policy Development, 2019-09) Mukhongo Wafula; Alphonce Odondo; Nelson Obange
Low capital formation in Kenya, averaging rate 20.13% of GDP over the period 2006-2017 has kept unemployment rate above 39% with more than 65 per cent of people living on less than $ 2 a day. Yet previous studies do not have a clear answer to the question of whether increasing bilateral aid/multilateral aidenhances capital formation or not. This study’s purpose was to investigate the effect of multilateral aid and bilateral aid on capital formation in Kenya. The study was anchored by Solow (1956) model. Autoregressive distributed lag estimates for data over 1974-2017 suggested that multilateral aid has positive insignificant effect on capital formation while bilateral aid has negative significant effect after one year. Error correction mechanism model estimates suggest that bilateral aid has positive significant effect on capital formation in the short-run during the programme year but becomes negative thereafter. The results were robust for impulse response analyses. The study concluded that bilateral aid retards capital formation in the long run but enhances it in the short-run during the first year.Soliciting for more bilateral aid was recommended in order accelerate capital formation in Kenya in the short-run.
EFFECT OF FOREIGN REMITTANCES ON PRIVATE CONSUMPTION, INVESTMENT, IMPORT AND OUTPUT IN EAST AFRICA COMMUNITY
(International Journal of Social Science and Economic Research, 2017-06-06) Penuel Nyaanga Ondieng’a; Dr. Alphonce Juma Odondo (PhD); Dr. Benjamin Owuor Ombok (PhD)
Foreign remittances to East Africa Community (EAC) have increased considerably in the past two decades becoming one of the largest sources of foreign currency earnings. However, despite the remarkable growth of remittances in EAC, little has been researched on its effect on consumption, investment, import and output at macro level. Most of the available literatures concentrates on its effect on poverty reduction at household levels. This study, therefore, sought to empirically test the link between remittances and consumption, investment, import and output. The study used correlational research design anchored on a linear Keynesian macroeconomic model with a dynamic outlook. Panel data set for the period 2000-2014 from the World Bank database for the five EAC countries, namely; Kenya, Uganda, Tanzania, Rwanda and Burundi were used. The study used a Two Stage Least Square (TSLS) method of estimation and established that of foreign remittances have a positive effect on private consumption, investment, import and output in EAC. The study recommends that macroeconomic policies should focus on its sustainability to promote economic growth and makes implications for policy and further research.
EFFECT OF FOREIGN REMITTANCES ON SELECTED MACROECONOMIC VARIABLES IN EAST AFRICA COMMUNITY
(International Journal of Economics, Commerce and Management, 2017-05-20) Penuel Nyaanga Ondieng’a; Alphonce Juma Odondo; Benjamin Owuor Ombok
Over the years, remittances in East Africa Community (EAC) have grown remarkably becoming the second largest capital flow after Official Development Assistance (ODA). However, most of the studies conducted on its effects are non EAC specific and have not expanded the analysis beyond output to other macroeconomic variables like consumption, investment and imports. This study therefore, sought to empirically test the link between remittances and its effect at macro level in EAC. The study was anchored on the Keynesian model of Economic growth and was guided by correlational research design. Panel data set for the period 1985-2014 from theWorld Bank database for the five EAC countries consisting of Kenya, Uganda, Tanzania, Rwanda and Burundi were used. The study used Two Stage Least Square (TSLS) method of estimation and established that foreign remittances have positive effects in EAC, an increase ofremittances by one dollar, through impact and dynamic multiplier effects increased consumption, investment, import and output. However, the impact is in the first year and wears out in the subsequent years with exception of Rwanda where it reduces gradually over a fouryear period. The study concludes that foreign remittances have significant positive effects on consumption, investment, import and output. Macroeconomic policies should therefore, focus on its sustainability to promote economic growth. At the end, study makes implications for policy and further research.
