Accounting and Finance

Customer relationship management strategies and profitability of commercial banks in Kenya.

2024-01-01T00:00:00Z

Customer relationship management strategies and profitability of commercial banks in Kenya. Onchiri, Nancy Moraa ABSTRACT Customer Relationship Management (CRM) is a business strategy focused on building and maintaining long-term relationships with customers. CRM strategies can be implemented through various techniques, including data mining, customer segmentation and customer service. This research investigates the effects of CRM strategies on the profitability of commercial banks, focusing on three specific aspects: the technological aspect of CRM, the SERVQUAL aspect and the service culture aspect. The study adopted a descriptive research design and targeted employees in the customer service and finance departments of 42 commercial banks in Kenya. A purposive sampling technique was employed to select two senior employees from each organization, resulting in a total of 84 respondents. Data was collected using a survey questionnaire administered to the selected respondents. Both quantitative and qualitative methods of data analysis were used, with data analyzed using the Statistical Package for Social Sciences (SPSS). The results were presented in tables and figures. Multiple regression analysis was conducted to establish the relationships between the study variables. The findings indicated that the profitability of commercial banks is significantly influenced by CRM dimensions. Notably, service culture and service quality emerged as the most dominant factors affecting profitability. A limitation of the study was the use of purposive sampling, which, while ensuring relevant expertise, may limit the generalizability of the results to a broader population. To mitigate this, the sample was selected from a diverse range of commercial banks across Kenya to enhance representativeness. The study recommends that commercial banks prioritize the development of a strong customer-centric service culture and invest in continuous improvements in service quality while leveraging technological tools to gain customer insights and streamline service delivery. A research project submitted to the school of business and economics in partial fulfilment for the award of masters degree in business administration (strategic management option), the cooperative university of Kenya

Financial literacy and financial performance of small and medium-scale enterprises in Kajiado county, Kenya

2024-01-01T00:00:00Z

Financial literacy and financial performance of small and medium-scale enterprises in Kajiado county, Kenya Ogonji, Vincent This study investigates the relationship between financial literacy and the financial performance of small and medium-sized enterprises (SMEs) in Kajiado County, Kenya. The study identifies financial performance challenges such as inadequate bookkeeping, poor debt management, and informal business operations as critical issues undermining SME growth. Guided by the Human Capital Theory, Trade-Off Theory, and Behavioural Finance Theory, the research highlights the role of financial skill acquisition, debt optimization, and behavioural awareness in improving financial outcomes for SME owners. A mixed-methods approach was employed, with data collected from a target population of 350 registered SMEs in Kajiado County. Stratified random sampling yielded a sample of 207 respondents. The methodology included a pilot study to test reliability and validity of the research instruments, structured questionnaires for data collection, and multiple linear regression and simple linear regression analysis for data interpretation. Tests for regression assumptions—normality, multicollinearity, autocorrelation, and sampling adequacy—were conducted to ensure the robustness of the model. Descriptive statistics provided insights into central tendencies and variability, while inferential statistics identified relationships between variables. The results reveal that bookkeeping skills significantly enhance profitability, while debt management practices and formal business operations also contribute positively, though to a lesser extent. Specifically, simple linear regression showed a strong correlation (R = 0.798) between financial literacy and financial performance, with 63.7% of variance (R² = 0.637) in financial performance explained by the study variables. Conclusions emphasize that enhanced financial literacy drives improved profitability and business sustainability. Recommendations advocate for targeted training in bookkeeping, debt management, and business formalization to strengthen SME financial practices. Policymakers and SME support programs should prioritize tailored financial literacy initiatives to foster sustainable economic growth in Kajiado County. A research project submitted to the department of entrepreneurship and economics, school of business and economics partial fulfilment of the requirements for the award master’s in business administration (finance option), at the cooperative university of Kenya

Taxation practices and financial sustainability of supermarkets in Laikipia County.

