Abstract:
Investment groups are formed with the aim of growing and maximizing wealth for the members. However, some
have failed making it difficult for them to be sustainable. The main objective of the study is to establish the
influence of capital structure on growth in wealth of investment groups in Kenya, and to establish the moderating
effect of group size on the relationship between capital structure and the growth in wealth of investment groups
in Kenya. The study used cross sectional survey research design. The population of interest was 4020 investment
groups registered by Kenya association of Investment groups. Stratified random sampling method was used and
364 investment groups were selected proportionate to the size of the strata. The survey instrument was a
questionnaire administered to the group members and their officials. Pilot test was done using 36 respondents
who were drawn from target population but not be included in the main study sample. Cronbach alpha was used
to test reliability of the instrument, factor analysis was used in the testing of construct validity by considering
average variances extracted and squared correlations of the constructs. Analysis of the data was done using
descriptive statistics and inferential statistics. Descriptive statistics involved computations measures of central
tendency and presented in frequency tables, pie charts and graphical charts. Inferential statistics was done using
the multiple regression. Inferential analysis involved fitting of regression models. The regression analysis results
obtained from the study show capital structure had a significant influence on growth in wealth. A moderated
multiple regression was fitted to test the moderating effect of size on the relationship between capital structure
and growth in wealth. The Moderated Multiple regression model results showed that size has a significant
influence on the relationship between capital structure and growth in wealth. The findings and conclusions of
this study are of significance to the investment groups. They are able to appreciate how growth in wealth of their
groups is influenced by the study variables. Based on the findings the management can be able to understand the
strategies to be taken in order to improve the growth of the respective investment groups.