Effect of leadership style on the relationship between the employee empowerment and job performance among staff in the County Government of Kakamega, Kenya
(IOSR Journal Of Humanities And Social Science (IOSR-JHSS), 2020-06-01) Dr.Victor LusalaAliata,PhD; Stellah Puka
County Governments have invested a lot in staff empowerment strategies such as employee training, employees rewards and information flow since inception. However, their effect on job performance has not been ascertained. Several studies have been conducted on this subject and their results were diverse.More than 25% of organizations reported no significant empowerment-oriented practices in their organizations.The purpose of this study was to analyse the effect of leadership style on the relationship between employee empowerment and job performance in the county government of Kakamega. This study covered the following theories: Agency Theory, Empowerment Theory, and Resource Based View Theory. A correlation research design was adopted for the study and the study targeted 242 respondents, drawn from all the county departments in the County Government of Kakamega. Simple random sampling, stratified sampling and purposive sampling were used in the study. A sample size of 171 respondents was used. The questionnaire was the main instruments for data collection. Reliability analysis results illustrated that Cronbach‘s alpha coefficients were above 0.7. The study employed criterion validity, construct validity of the instruments, and face validity.Data analysis and interpretation were based on descriptive statistics as well as inferential statistics using SPSS version 22. Data was presented using frequency tables, percentages and pie charts. The findings established that Introduction of leadership style on the relationship between employee empowerment and job performance among staff in the County Government of Kakamega decreased employee job performance from 69.8% (R2= 0.698) to 56.3% (R2= 0.563). It was recommended that the County government should consider embracing autocratic & participative leadership styles to enhance the relationship between employee empowerment and job performance.The output of the study would be utilized by the Department of Human Resources Management by the County Governments of Kenya in the formulation of a systematic process of applying employee empowerment. Finally, it would also contribute to scientific knowledge base for academic purposes for researchers in the area of employee empowerment.
Effect of Monetary Facets on Dynamic Capital Structure of Selected Commercial Banks Listedat the Nairobi Securities Exchange, Kenya
(THE INTERNATIONAL JOURNAL OF BUSINESS & MANAGEMENT, 2021-02) Rose Adem; Dr. Alphonce Juma Odondo; Dr. Evans Ovamba Kiganda
Dynamic capital structure is the way firms make adjustments towards the target capital structure which is proxied by debt equity ratio. There has been variation of debt equity ratio of firms at the Nairobi Security Exchange (NSE) in an effort to achieving targeted leverage that would yield targeted revenues and profits for firms.Despite this, most firms still operate at sub optimal level and experience losses. Studies in this respect have attributed the sub optimal operations to monetary facets such as inflation rate, exchange rate and interest rate. However, the studies have yielded mixed results leaving the effect of monetary facets on the dynamic capital structure unresolved. It is on this basis the study sought to establish effect of the monetary facetson dynamic capital structure of selected commercial banks listed at the NSE. The study was anchored on market timing theory and guided by correlational research design. The target population was eight tier one banks at the NSE. Secondary data spanning tenyears from 2010 to 2019 were obtained from commercial banks audited financial statements while data on monetary facets was obtained from Central Bank of Kenya database and audited financial statements of the banks. Panel data methodology was adopted to estimate Random and Fixed Effect Models and the Hausman test used to select the appropriate model. Whereas exchange rate had insignificant positive effect, interest rate had significant positive effect on the dynamic capital structure. Inflation however, had significant negative effect on the same. Therefore, to enhance performance of banks, hedging interest rate and inflation rate risks is necessary.