2024-01-01T00:00:00Z

Taxation practices and financial sustainability of supermarkets in Laikipia County. Wariara, Joyce Financial sustainability allows retail businesses to remain profitable, invest in growth, and create jobs, which supports broader economic development. In Kenya, however, high taxes like VAT, Income Tax, and Excise Duty significantly strain retailers, limiting their ability to grow. Additionally, compliance costs, penalties, and interest further reduce profitability, especially for small and medium enterprises. This study investigates the impact of taxation practices on the financial sustainability of supermarkets in Laikipia County, Kenya. Taxation is critical for public funding, supporting infrastructure, and providing essential services, yet it can also impose financial burdens on businesses, affecting their ability to expand and sustain operations. The research explores how income tax, value-added tax (VAT), excise duty, and pay-as-you-earn (PAYE) influence supermarkets' cash flow, profit margins, and investment capacity. Through examining both global and regional tax perspectives, the study highlights the challenges posed by high tax rates and compliance costs, particularly for retail businesses operating on narrow profit margins. The study was anchored on several theories, including the Ability to Pay Theory, Theory of Optimal Taxation, Kelekian Theory of Taxation, and Economic-Based Theory. Theoretical insights show that progressive taxation and optimized tax rates can foster equity and resource allocation, helping maintain business growth and sustainability. A descriptive research approach was applied, with a sample size of 70 respondents selected using a Yamane sampling design. Primary data was collected through self-administered questionnaires, and secondary data through a systematic literature review of existing literature. Data was analyzed using descriptive statistics and multiple linear regression. Reliability and validity tests were conducted to ensure data collection instruments were accurate and consistent. Findings indicated a statistically significant positive relationship (p < 0.05) between all tax variables and the financial sustainability of supermarkets. This study highlights the significance of structuring tax policies that support business financial sustainability, stressing the need for balanced taxation systems to reduce operational pressures and enhance the economic sustainability of retail businesses. Consequently, the study recommends that Supermarkets should prioritize cash flow management and establish reserve funds to meet tax obligations, while enhancing tax planning to optimize deductions and credits, thereby supporting their financial sustainability. Additionally, the study suggests that the government and KRA should simplify tax compliance, consider adjusting tax rates, and introduce incentives to encourage business expansion and compliance. A research project submitted to the school of business and economics in partial fulfilment for the award of the degree of master of business administration (accounting option) of the cooperative university of Kenya.

Relationship between internal factors and financial performance of agricultural firms listed in Nairobi securities exchange, Kenya.

2024-01-01T00:00:00Z

Relationship between internal factors and financial performance of agricultural firms listed in Nairobi securities exchange, Kenya. Geteri, Hosea Nyambane According various reports by KNBS Economic survey from 2012 to 2022, agricultural firms listed in NSE have reported mixed financial performance and financial element has not been fully factored. The reports mostly attribute performance of five agricultural firms to climate change either availability or non-availability of rain. This negates financial aspect that plays a key role in defining the overall financial performance of the organization. Further, KNBS Economic survey from 2012 to 2022 reports, depicts that some firms perform well others perform poorly to an extent of stopping to trade. The study aimed at investigating the relationship of internal factors and financial performance of agricultural firms listed at NSE, Kenya. The independent variables of the study were leverage, liquidity, efficiency and firm size while the dependent variable of the study will be Performance. The specific of the study will be to investigate the effect of leverage, liquidity, efficiency and the growth on the performance of agricultural firms listed at NSE, Kenya. The study will be confined to only listed firms listed at NSE, Kenya under agricultural sector only where the study will cover a period of 11 years from 2012 to 2023. Under the empirical literature review, the study discussed relevant current studies per variable. For the theoretical literature review Modigliani and miller’s capital structure theory, Liquidity preference theory, efficiency structure theory and trade-off-theory. A panel data regression model was applied to analyze data from 72 firm-year observations over 11years from 2012 to 2023. The results indicate a positive and statistically significant relationship between liquidity (coefficient = 0.215, p = 0.042), efficiency (coefficient = 24.04, p < 0.01), and firm size (coefficient = 2.677, p = 0.065) with financial performance, as measured by return on equity (ROE). In contrast, leverage showed a negative but statistically insignificant relationship (coefficient = -1.939, p = 0.824) with ROE. The findings suggest that improved liquidity, higher operational efficiency, and larger firm size are associated with better financial performance in agricultural firms. The study highlights the importance of managing these internal factors to improve profitability. Practical recommendations are provided for stakeholders to enhance financial performance, and areas for further research are suggested, including the exploration of external factors and the use of longitudinal studies to understand long-term trends in agricultural firm performance. A research project submitted to the school of business and economics in partial fulfilment of the award of the degree of master of business administration finance option, the co-operative university of Kenya.