EFFECT OF PRODUCT DESIGN ON OPERATIONAL PERFORMANCE OF SUGAR FIRMS IN KENYA
(International Journal of Scientific Research and Engineering Development, 2023-07) Kunyoria Ogora Joseph1; Albert Washington Ochung Tambo2; Victor Lusala Aliata3
Product design is a key indicator of a successful operational performance realization and is gaining robust momentum among Sugar Firms as a survival and growth strategy. The Sugar Firms in Kenya contribute approximately 26% directly to the Gross Domestic Product (GDP) and an additional 25% indirectly through agro-based and associated industries linkages. However, they have experienced a significant decline of milled sugar production from about 635,700 tonnes in 2015 to 491,100 tonnes in 2018 according to Kenya National Bureau of Statistics in 2019. This decline was mainly attributed to the high cost of production stemming from inefficiencies across the value chain from inadequate research and extension leading to the design of production systems that are inefficient. Despite the vast contribution of the Sugar Firms to the economy, this problem ofinefficient production system has not been solved and thus the Sugar Firms performance continues to spiral downward leading to the dissolution of some firms, downscaling of operations etc. Reviewed the studies also, established a weak relationship between product design and operational performance and warrants investigation. It is in this regard that this study purposes to establish the effect of product design on operational performance of Sugar Firms in Kenya. The research was guided by the resource-based view theory and transaction cost theory. A census survey was conducted targeting all 164 managers and assistant managers of Sugar Firms in Kenya. A pilot study was conducted of 14 participants constituting of managers and assistant managers of seven departments in Transmara Sugar Company to test for reliability using Cronbach‘s alpha, with a threshold of 0.70, indicating satisfactory instrument reliability. The Cronbach's Alpha reliability coefficient obtained in this study was 0.849. Primary data was collected using questionnaires. A multiple linear regression model was applied to establish the association among explanatory variables in this study. The results established that product design significantly affects operational performance (β =0.742, p=.000), hence, adoption of a one-standard deviation increase in product design yields a significant 0.742 unit increase in operational performance for Sugar Firms. Indicating a positive and significant association between the two variables. Hence, the study offers a products design model that can assist in enhancing operational performanc
Effect of Public Financial Management Practices on Budget Absorption among Lake Region Economic Block Counties in Kenya
(African Development Finance ., 2025-07-20) Odera David Otieno; Micah Odhiambo Nyamita (PhD); Stephen Okelo Lucas (PhD)
Abstract Effective budget absorption is crucial for counties as it ensures optimal utilization of allocated funds for development projects and public services. However, there is evidence that the Lake Region Economic Block (LREB) counties in Kenya face a significant challenge with budget absorption. This study therefore assessed the effects of public financial management practices on budget absorption among the Lake Region Economic Block counties in Kenya. Descriptive and inferential statistics particularly correlation and multiple linear regression were used to analyze data. The regression results showed that budgeting had the strongest influence (β = 0.270, p = 0.007), followed by debt management (β = 0.257, p = 0.034), financial reporting (β = 0.248, p = 0.000) and revenue management (β = 0.117, p = 0.001). Based on the findings, it is recommended that county governments enhance budget absorption through structured budgeting, sustainable debt management, efficient revenue collection and transparent financial reporting.
EFFECT OF TANGIBILITY ON CUSTOMER SATISFACTION AMONG MICRO FINANCE BANKS CUSTOMERS IN KENYA
(European Journal of Business and Strategic Management, 2021) Hakim Omondi Nyabundi; Dr.Victor Lusala Aliata, PhD; Dr. Alphonce Odondo, PhD
Purpose: Financial markets and institutions are central to the process of economic growth. The provision of credit has increasingly been regarded as an important tool for raising the incomes of populations, mainly by mobilizing resources to more productive uses. However, microfinance institutions in Kisumu City Kenya are still far off from reaching the required customer satisfaction index. The main purpose of the study was to establish the effect of tangibility on customer satisfaction among micro finance banks (MFB) customers in Kisumu City. Methodology: This study was anchored on a Market based theory; Survival based theory and the Expectancy Disconfirmation theory. A correlation research design was used. Study targeted 10,300 MFB customers in Kisumu City. A sample size of 370 MFB customers was drawn from the target population using simple random sampling technique. The study used primary data from questionnaires. Findings: The findings indicated that Tangibility is associated with 63.1% of the variation in customer satisfaction, an increase in tangibility affects customer satisfaction by 0.341. The correlation analysis to determine the effect of tangibility on customer satisfaction shows a significant correlation existed (r = 0.631, p < 0.05). This shows 63.1% of the variations on customer satisfaction are associated with tangibles. Unique Contribution to Theory, Practice and Policy: The organization needs to train employees on various aspects of tangibility. Systems should be in place that ensures certain aspects like security and quality are retained and improved throughout customers’ lifetime. Keywords:
Effects of Debt Financing on Financial Performance of Small and Medium-Sized Enterprises in Homa Bay Town, Kenya
(THE INTERNATIONAL JOURNAL OF BUSINESS & MANAGEMENT, 2021-12) Kelvin Otieno Okelo; Dr. Micah Nyamita; Dr. Alphonce Odondo
The SMEs in Kenya account for 98% of businesses and create about 30% of jobs annually. Many SMEs face challenges of a stable financing cycle, and are unable to adjust to sales cycles that are available in the market, hence affecting their financial performance. Although SMEs have numerous accesses to debt financing in Kenya, they still struggle to remaininto operation due to poor financial performance. Further, studies also have emphasized that despite the fact that debt financing is readily available in Kenya, most SMEs cannot access them due to lack of collateral and ignorance of the various financing options available in the country. Therefore, this study sought to establish the effect of debt financing onfinancial performance of small and medium-sized enterprises (SMEs) in Homa Bay Town, Kenya. Specifically, the study sought to identify the effect of long term financing on financial performance of SMEs in Homa Bay Town, identify the effect of trade credit on financial performance of SMEs and examine theeffect of short term financing on performance of SMEs in Homa Bay Town. The target population was made up of 825 retail SMEs in Homa Bay Town. The study adopted Yamane’s formula to derive the sample size of 296 SMEs. Primary data was obtained from the sampled SMEs using structured and semi structured questionnaires. The study concluded that there is a great effect of debt financing on the financial performance of SMEs in Homa Bay Town, with long term and short term financing having the highest effect and trade credit ranked lowest in terms of statistical significance.
Effects of Strategy Control Measures on Strategy Implementation at the Lake Victoria North Water Services Board, Homabay County,Kenya
(2020-07) Belyndah Shitakwa Ligare; Thomas Okoth Otieno; Dr. Victor Aliata
The Lake Victoria North Water Services Board (LVNWSB) in Homabay initiated a project with the aim of improving and expanding the network and infrastructure for drinking water and its sanitation in the county of Homabay. At that time, about 92% of the population had no access to piped water which was also of poor quality and high cost. Only 8% of the residents benefited from a continuous water supply. The Homabay Project is worth Ksh 300M which was to be completedby 2017 but up to date it has not been completed. The objective of this study was to establish the effect of strategy control measures on strategy implementation at the LVNWSB, in Homa Bay County, Kenya. The stakeholder theory was used in the study that suggests that an organization is a social construction made of interaction of various stakeholders. This study used correlation survey design.The target population for this study was 50 employees of LVNWSB. Census method was used to survey the target population. The respondents were given questionnaires that were administered through drop and pick method.The questionnaires were pre-tested by conducting a pilot survey from 5 respondents taken from the 50 employees using the internal consistency technique by employing Cronbach Coefficient Alpha test for reliability. Validity was determined using Content Validity Index (CVI). The research instrument was designedto collect qualitative and quantitative data. The researcher used multiple regression analysis using SPSS so as to determine the effects of independent variables on dependent variable.The study findings revealed that strategic control systems have a positive significant effect on strategy implementation (β=.389, p=.000). The study concluded that strategic control systems have positive effect on strategy implementation. The study therefore recommends that the government improves the strategic control measures to enhance strategy implementation at LVNWSB.Findings from this study will be valuable to a number of stakeholders in and outside thewater sector: expanding existing knowledge, referencing and finding comparisons in the quest of getting an ideal strategy-ethics composition and policy approach to stakeholder involvement that would improve service delivery.